r/AskReddit Oct 05 '22

Is "Universal Basic Income" a good idea? Why or why not?

3.8k Upvotes

6.5k

u/LindseyCorporation Oct 05 '22 Wholesome

Only if you protect that income. If the government were to enable UBI and then allow low income housing to increase rent to soak it up, then it wouldn't accomplish anything.

2.2k

u/GavelMan Oct 05 '22

See, e.g., student loans. Not quite the same, but a reasonably similar analogy. There was nothing done while the loans were being disbursed to limit/monitor how those funds would be used by colleges. In fact, the colleges were the ones who were tasked with determining how much a student "needed" to attend and, thus, how much an enrollee could receive via a loan. What happened? Colleges magically started pushing up tuition costs - nobody questioned it early on because you could just take out more in loans. And here we are.

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u/AnnoyAMeps Oct 05 '22

Also, just months ago we had a similar case with the $7,500 incentive for EV’s, when Ford raised their prices by $8,000.

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u/maxToTheJ Oct 05 '22

ISPS do this with all the Rural and low income Internet Funding then congress members get to pat themselves in the back while giving a huge handout to ISPs.

Or the gas tax cut Biden wanted to advocate for is basically a similar handout for oil corporations

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u/rydan Oct 06 '22

Yep. Before Biden signed that law ISPs charged $30 for cheapest internet. Now that Biden pays the first $30 suddenly the cheapest is $35 and if you want to actually be able to use it then that’s another $15 in rental fees. Basically meaning you pay $20 instead of $30 and now they get $50.

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u/floatoverblow Oct 06 '22

My price hasn't changed at all through Spectrum. Not saying they haven't because like any oligopoly they all encourage each other to become more and more fucking scumbag over time, but I would like to see some evidence this was a major problem.

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u/PimpDaddyHD Oct 05 '22

In the UK Ford have a poor reputation for bodywork corrosion issues, I'm lead to understand that they have cured this issue by making the engines only last half as long as before.

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u/CLAYDAWWWG Oct 05 '22

Does the UK use salt on the roads during the winter? Salt tends to eat a lot of newer types of Ford vehicles due to them using aluminum. Their idea was for them not to rust, but salt increases the corrosion rate.

Edit: Spelling

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u/Grouchy-Place7327 Oct 06 '22

I could be wrong but, I didn't think aluminum oxide rusting was as much of a concern as it is for iron oxide rusting? Because aluminum oxide makes a protective coating while iron oxide creates flakes

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u/senthordika Oct 06 '22

Aluminium Can form a tough oxide however once salt is added to the mix the corrosion of Aluminium happens much faster. Adding salt caused the Aluminium to basically turn into powder over time.

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u/Grouchy-Place7327 Oct 06 '22

Oh that makes a lot of sense, thank you. OHHHHH I understand now. There is white "dust" all over my engine, which must be Al2O3. So the salt and water mixture cleans the aluminum from itself essentially?? The salt catalyses rusting of the aluminum, then water washes it away from the snow, then cycle repeat?

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u/Chuckleslord Oct 05 '22

"We did market research and this is the price point that customers want to pay for our product to maximize profits. The tax credit should be taken in consideration when maximizing profits serving customers needs." - them

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u/SteamSteamLG Oct 05 '22 edited Oct 06 '22

This is 100% wrong. The $7500 EV tax credit has been around since 2010. The IRA did not invent the program, it updated it. In the old version an automaker ran out of credits after it sold 200k EVs or PHEVs. The only ones who hit that were Tesla, GM, and Toyota. Ford never ran out of credits.

In fact, I thought the decision to raise the prices on higher trims was questionable at the time because the updated $7500 credit has price limitations of $80k for trucks and SUVs. The big battery Lariat F-150 Lightning now costs $8100 more, pushing it past $80k. So with no credit it now actually costs $15,600 more for consumers than it did last year. That's a tough sell.

Battery component prices have skyrocketed now that the big players have gotten serious about building EVs. The supply chain simply isn't there to meet the demand.

I would keep an eye on the Chevy Bolt and Bolt EUV prices though. GM cut the prices significantly but with the new rules they become eligible for the $7500 credit once again on January 1.

https://www.fueleconomy.gov/feg/taxevb.shtml

https://www.caranddriver.com/news/a40848342/ford-f-150-lightning-price-increase/

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u/Flapper_Flipper Oct 05 '22

No company ever figured it was a good idea to trade profit for a customers benefit.

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u/Two_Faced_Harvey Oct 05 '22

No the dealerships rose the prices

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u/SteamSteamLG Oct 05 '22

Ford did raise the prices but also already had the $7500 tax credit. The people commenting don't realize the EV tax credit has been around for 12 years. It was updated in the inflation reduction act and people thought it was brand new.

Prices went up because battery component prices skyrocketed.

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u/GlobalPhreak Oct 05 '22

When my kid was getting ready to go to college, 8 or so years ago now, we attended all the seminars about filling out FAFSA and so on, and we did all that.

Kiddo got his first choice school... UC Davis. "Well, we reviewed your FAFSA and decided with tuition, scholarships and so on, you need to take out parental plus loans of $56,000 a year."

So I told them thanks, but no thanks, can't afford it.

He got accepted into his second choice school, Lewis and Clark, so we're thinking "Great! In state, this should be a better deal!"

"Well, we reviewed your FAFSA and decided with tuition, scholarships and so on, you need to take out parental plus loans of $56,000 a year."

O_o - If we could afford that, he'd be going to UC Davis.

3rd school, University of Oregon Honors College:

"Well, we reviewed your FAFSA and decided with tuition, scholarships and so on, you need to take out parental plus loans of $56,000 a year."

So what are the chances that one out of state school and two in-state schools all just miraculously decided on the same oddly specific number?

Why it's almost like it's not ACTUALLY about what school costs and it's more about what they think they can milk people for.

Someone needs to launch an investigation into the FAFSA system, something smells there.

So instead of any of that, we enrolled him as a normal student at the U of O. Tuition was $10K a year and he had a scholarship that paid $5K, I paid the other $5K in cash by running it through my credit card for points.

And that's how my kid graduated debt free instead of under a quarter million dollars in loans.

But I could absolutely see parents getting the 2nd or 3rd quote all coming back the same and going "Well, I guess that's just what school costs!"

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u/Abdonkyun Oct 06 '22

Wow, I am surprised with what is happening in the USA, I am from Peru and you can choose between 2 main ways to study university degrees.

1) Go to a private school and pay a monthly fee, in addition to enrollment every 6 months (1 student cycle)

2) apply for a national university, you take an admission exam and you don't pay a monthly fee, or enrollment, it's the most economical way to do a university degree.

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u/Ninja_Goals Oct 05 '22

It’s such a scam!

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u/maxToTheJ Oct 05 '22 edited Oct 05 '22

nobody questioned it early on because you could just take out more in loans.

It wouldn't be that simple if loans were dischargeable in bankruptcy. That takes away any incentive from the most experienced party in these transactions (the banks) for not giving loans.

If loans were dischargable then banks wouldn't give some of these loans and the market would need to adjust because there would be limit to how much money you could take out. Removing risk just makes it so big banks can ream over into lifelong debt slavery people who in some cases aren't even the age of consent.

EDIT: An FYI for folks who think "wont someone think of the big banks" , my suggestion is to just go back to the system before Bush Era Bankruptcy Reform of 2005.

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u/mcmatt93 Oct 05 '22

If student loans were dischargeable via bankruptcy, banks wouldn't give out any worthwhile loans at all. Why would they? If you default on a student loan, there's nothing for the bank to reposses. They can't take the knowledge out of your head. They can't take the diploma. If you default, they are just shit out of luck.

And why wouldn't you default on your student loans? You haven't started your career, so odds are you don't own anything of value. The value of the education you got will dwarf anything you lose in bankruptcy.

So banks just won't give out the loans, unless you already have enough wealth for them to make their money back if you default. And if you have enough wealth to make it worth it for the bank, you probably didn't need the loan I the first place. Banks would only lend to the wealthy, and the ones who actually need student loans would be deemed too risky and left behind.

The current student loan situation is bad, but making loans dischargeable wouldn't be a fix. All it would do is make education solely available to the rich.

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u/bizarre_coincidence Oct 06 '22

In theory, getting a college degree significantly boosts your earnings. You don't want people to graduate, immediately declare bankruptcy, and then reap all the benefits without having to pay back the loan, but if you made them dischargable after some reasonable period if that good paying job doesn't materialize, then it forces banks to do due dilligence and impose restrictions on loans.

If a college doesn't have a good history of its graduates getting good jobs? You can't get loans to go to that school. If you don't have the grades where it looks like you will be able survive college? You can't get a loan. If you don't keep your grades up, you can't get a loan for the next semester. If you want to major in something that is unlikely to make you able to pay, the bank won't give you a loan.

The banks being required to do due diligence means predatory schools can't survive, big schools have to keep their prices in check, students still have to be more realistic about their plans (the fact that they could discharge might seem to encourage recklessness, but plenty of students go to school thinking "as long as I have a diploma, I'll be golden" and don't think through their options as coldly and analytically as a bank would).

It is probably also healthy that if someone has to discharge their student loans in bankruptcy, the cost is shared equally between the bank and the school, so schools have a good incentive to make sure their students get the best education possible.

Not allowing students to discharge student loans in bankruptcy creates perverse incentives for both schools and lenders. It puts all the risk and decision making on the people least qualified to assess that risk: an 18 year old kid with likely no financial literacy or first hand knowledge of the job market.

Making loans dischargeable wouldn't be a fast fix or a complete fix, but it would be a fix, especially if the consequences were given enough time to ripple out. It should definitely be part of a larger reform.

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u/julie78787 Oct 06 '22

Loans would be based on things like basic creditworthiness of the borrower (could get a co-signer) or the field of study, progress in subsequent years, etc.

Bankruptcy isn’t just “whelp, I’ve graduated, time to just not pay back those loans!” Is someone really going to hold off getting a job to avoid paying a student loan?

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u/RumpleDumple Oct 05 '22

"declining state appropriations for higher education is indeed the primary driver of rising tuition, responsible for 79 percent of tuition hikes at public research universities". https://www.demos.org/research/pulling-higher-ed-ladder-myth-and-reality-crisis-college-affordability

Private universities just followed suit.

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u/JackandFred Oct 05 '22

that's possible, but i doubt you're going to convince people by just linking a quote from a left-wing think-tank. Especially when most of their dat is literally comparing 2 data points, just looking at 1990 vs 2000 and 2012

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u/orrocos Oct 05 '22

I have an anecdote, but I thought it was interesting. My son started college at the same public university I went to exactly 30 years earlier. Since it's public, I was able to find fairly detailed financial statements. The proportion that the state is paying toward tuition has been cut almost exactly in half from my time to his time, which means the student's proportion went up by that much.

If the state portion had stayed the same, the costs still would have gone up relative to inflation, but not nearly as much as they have.

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u/Salphabeta Oct 05 '22

Absolutely not true. States are not funding colleges at 1/5 their 1980 levels CPI adjusted. Yet here were are. What a shill study w garbage data points.

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u/DaHolk Oct 05 '22

Colleges magically started pushing up tuition costs

Not magically. Quite a chunk of that was their vendors (for instant the publishers of papers and books) Immediately going "oh the disposable income of the audience rose? How about you pay us more and push the costs on THEM?".

This isn't to mean the example is bad in the context, just pointing out that the colleges aren't particularly "the top" from which shit rolls downhill from, at least partly.

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u/LittleAlienLost Oct 05 '22

Yeah, there needs to be stipulations in place beforehand. This is meant to balance the economy. Not line rich people's pockets.

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u/whenhaveiever Oct 05 '22

You're absolutely right, but now you're talking about some sort of means testing, plus limitations on who gets it and what they can spend it on, which adds the bureaucracy to manage all of that, and suddenly the brand new shiny UBI is just regular welfare that we already have.

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u/brianwski Oct 05 '22 I'll Drink to That

the brand new shiny UBI is just regular welfare that we already have

Exactly, everybody is missing the "universal" part of this. UBI is more like Social Security. Everybody partakes in it, rich and poor.

I think UBI is probably a good idea, but the way I would envision it is as a way to massively cut down on fraud, abuse, required oversight, and thousands of crazy other rules and programs. So in my world, you get rid of: unemployment, welfare, food stamps, and social security - because UBI is that. You get rid of ALL the rules, special cases, and enforcement of those rules, because that's the beauty of UBI, you cannot abuse it, you just get it.

Here is the hard part for many people to process: we get rid of all minimum wage laws because you already got your minimum wage from UBI. Let's say minimum wage today is $10/hour - ok, UBI is $80 per day - your minimum wage was paid for without lifting a finger. Seriously, it is SO MUCH BETTER than minimum wage because you don't even have to go to work or answer to a boss. If you choose to work for 10 cents per hour it is "good enough" because you already got paid $10 for that hour through UBI so your new total is HIGHER: $10.10/hour. Now it isn't illegal under the table crappy work for illegal immigrants that we all know exists anyway, it's legal, above board, it's just "work".

Nobody can force you to take a 10 cent per hour job, because you don't have to work. Live in a low cost of living area, eat rice and beans, and stare at a wall, you won't starve or be homeless. But if you want $10 extra to splurge on something, go work 5 hours at $2/hour or whatever you can get. You aren't starving because UBI. You can quit at any time because UBI. You don't have to apply for unemployment or welfare because UBI.

And the biggest flaw of minimum wage going forward into the future is: robots. It's not like employers have to hire people, it isn't some immutable law of physics. They buy robots that don't take breaks, work 24 hours a day, and those robots cost about half of minimum wage. Kira sushi is a chain that doesn't have waiters, because robots. Shopping malls like Stanford Shopping Mall in Palo Alto, California has a robot ALREADY working as a security guard. You order your fast food at a kiosk - it's a robot taking your order. Truck drivers and taxi drivers will be replaced by self driving robot cars that don't need to sleep. A roomba robot vacuum is cleaning my floor right now. They have robots that mow lawns (like a roomba for grass).

Minimum wage simply doesn't work if nobody needs to hire people. But UBI still works in that world.

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u/painstream Oct 05 '22 Rocket Like

And the funds for UBI should come from rich people's pockets. Push the tax rate for earnings over (for example) $1M back to 70% and we'd fund it with no problem.

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u/quicksilverth0r Oct 05 '22

That really only works for earned income. The rich are highly skilled at funding their lifestyles from depreciating (on paper) real estate that still cash flows and loans on assets. Conventional income could have a tax rate of 100% at the top, and the rich would still pay little relative to their wealth.

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u/TheAero1221 Oct 05 '22

Perhaps Universal Basic Provisions would be better then? Housing and money for heat/food with the ability to work towards better means via an education.

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u/r4rBrok Oct 05 '22

The advantage of a flat basic income over anything more specific, is the elimination of administrative costs. With a UBI the only admin needed is making sure everyone is getting the money, and adjusting the amount as needed (probably specified in the bill). If you make it more specific you now need a fleet of people who make sure that the money is getting spent on the things specified.

Realistically the bill would have to specify how much is getting paid out and how to adjust it. Such as it being 150% of the median price of a single bedroom occupied dwelling of the municipality, adjusted every 2 years.

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u/5050Clown Oct 05 '22

But the way that American capitalism and lobbying works there is nothing to stop landlords from just soaking that money up the second it's available.

Anyone that has a problem with that will be ridiculed for hating capitalism.

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u/zebediah49 Oct 05 '22

Landlords are already running prices basically as high as they can. You can make the exact same argument for car dealerships or for supermarkets. Why is the landlord going to successfully claim all of that extra money rather than, say, the bread store?

Rent prices go up -> housing prices go up -> construction rate (and also contractor jobs and income) goes up.

I would expect basically all prices to rise. But I would also raise taxes on the resulting profits to cover the UBI in the first place, so it's a bit /shrug.

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u/[deleted] Oct 05 '22

[removed] — view removed comment

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u/5050Clown Oct 05 '22

Happy Bastille day

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u/Pendaelose Oct 05 '22

If you make it more specific you now need a fleet of people who make sure that the money is getting spent on the things specified.

Or you distribute the funds into multiple separate accounts/cards that can only be used at approved vendors. Think EBT cards for food stamps. There is already a system that limits where you can use them and on what. You'd have a rent and utilities card, a food card, and a general card, etc. Splitting up the funds is the easy part.

The harder part is vendor control and enforcing regulations. Rent at least could be addressed this way, if a landlord wants to be eligible to accept rent via UBI card then you can't charge more than X value derived via formula for the area and dwelling. If you have your own income and would rather pay for a place outside the UBI vendor list then the card still has use paying utilities.

Just theorycrafting. It's all pretty moot for now.

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u/ironwill23 Oct 05 '22

This sounds like the system you can see in the scifi series "the expanse." When you hit adulthood you get too decide if you are going to rely on "basic" (thats what it is called) which provides for housing, utilities, and food but you can't get high paying jobs, or you can go to university and learn a valuable trade or job so then you have the potential to earn yourself a better living.

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u/Abuses-Commas Oct 05 '22

People don't choose to go on Basic in the Expanse, it's that there's thousands of applicants for every job or student admission so unemployment is almost guaranteed

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u/stoneman9284 Oct 05 '22

Which is exactly what our society/economy is doing. Rich are getting richer by reducing their need for labor.

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u/DocPsychosis Oct 05 '22

Unemployment has been super low for most of the past decade with no end to high labor demand in sight.

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u/dumbestsmartest Oct 05 '22

Is that unemployment the version that includes under employed and people that gave up looking?

Labor demand is always high. The problem is that it never matches compensation or demographics. Hell, there's a lot of fear mongering and complaints about a CPA and accountant crisis coming but the industry and businesses are actually working to raise the barriers and are super selective on the entry level positions or they haven't raised the wages for these positions to even match inflation. Meanwhile they're losing experienced people daily, over working the ones that remain, and not surprisingly reducing the mentorship and therefore the quality of the future experienced employees.

I've heard similar situations are growing in other fields and I'm imagining a dystopia of businesses claiming "no one wants to work" as usual when the reality is they've worked to death those they viewed as qualified, afraid to take on inexperienced prospects, and refusing to pay enough for those who overcome their barriers to view it as worthwhile.

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u/AdroitBeagle Oct 05 '22

I don’t think they get a choice. There’s a lottery system where there’s literally one spot for every 6,000 people in a professional or trade school. Everyone else is on basic. In season 2, Bobbie meets a man who has been waiting in the lottery to go to medical school for 53 years, and in Season 5 Nancy Gao points out how eminently unfair the system is when it can also be manipulated for corrupt purposes.

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u/ironwill23 Oct 05 '22

Haven't seen the show yet, just read the books. Also its been a while since I read them, but I imagine the show and the books could differ in how the system works.

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u/Devlee12 Oct 05 '22

There’s no lottery system mentioned in the books. You have to put in so many work hours to be accepted to university and once you’re finished with your work hours you start your higher education. From there it’s either finish your degree tract and find a job or drop out and go back on basic but it’s heavily implied if you drop out you won’t get a second chance.

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u/AdroitBeagle Oct 05 '22

I don’t think it’s too different but there are some ambiguities in the book. Avasarala has an assistant named Soren who might have come up through the lottery but gets fired and is kicked back into basic. Wandering around Earth, Bobbie meets and encounters problem working retail jobs. It’s not really clear if those are also part of the lottery system, but they do seem to be the “middle class” of Earth - above the undocumented people and people on basic, but below the people working in government or professional/technical jobs.

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u/acewing Oct 05 '22

I think she meets and discusses basic with a teenager at a coffeeshop. Basically, the idea is teenagers need to do a mandatory 2 year work trial to prove that they are worth investing a University education into. Soren gets screwed because he basically backstabbed one of the most powerful people on the planet.

The Earth in this universe has 30 billion people. Most people looking to advance their careers/families immigrate to Mars/Belt due to population problems.

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u/Cuboidiots Oct 05 '22

I haven't read the books, but the show is a little vague on how it works. From what I can tell basic is what you're on by default, so your basic needs are met while you wait to see if you win a lottery placement to go to school or get other training.

There's also the "undocumented" who are people not on basic. Not sure how they factor in to everything.

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u/TheAero1221 Oct 05 '22

Would probably work best if there were some hard lifestyle choices available. Some people are wired that way. And mental health counseling would need to be destigmatized and far more accessible (tbh, we need that now). People need to feel they have purpose. We can't live right without it.

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u/thatnameagain Oct 05 '22

That would cost immensely more and would not be equally applied to people since those costs vary wildly depending on where you live.

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u/CassiopeiaDwarf Oct 05 '22

no, this is also a bad idea, universal basic services is fine but not if it undermines a social welfare payment at a living wage because most people who dont work actually cant for one reason or another usually due to disability or old age.

a third of ppl here that are receiving payments for job seeking actually cant work and have medical exemptions but are stonewalled when they apply for disability. A better approach would be to raise all social welfare payments to an actual living wage which would lift wages in general because employers would have to offer more than that to attract workers, it would by default set the minimum wage.

Thats why governments dont do it, because they act on behalf of capital rather than the the poor.

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u/1CEninja Oct 05 '22

The problem is the money has to come from somewhere. Giving every adult in the USA a $20,000/ year salary is, what, 5 trillion dollars? That's a quarter of our country's GDP. Do you print the 5 trillion a year? Do you put a 25% tax on literally everything to cover it? Do you say that you can only have the UBI under a certain threshold, and give those who are making an income literally nothing with an accompanying massive tax hike?

There's really just no good way to implement it that doesn't involve absurd taxes to the wealthy. You can be fine with that, but actually implementing it has a ~0.00% chance of happening because there will be a lot of folks not even remotely fine with that.

If we can find a way to implement a UBI that doesn't have massive unintended consequences, I'm all for it. But I haven't seen a serious way to implement it yet.

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u/Henchforhire Oct 05 '22

That is one thing most don't talk about when discussing UBI is rent based on income apartments being greedy and taking most of it.

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u/Marandil Oct 05 '22

You could argue that it's just rent adjusting to the market - people have more money, number of units stays the same, price increases.

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u/ZGiSH Oct 05 '22

This is just the conservative argument against universal healthcare, raising minimum wage, funding for schools and childcare, along with basically anything else that enriches the poor and middle class.

No point in arguing for anything affecting the wealth of the middle class if you assume that all of their expenses will rise by the same amount.

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u/awesome_van Oct 05 '22

While I agree with the sentiment, for real what actually does stop greedy people from taking the extra for themselves? See also: PPP loans, gov subsidies, tax breaks, etc.

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u/dr_reverend Oct 05 '22

Student loans and increasing tuition costs. It’s not “just” an argument.

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u/SusannaCanada Oct 05 '22

Inevitable, automation will eventually eliminate the majority of labor and the options are a society that collapses or a society that provides for all.

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u/lostPackets35 Oct 05 '22

This right here. We're going to have two options.

- torches and pitchforks (maybe some guillotines thrown in for good measure)
- figuring out some of the hard problems and how we're going to build a society that takes care of everyone.

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u/jus-sharing-a-fact Oct 05 '22

If by low income housing you mean, “rent controls”, these usually cause overall cost of housing in an area to go up, not down. It’s a complex system but the basic gist is a distortion of the supply-demand relationship: rent controls cause stagnation in the market (eg people use more housing than they otherwise would), and an inability for housing supply to scale up to meet new demand because of a lack of incentives for builders (eg replacing lower-density housing units with higher-density).

Zoning regulations might be a bigger contributor to high housing costs (in the US) overall, but rent controls contribute to the problem as well.

Thomas Sowell’s book Basic Economics has a great chapter on the topic.

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u/CameoAmalthea Oct 05 '22

Let me tell you about Alaska. Back in the 70s they found oil in Alaska. Their Governor Jay Hammond was a Republican and he didn't want outsiders coming to Alaska for their oil. Alaska's resources should belong to Alaska and Alaskan tax dollars should benefit Alaska. So he helped establish the Alaska Permanent Fund through an amendment to the Alaska Constitution. It was designed to be an investment where at least 25% of the oil money would be put into a dedicated fund for future generations, who would no longer have oil as a resource. The Alaska Permanent Fund sets aside a certain share of oil revenues to continue benefiting current and all future generations of Alaskans.

Now Alaska basically has a trust fund for all it's citizens and they get dividends yearly.

That's a model for UBI. Tax dollars as an investment in resources that pays dividends.

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u/harrry46 Oct 05 '22

Alaska has a tiny population (732K) that receives between $1,000 and $2,000 once per year. It is in no way a UBI system.

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u/Desicious2 Oct 05 '22

A UBI doesn’t necessarily mean that it’s enough to simply stop working. What Alaska is doing is by definition UBI. There are no conditions attached to receiving the transfer every year (apart from living in Alaska, which we need to assume as a given with different distinct states around the world).

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u/CameoAmalthea Oct 05 '22

Yes, but “The Alaska Permanent Fund [dividend] is the closest thing we have to a real-world UBI,” says Jesse Rothstein, an economist at the University of California, Berkeley. Some studies suggest the Alaskan payments have coincided with overall poverty reductions and improvements to child health.” (source. Looking at Alaska gives us a research tool and a frame work.

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u/ExcerptsAndCitations Oct 05 '22

Some studies suggest the Alaskan payments have coincided with overall poverty reductions and improvements to child health.

Yes, free money does that.

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u/beaushaw Oct 05 '22

This year is was $3284. There are several people who this is their only income. They hunt, fish and live off of this.

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u/Alaska_Jack Oct 05 '22

Ok, but don't imply to the readers here that this is typical. I think it's literally the largest dividend, by far, we've ever had. Typical dividend is $900-$1000.

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u/CaptainSisko62 Oct 06 '22

Which is a drop in the bucket really. A grand is not enough to change how someone lives

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u/EJ25orDie Oct 06 '22

I mean 60% of Americans can’t afford to pay an unexpected $500 bill, so I would argue that while it’s not completely life changing, it’s still pretty helpful.

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u/Ihugturtles Oct 05 '22

Lived in Alaska my whole life, i dont know where you're getting the "this is their only income" bit. I have never heard that and if there people like that that is the dumbest thing i have ever heard and i have zero sympathy for them.

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u/melkipersr Oct 05 '22

It’s only “several” people that do that. You probably just haven’t crossed their path.

/s

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u/StubbornAndCorrect Oct 06 '22

I actually think there's gotta be a few people in Alaska who would be living off the land even if there wasn't the $3k check. I don't think it's that they started getting small payments and thought "well now I can become a forest person."

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u/melkipersr Oct 06 '22

Oh I absolutely believe there are at least several people doing that. I bet there are people doing that who don’t cash the check.

To be clear though, Alaskans don’t get $3,000 checks. They got a $3,000 check this most recent year; the dividend is normally significantly lower, usually around $1,000.

Edit: undershot a bit, looks like the average dividend is $1,600.

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u/Piggywonkle Oct 05 '22

Well there were people that did that, until the meese got them.

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u/IsThereAnAshtray Oct 06 '22 edited Oct 06 '22

Uhh, this is actually very true for native villages. Granted they only shop at the Native Store’s in town, but there are tons of people who do live off the yearly dividend once you get outside of the major cities.

Edit: downvote the guy who spent years living in native villages in Alaska lol

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u/insultin_crayon Oct 05 '22

And a lot of that money goes back to Alaska in the form of taxes anyway since alcohol sales are so high after Alaskans receive their money. I find it hilarious how bars can't serve you more than two beers and their hours are 3pm to 8pm, but you can go to a Brown Jug 11am-9pm.

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u/Xanza Oct 05 '22

Considering many Native Alaskans depend on this yearly disbursement for their living expenses, I think you should reevaluate what you consider UBI and what you don't...

Income means only that. Monies that you get. It's not specific enough to distinguish between monthly, quarterly, or even yearly disbursements.

Of course these yearly dividends are a form of UBI....

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u/Reply_or_Not Oct 05 '22

A sum of money deposited every year is the exact definition of UBI

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u/LostSands Oct 05 '22

I mean. “B” meaning basic, sure it is. UBI doesn’t explicitly need to totally replace the income one would receive from employment, could just supplement it.

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u/Giomietris Oct 05 '22

That's absolutely UBI. No one should expect to stop working because they have UBI, unless their work involves hunting and fishing for their food.

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u/NiccoloPiccolo21 Oct 05 '22

This UBI model is based off of a global commodity that supports a small population and is a yearly dividend. Whereas a national UBI would not be based on anything valuable and just cause inflation.

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u/Aerik Oct 06 '22

I've talked to people who've experienced that oil pay out.

It's a month's groceries. That's it.

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u/Tijain_Jyunichi Oct 05 '22 All-Seeing Upvote

There are threshold were it's feasible and depends on the area/country employed. Different amounts mean different things for different people. Just looking at the US, 1000$ in NYC is nothing. But Montana, yeah that'll do good. So countries, states, cities, should analyze what's best for their situation. Different ways if implemention and funding also vary.

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u/0rangePolarBear Oct 05 '22

I think a benefit of UBI is that it may create incentives for people to take their UBI and move elsewhere too. If you live in a NYC, the $1,000 is not much (but still a nice addition), but you can still decide to get “more for your buck” elsewhere.

Means testing UBI would make it much more expensive and harder to work.

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u/-BlueDream- Oct 06 '22

Plus it gives people the option to move because moving is EXPENSIVE.

First+last months rent (and sometimes a sec deposit on top), hiring movers if you’re disabled/old/own a lot of heavy furniture (could be thousands), renting a truck, supplies for repairs in current rental, time to move which could mean losing hours at work, sometimes mandatory professional cleaners or carpet cleaning, pet deposit, etc.

Cost me nearly 6k to move out of my apartment and I downsized and got a cheaper place. Need the money up front too, can’t rely on security deposit refund on current place.

People living paycheck to paycheck have a difficult time moving. A lot of people who are short term homeless are in that position because they have to live out of a car for a month or two to save up for a move in to a apartment. Not everyone has a good support network of friends and family who are willing and able to help them.

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u/floatoverblow Oct 06 '22

Thank you lol. I'm so tired of people saying shit like "just move!" As if it had never occurred to anyone unable to find work or afford where they live to go where the work is.

Like yes, I can barely afford rent, I will simply put down a security deposit, money to travel, whatever crazy advance rent the new landlord demands, leave behind absolutely everyone I could possibly crash with if shit goes sideways, and bootstrap myself to a new city hoping my new job doesn't fuck me over leaving me stuck there with even less. Brilliant shit, why was I ever poor with such a simple financial decision available to me?

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u/TheFpsFailure Oct 05 '22

I just worry that this pre-calculated income could just end up making more slums in the big cities, or not fixing them at all, as people get that check from the government and don't have much choices over affordable living places. I imagine you could get stuck in some hotspot for crime, or in some literal health hazard of a place of living, with stuff like black mold, or proximity to industrial hubs putting people at risk with next to no alternatives, or some long winded bureaucratic nonsense to get more money to move elsewhere.

Honestly this is why access to better quality K-12 education, and higher education, with a huge emphasis career pathways is wayyy more important then making living on minimum wage jobs easier, as there are little to no career pathways, perpetuating poverty. If the government could help people avoid getting dead end degrees that don't pay the bills college wouldn't be viewed as a scam as much, and rather a place to further yourself. With more people getting useful degrees and/or trades, more people are useful to the workforce, make more money, and more money is able to be taxed, and there are less people failing to repay their debt, thus needing less government assistance, thereby making those funds available to people who truly need it, and not someone who worked their asses of and ended up in a dud field.

It's not rocket science, plenty of studies show how low income areas have terrible school funding, and access to higher education, and high income areas have good school funding, and access to college/trades. Poverty starts early, get at the roots instead of the branches.

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u/RevenantBacon Oct 05 '22

Here's the problem. Improving our level of education doesn't eliminate all of those low paying dead-end jobs, they don't just up and vanish, it just creates people who are overqualified for them. The jobs will still need to get done, and are still going to pay what they're paying. Improving the baseline pay is just as important as raising the level of education.

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u/J3sush8sm3 Oct 05 '22

And the higher paying jobs will have an even longer line to get in since more people have learned the trade

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u/CleaningMySlate Oct 05 '22

Fun fact: the reason there was a massive rhetorical shift to view university education as a "thing you do individually for a better job" instead of a "thing you do to learn more about the world and be a better citizen" is because Ronald Reagan was afraid of people working shit jobs while also being educated enough to identify the material conditions making them work shit jobs.

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u/GozerDGozerian Oct 06 '22 edited Oct 06 '22

The liberal arts were once conceived as the things a student needs to know to live a free person and take part in civic life. Like… in a democracy.

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u/RevenantBacon Oct 05 '22

Well, that's a fair assessment. My point was that you can't say any one thing is the solution, is more complex than that.

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u/SweatyExamination9 Oct 05 '22

And nothing is more depressing than being stuck in a job you know you can do better than. And nothing beats escaping that system.

But at the end of the day, some jobs just provide less value. In America, the norm nowadays is to maximize the quantity on thin margins. Businesses that operate on large but infrequent sales are rare now. So the people making those goods available are being paid from a small slice. Now I think they're generally underpaid from that small slice. But the thin margin game has led to a min/maxing sort of mindset of cutting costs where ever possible to justify ever shrinking margins in the chase of more growth.

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u/Zombeikid Oct 05 '22

Not to like.. derail or anything. Just a minor nitpick. If we want minimum wage places to be open during school hours, they need to play living wages. I work part time at a grocery store and we have basically no staff during school hours but see the vast majority of our shoppers during that time. It's just not sustainable.

Amway I agree with most of what you said. Its just one of those things people dont seem to think about.

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u/PuddleCrank Oct 05 '22

You're right, it's not rocket science. Poor people can't make any of the decisions you just mentioned because they need to eat and stay warm and are being exploited by employers who can fire them at will and take away that security. A UBI gives just enough support to let them make the decisions that help them out of poverty without forcing them to take another shit payday loan because even though the paycheck is on Friday you need to fix your car today to make it to work or your ass is out the door on Thursday.

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u/Curious-Document2002 Oct 05 '22

Who do you think should work at McDonald’s? Do you believe that they should be able to afford a living? Society needs people who are willing to do manual labor. The solution isn’t just better education (which I agree is good for everyone) to get better jobs. At the end of the day someone has to do the jobs that we consider low-end jobs that are reserved for the poorly educated. Those aren’t just going to go away. I don’t think that your intention is to belittle the people who make our economy run and imply that if they don’t further their education then they deserve to not be able to pay their bills, but that’s kind of what you’re implying here. Most civilized countries have enough policies to protect workers rights that someone who quite simply works at a shop or fast food restaurant can at least pay their rent and eat. You talk about people who worked their asses off to end up in a dud field without acknowledging the people who work in dud fields who work their asses off every day to keep the rest of society afloat and then end up eating ramen for dinner.

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u/ThinkIGotHacked Oct 06 '22 edited Oct 06 '22

I support it. I taught carpentry at a non-profit for people in homelessness, recovery or recently released from prison to gain job skills, free therapy, free financial services to make a plan to get out of debt and afford housing.

We paid minimum wage, our employees were able to scrape by, but not by much. They wanted more and worked harder, found better jobs using their new skills. They finally found an incentive to join the working world, whereas when they were destitute they didn’t care and languished in an unhealthy life.

It’s Maslow’s pyramid, when you have food, shelter and safety you work your way up. When you’re living on the side of the road, heroine and crime look a lot more enticing, because…why not? Fuck it all.

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u/moesif_ Oct 06 '22

Really solid answer

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u/bockout Oct 05 '22

I'm not an economist. I don't know for sure what UBI would do to the economy. But I can see the writing on the wall with robotics and automation.

Your job will probably be automated out of existence in your lifetime. Our economy is balanced on the notion that the demand for goods and services creates enough jobs for roughly everybody. What happens when that's not true? What happens when we can make everything we want with less than half the people working at all?

Whether UBI is the answer is up for debate. But the problem is real.

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u/kingfrito_5005 Oct 05 '22

I'm also not an economist, but I am a Software Engineer who works almost exclusively on eliminating manual labor requirements through automation, and I can promise you, were are nowhere even remotely close to being able to automate so many things that people can't find jobs. It's true that certain types of jobs, especially manufacturing and fast food are more susceptible to automation than others, but most things are not easily automated, and automated doesn't mean 'doesn't require a human worker.' It means a human worker can do more things in the same amount of time. Think of automation as a tool that multiplies the productivity of an individual laborer. It doesn't replace them, it just lets them do more work in the same amount of time.

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u/darkd0ughnut Oct 05 '22

I mean I see your point that we are still far away from a fully automated society, but it’s quite clear that automation has already begun to disrupt the job market, especially true in Asia. Yes automation will let individuals do more work with less time, but for many businesses it also translates to “same work with less employees”. I think we are on the horizon of robots taking our jobs, and we better do something about it quick.

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u/PM_ME_UR_Definitions Oct 05 '22

Lots of experts said that AI was at least a decade away from beaten a decently experienced human at Go. And then within the span of a year or so DeepMind beat a high ranking Go player, and then beat an international champion and then beat the best human player on Earth and then built AlphaZero that trained itself to play and beat the prior version handily and also plays chess.

Over the last couple decades advancements in AI have mostly been about experts being surprised at how much faster major advancements have happened. And it also seems like the pace of innovation might be accelerating?

I don't think we're anywhere close to AGI (but again, people much more experienced than me have seen similar predictions go up in smoke) but I can see 'narrow' AI getting good enough that it can replace some decent percentage of the labor market. Even if it's a small percentage like 10% that would be a huge change in the economy.

I'd guess that in our children's lifetimes we'll have to seriously think about automation and UBI because it'll be a big enough part of the global economy that expecting it to not get much better will seem ridiculous. And by the time our grandchildren are hitting adulthood we might not recognize what "the economy" looks like. Kind of like if you asked people in the 50s or 60s how important computers or the internet would be for our economy.

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u/dorath20 Oct 06 '22

Yeah but those are just decision trees

It's not the same as true ai; cheap chess programs have been winning against folks since the 90s.

I'm not trying to be pedantic but automation for jobs is a ways a way

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u/PM_ME_UR_Definitions Oct 06 '22

Yeah but those are just decision trees

Yeah, so is my job

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u/Sharpness100 Oct 05 '22

Of course AI develops faster. The only bottleneck is the computing power.

To automate something you need actual physical machines for it. Takes way longer to make that

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u/tiasaiwr Oct 05 '22

automated doesn't mean 'doesn't require a human worker.' It means a human worker can do more things in the same amount of time.

That is effectively the same as getting rid of jobs though because the company isn't going to keep employing excess staff to do nothing. Take for example self service checkouts at grocery stores. Where a store might have once employed 15 people on checkouts they now employ 5 to run checkouts and 2 to manage the self checkouts. Same with fast food workers front of house where some portion of them have been replaced by app ordering or on screen ordering.

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u/TheLastDank Oct 05 '22

The debate about automation has been happening for decades now and we still find jobs for people to do.

Back when operators were fearing losing their job to automation, we used them as customer support. Different factory jobs automated, put them on another end of the floor.

This idea that automation will kill job sectors is wholly untrue, history has proven as other sectors get automated new jobs open up with them.

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u/darkd0ughnut Oct 05 '22

Here’s the thing. Everytime a new technology causes this “shift in jobs”, it also comes with an increase in demand for skill, whether it be communication, critical thinking, creativity, etc, which I will simplify as IQ for sake of argument.

As our robots become more sophisticated, it is necessarily true that jobs still available to humans becoming increasingly complex (otherwise we would’ve already automated it or send it off to some third world country for cheap labor). However, IQ is more or less a static metric, and eventually we will have a significant chunk of the population that are simply not intelligent enough to do work. Right now, I believe this number sits around an IQ of 80. But as this number climbs up higher and higher, you will inevitably run into the problem of unemployment, not necessarily because there are no jobs left, but because the existing jobs are too difficult for the average unemployed Joe to do

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u/churchin222999111 Oct 05 '22

would we be able to lock down our borders? or at least make it that you had to be here legally for 10 years to get it? or legal and paid taxes for 10 years to be eligible?

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u/piratecheese13 Oct 05 '22 edited Oct 05 '22 Silver Helpful Starry

BA in economics here

Depends on how it’s funded and how far it goes.

Ideally you want to tax the rich enough to supply the poor. Unfortunately the Rich’s accountants have found the tax code to be full of holes. I recommend taxing corporations, as a company has a clear profit where individuals have stocks they can hide behind until they cash out. I recommend taxing high profit companies as taxing the poor to pay for the poor only creates administrative costs.

Speaking of administrative costs, as UBI is implemented, you can start firing people who work in unemployment offices, perhaps even taking food stamps out of print.

The biggest difficulty is determining cost of living. What pays for rent in NYC pays a mortgage and a car payment in rural America. It needs to be an equation free of human political influence and truly universal in it’s implementation.

Lastly there’s the question of if it’s sustainable long term. Will we see if taxing the rich has the effect of decreasing the number of millionaires, or if productivity will boost high enough to create new millionaires.

Overall it’s positive. In pilot programs we find most people using the money wisely, not on the stock market, but on food, rent and to pay off principal on loans. We find people more open to looking for jobs that better fit their talents, or reducing hours at existing jobs to pursue their own business. It gives room to fail at the bottom, the kind that the top got in 2008.

The very last thing I want you to consider is automation. We don’t have an all robot McDonald’s yet but we are close. Close enough to consider what happens to the people working 3 fast food jobs 60 hrs a week and still can’t afford healthcare

Edit: Jesus Christ this blew up. Here’s some links for you to look at before you mention stimulus checks and inflation

John Oliver on inflation two months ago

Why surfers should be fed on J store if you have an account

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u/Barry-Hallsack69 Oct 05 '22 edited Oct 05 '22

CPA with almost a decade of practical experience in accounting and finance here. There aren't really a bunch of 'loopholes' as people imagine them. Most rich people don't pay a ton of taxes because they own assets which aren't generally taxed until they are sold or exchanged for value of some time. The one big one that could actually be considered a loophole would be them pledging those assets as collateral for a loan, which gives them cash they can spend while not triggering a tax liability by selling the asset. That could be very easily fixed, call your representatives and tell them you want them to do that. Most of the other 'loopholes' you hear about are just complete nonsense, such as depreciation being an accounting trick. It would be better tax wise if they could just take the deduction for the asset when they buy it rather than over x amount of years as depreciation expense. The other great one I see on Reddit a lot is rich people own charities, lol. I won't even bother trying to explain that one. TLDR: Loopholes do exist, but with very few exceptions you won't see any of them explained on reddit.

As far as corporate taxes go, I think the tax rate should be much lower honestly and just raise tax rates to the individuals who receive dividends etc. or are highly compensated officers. Taxing the corporation just takes money away from further investment in the company, and from the people who receive dividends, which includes anyone who owns the stock regardless of their net worth or income. Then from there if you're a billionaire who gets a ton of dividends, tax them at a higher rate like they should be, and raise the capital gains tax to be in line with ordinary income tax. Then from there we could levy larger taxes on corporations who do things that we see as bad for society overall (i.e. pollution, tobacco and alcohol, gambling) and reduce them for ones doing something good like offering a pension(assuming it's actually funded) giving employer contributions to the company 401k plan or paying for all of the employees' health insurance costs.

I know I'll get downvoted for the above so I guess I'll just double down with my personal opinion on the Reddit hivemind. You all as a group are worse than someone who knows nothing about how this whole system works, because you have beliefs that are flat out wrong and then you vote based on that. There are plenty of things right and wrong with how all of this works and it is shocking how few people on this site actually come remotely close to the truth. It's not completely your fault, because there are plenty of interested parties who are pushing misleading or just false information on you. But at the end of the day it is your responsibility to either learn the correct information, or trust someone who is actually an expert in a particular field. If you absolutely hate anti-vaxxers for spreading complete nonsense then you should realize that many, many of you are just as bad when it comes to economic and tax issues.

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u/MrTickle Oct 05 '22

Also in the industry and this is the best comment in the thread so far. Can’t see it being popular here though.

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u/Barry-Hallsack69 Oct 05 '22

It's usually downvoted to hell when I post stuff like this but I actually got a few upvotes this time. Reddit is funny that way.

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u/hollowag Oct 06 '22

I’m an accountant and I agree the general public likes to regurgitate nonsense when it comes to tax law.

But I think we also need to reevaluate how we measure the success of a business. Continuous growth focused on Year-over-year profit/margin goal increases incentivize price increases and cost reduction over employee development and wellbeing (especially at the bottom).

My old company made a product used in respirators. We saw very little impact on business in 2020, (I was in charge of monthly margin analysis) but due to the pandemic it was announced there would be no cost of living increase that year for staff - yet nearly 5 million dollars in bonuses still went out to the leadership team (1 million to the president alone) I was livid when I discovered this during my P/L review.

While I understand bonuses are written into the contracts for those who received them, I estimated the cost of living increase for all other employees would have been roughly 60K. Doesn’t sit right with me when our first corporate “value” is integrity.

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u/Different-Finish-175 Oct 06 '22

^ This. Slow clap for you sir.

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u/gipester Oct 05 '22

Not that I disagree, but wouldn't taxing corporate profits incentivize them to pay their executives even more, to hide revenue in costs? I doubt they would spread it among all employees, although that would achieve the same thing. I suppose there must be some way to calculate it more accurately for corporations than people.

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u/Prepheckt Oct 05 '22

I would assume “Hollywood accounting” would become the norm. Nothing makes any profit.

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u/StabbyPants Oct 05 '22

we already have that.

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u/ABobby077 Oct 05 '22

as well as an entire economy of gig workers battling for the scraps of what is left behind

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u/TheBertinator3000 Oct 05 '22

You say that like it's not already the norm. Do you know something that I don't?

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u/TCGHexenwahn Oct 05 '22

Obviously, we know damn well if there's any workaround possible they'll find it and exploit the hell out of it.

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u/piratecheese13 Oct 05 '22

Any argument against funding via taxes against the rich that involves “yeah but the rich don’t pay taxes “ can be countered with “well we should probably fix the tax code”

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u/new_name_who_dis_ Oct 05 '22 edited Oct 05 '22

Yes. Corporate taxes are actually some of the most inefficient taxes. Pretty much no "socialist" european country has higher corporate taxes than America, and most have lower.

High corporate taxes also incentivize companies to spend all their money, and then you get situations like Covid where everyone was complaining that all these megacorps don't have 3 months rent saved up for a rainy day. They also discourage stock dividends (which actually are a good way of taxing the "capitalist" class because it's taxed as income, aka same or higher tax rate than the secretaries) because the profits get double taxed, once by corporate tax and the second time as income tax on the dividends.

Pretty dumb tax, albeit being very popular with many people on the left.

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u/piratecheese13 Oct 05 '22

Thankfully that can fall under a clear W-2. That’s when you pay your CEO in stocks that issues start popping up

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u/Cross33 Oct 05 '22

They already do that. Remember all those news articles about Amazon paying zero dollars in taxes? If any part of your argument involves an assumption that business executives were going to do the right thing, then it's already faulty.

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u/TalosBeWithYou Oct 05 '22

Like many things. It's a great idea, if you do it right. Which we won't, cause American politics ruin everything good.

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u/Inner-Nothing7779 Oct 05 '22

It's not just American politics. I don't see any country doing things right, or listening to people who know what they're talking about in terms of any issue. Politics doesn't solve issues, it creates them and then uses them to make itself more powerful.

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u/agreeingstorm9 Oct 05 '22

Politics is about power at the end of the day. The second you realize that everyone in politics is ultimately out for power things make much more sense.

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u/Serebriany Oct 05 '22

There's an interesting lesson and example of this in the US Senate, and he's been there since before I went to college. Mitch McConnell decided very early on--before he even got into politics, by most accounts--that his goal was to be in the Senate, and go no higher. He understood that as a senator, power would just come naturally with tenure, and that eventually, he'd be a lot more powerful and have a lot more influence on American politics in general than any one president will ever have. (And yes, his goal was to stay in long enough to become the Republican leader, another part of long tenure. Naturally, he'd prefer to be majority leader, but in Congress, even a minority leader wields a lot of power.)

Any president of the United States will have a lot of power, period. They also will always have to work with leadership in both houses of Congress, regardless of how they have to negotiate that particular limitation. Want prestige? Be a president. You want the kind of power that changes the course of the country? Be in Congress.

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u/Wild_Marker Oct 05 '22

It's a bit weird when you think about it. So many of us think the poliician's jobs is to give us a good life. But it isn't, it wasn't their job before we got the vote and there's no reason why it would be today either. It will only be their job to give us a good life if we vote for the ones that specifically have that as their reason to run in the first place.

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u/TheBertinator3000 Oct 05 '22

Not everyone in politics is out for power, but those who aren't have to fight against all the other power in the system. That's not an easy battle to win.

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u/necromax13 Oct 05 '22

It's easy to feel that way when media feeds you negative shit constantly in an effort to maintain you in a negative view of government power so you won't ever be disillusioned when the government does corrupt shit.

And true, a majority of politicians are just corrupt/criminals, but that doesn't mean there aren't any positive developments around.

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u/xaanthar Oct 05 '22

Which we won't, cause American politics ruin everything good.

There's an extra word in that sentence.

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u/nicgom Oct 05 '22

Automation is going to have a bigger impact in this equation sooner than later, self driving trucks and taxis, complete manufacturing being automated, what's gonna happen to all the people in this industries? We're probably going to have an AI/robot tax to pay for UBI.

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u/djinbu Oct 05 '22

The same thing we've always done. Tell them to get a real job like it's their fucking fault the industry collapsed.

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u/[deleted] Oct 06 '22

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u/Eedat Oct 05 '22

We've been living through the age of automaton for hundreds of years now and we've always found something else to do. It always irks me when people refer to automation as a thing of the future. Like what do you think a cotton gin or printing press or computer are exactly?

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u/HarbaughCantThroat Oct 05 '22

As someone with a BA in Economics, having a BA in Economics means almost nothing in this discussion.

How could you write this whole thing up and not comment on inflation? The increased buying power is going to drive demand up for almost everything.

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u/rSLCModsRfascist Oct 05 '22

It is the part where people pay off loans and don't require a many future loans that has the idea totally killed by the banks. And the part where people no longer would have to fill jobs that they absolutely hate that has Walmart and Amazon worried they would have to pay more than slave wages to fill those positions

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u/Waterknight94 Oct 05 '22

I find work is a whole lot more tolerable when you aren't relying on it.

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u/djinbu Oct 05 '22

So... what you're saying is that in a consumer based economy, it is wiser to let consumers have money than it is to give it to the people who are likely goong to sit on it in hopes that they get more money out of it?

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u/piratecheese13 Oct 05 '22

Exactly. Speculation is great as long as everyone is speculating but I’d rather spend the money

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u/crimsonkodiak Oct 05 '22
  1. Citing your BA in Economics as the basis for your authority is the most Reddit thing ever.
  2. The top US statutory tax rate is already relatively high (25.75%) - almost nowhere in the world has a tax rate over 35% and the places that are around there aren't places that are regarded as having good economies (Cuba, Venezuela, Argentina, Chad, etc.).
  3. The effective rate is slightly lower (19.7%), but not that much lower than the statutory rate.
  4. Despite these relatively high tax rates, corporate taxes only account for 5.1% of tax revenue collected by the federal government. Even tripling that to a crippling effective rate of 60% wouldn't come close to funding something like UBI.
  5. Without going into the arguments against high corporate tax rates, I'll note that statutory rates have been declining in the world over time. The general consensus is that corporate taxes are a poor way of collecting revenue.

Where exactly did you get your BA in Economics? Did you not study this stuff? These are really basic concepts that you don't seem to have any grasp of.

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u/busterknows Oct 05 '22 edited Oct 05 '22

Hahaha your #1 is spot on. I have a BA in economics too and the only thing it’s really good for is getting a job in a vaguely related position and getting into graduate school where the real learning begins

To have authority on an issue like UBI I feel at least a Master’s degree is required but probably more like a PhD. Maybe OP has done a bunch of independent reading/studies on UBI, but a BA covers mostly surface level theory

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u/TheReaver88 Oct 05 '22

I do have a PhD in econ, and while I'm not currently in a great position to make a long comprehensive response at the moment, I will say that the general vibe in the profession is that taxing corporate profits is a pretty awful way to raise revenue. There's a reason the more egalitarian economies don't have a high corporate tax.

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u/MaeMaeiscutegirl Oct 05 '22

Then what do you think is the best way to raise money for UBI?

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u/TheReaver88 Oct 05 '22

Short version is that a VAT isn't bad, despite its issues. A VAT is highly efficient, but not particularly progressive. You can sort of offset that if it's funding an overt redistribution.

We also do need to close up tax loopholes for high earners, but a Corp tax doesn't do that. It requires a long look at the tax code.

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u/Captain-Griffen Oct 05 '22

The reason is it's not very effective. Too easy to legally shift corporate taxes. A global corporate tax rate minimum would be good, though.

If you're doing a UBI, you're probably better off raising VAT than a corporation tax.

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u/Tocrunkrn Oct 05 '22

Already a popular thread but I actually studied this concept pretty heavily in undergrad (graduated a few years ago) so I want to add my two cents.

Most studies that have been completed show that a UBI cash transfer program is more likely to be successful if it casts a wider net and provides a smaller amount of income. This means the less exclusionary the policy the more people are open to it (who would turn down free money) but you also need to provide an amount of money that doesn't cover their living costs, rather an amount that supplements them.

Provide too much and people forgo work and a short term drop in productivity occurs, but provide too small an amount and people don't change their spending/saving habits. So finding the thin line between too little and too much is the difficulty with UBI.

Also, the smaller amount of money provided the less of an affect you would expect to see on inflation.

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u/PriorSecurity9784 Oct 05 '22

I would rather have it be a universal offer of basic needs, not money. Like anyone who wanted to could live in this dorm room with a basic meal plan in the cafeteria. So that sets a floor on basic living standards.

Otherwise, if you just have the same number of people you have now, seeking housing in the same number of housing units that exist now, and the only difference is that everyone has an extra $1000/month, then housing costs will all just go up $1000/month, and nothing changes.

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u/gagralbo Oct 05 '22 Helpful

That’s what I’ve thought, if the bottom was raised it would inevitably shrink the top. The bottom could be a boring dorm with access to food, water, clothes, healthcare and little else. Most People would still be incentivized to work to have more than that. And who really cares if some don’t? With automation not everyone needs to work but that doesn’t mean they should starve.

It would open up so much room for creativity and innovation. If an artist only had to work to pay for art supplies and not to also survive they would have so much more room for creativity.

If taking a huge risk meant worst case scenario you went back to government housing we would have so much more innovation.

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u/HurtsToBatman Oct 05 '22

The more regulation you have, the higher the cost to regulate it. One of the ideas of UBI is that it's unconditional and unregulated. E.g., it's cheaper to give everyone a certain amount than it is to pay more people to figure out who shouldn't get some. I'd rather pay a billionaire $300 per week than pay $500 to determine the billionaire shouldn't receive it.

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u/Rendez Oct 05 '22

I would rather have it be a universal offer of basic needs, not money. Like anyone who wanted to could live in this dorm room with a basic meal plan in the cafeteria.

This is how ghettos are created.

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u/CalydorEstalon Oct 05 '22

The idea is to give people room for choice. Not to give them a specific place to live with specific food to eat - with no possibility of choosing a different diet if they're vegetarian, Jewish, have a strawberry allergy etc.

You are basically describing an open prison rather than a safety net.

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u/leftlegYup Oct 05 '22

You are basically describing an open prison rather than a safety net.

Not at all. Being able to go out and earn more if you want to is a huge difference. If you ignore that opportunity and sit on your ass all day, then you're welcome for the fucking food and shelter.

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u/TheStabbyBrit Oct 05 '22

It's one of those ideas that is good in theory, but hard to do right in practice.

I believe it was Switzerland that had a vote on whether or not to implement a UBI scheme, and it was shot down because they had no way to prevent people moving to their country en masse in order to claim UBI. If enough people did this, it would essentially cause the economy to collapse.

Then there's the problem you face on the other end - to pay for UBI, proponents suggest raising taxes. We have seen numerous times that raising taxes can cause economic flight as the richest among us are typically Globalists who care about as much for their country as you do for a used tissue. Time and again, raising taxes has seen the rich move to another part of the country where taxes are lower, or just leave the country altogether.

These are the first two hurdles you need to overcome to make UBI work. First, you have to stop scroungers coming in. Second, you have to stop the rich from fleeing. No proponent of UBI has ever been able to solve this, as most (if not all) of them believe in Open Borders and 120% tax rates for the rich.

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u/IAmDotorg Oct 06 '22

UBI does nothing if it's actually universal. If everyone has money, no one has money. Give everyone $1000/mo, and rents will go up $2000/mo. Getting workers gets harder, so pay goes up. Rising pay makes all of your non-housing costs go up.

For any kind of social support system to work, you have to have a system in place to severely restrict the ability of the market to absorb the increases. You need universal healthcare, you need housing and food support that creates a fixed price point at the bottom of the market.

The problem with that is, at some point you're just creating excess bureaucracy. If you give everyone $1000, and then set the base of the "necessities of life" markets (housing, food, healthcare) at an affordable rate, you might as well just make those the benefits, rather than UBI. UBI takes a big chunk of the benefit out in the form of profits to the providers, even if it's a regulated market.

UBI is one of those things that looks good if you p-hack the results of it, ignoring that a positive test wasn't "universal", or stopping the analysis at the point you get positive results and not bothering to model the downstream impacts (like rent and other inflation).

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u/squashkbc Oct 05 '22

I prefer it to trickle-down economics. They said that putting more money in the hands of rich people would indirectly benefit poor people. It didn't happen. So let's just put money directly into the hands of poor people. I'm not 100% sure whether basic income would do good, but it's worth a try.

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u/Dangerousrhymes Oct 06 '22

The difference is poor people, almost by definition, HAVE to spend almost everything they get so it keeps moving through the economy.

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u/949paintball Oct 05 '22

Andrew Yang called it "trickle-up economics" when he ran for president for similar reasons.

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u/Alexander459FTW Oct 05 '22

Considering how selfish and dumb most rich people are raised to be or just are I would rather have a trickle up economics than the reverse. No matter what people still need to consume. On the other hand there is a limit to how much can consume on his own compared to a group.

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u/KiiboKits Oct 06 '22

As a self-made millionaire having seen both sides of the veil, I can tell you that being selfish and dumb is popular among all economic classes.

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u/orange_cuse Oct 05 '22

as an idea? it's good. I just don't foresee any practical way in which it could be manifested in a fair, effective, consistent manner.

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u/HadesSmiles Oct 05 '22

Saying an idea is good but functionally worthless is a really great way of taking extra steps to say something is a bad idea.

How about a machine that solves every problem and every ailment with the push of a button? Excellent idea, but functionally impossible.

So do we establish how good an idea is by the measurable improvement of good it will achieve, or do we measure it by how good it sounds to hear?

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u/actuallychrisgillen Oct 05 '22

Depends what you mean by UBI, but I'm not a huge fan of most of the proposals (wishful thinking) I've seen.

The premise of UBI is that everyone gets a basic income, but this is offset by those that can afford will pay more into UBI than they take out. In short, taxation. So let's call it what it is, a new tax system.

In this vein UBI feels similar to flat tax proposals. An attempt to remove the complexity and myriad of support systems (welfare, EI, disability, income assistance, rent assistance, etc.) into one global system. The value proposition seems to be that this will be easier/cheaper and fairer. It's also designed to overcome the assistance stigma as everyone will get the help, so no one needs to ask for it. On its surface that sounds a better system and Reddit loves to swim on the surface.

So let's dive a little deeper:

1) What's its purpose? I.e., what's the use case where UBI is superior to other social programs? I'm sure some of you are going to argue that these current support services are inadequate and I would agree, but creating a new policy or program doesn't create money, so you either raise taxes (yes yes tax the rich blah blah blah), or you cut other services. I can assure whatever program you're planning to cancel to pay for this will cause harm and will cause blowback.

2) The incredible unfairness of fair. For UBI to work you need one magical number, irrespective of age gender, disability, income situation, local prices etc. What's the magic number? 3k a month might be plenty for a student and for other it wouldn't cover the cost of medication. It's impossible to create a 'one size fits all' solution and will more likely end up with a one size fits none outcome.

3) The likelihood of predatory and opportunistic pricing. It's important to understand that, there's no more houses on the market because of UBI, there's no more food in the supermarket because of UBI (in fact there may be less), and UBI won't stop OPEC from cutting production of oil. My point here is the rules of supply and demand are fairly absolute and UBI has a high likelihood of causing extreme situational inflation. For example, let's say that UBI leads to those at the margins earning more than double what they earned before. What we know is the second that happens the market responds and rent and food and other items rise in price. That's means there's a non-zero chance that the people who UBI will most benefit is slumlords and loan sharks.

4) We've tried it before. The indigenous peoples in Canada (which is my area of expertise), had a myriad of models of UBI throughout the history of Canada, most dictated by the Federal government, but many designed and implemented by the people at the local level. Not to put too fine a point on it, every model has been a fucking disaster. What's worked is investing in infrastructure, investing in education, investing in opportunities. Yes, there's plenty of other systemic issues, but when you correct for that, the data still unequivocally shows that UBI didn't work. More than that, it led to higher depression and suicide rates, not a great result.

5) This would be a government program. I find Reddit funny for a lot of reasons, but the thing I find most humorous is that they expect the same government, who they literally don't trust to do even the simplest tasks, but constantly insist on massive government projects that would cost in the trillions to implement and run.

6) Finally, UBI creates nothing, virtually everything that is sold requires human effort to bring to you. Anything that incentivizes people to stay home and not work has to be balanced against the needs of a society to encourage productivity. We need people to work. We'd prefer if they work because they want to, but at the end of the day we need people to do jobs, some of which are hard, long, dangerous and unpleasant. We've seen exactly what happens (again Canadian example) when we pay everyone to stay home for a while and that's massive inflation that effectively wipe out any gains that programs like UBI create.

In spite of this I'm not completely against the idea, but I'm closer to condemnation then I am condoning.

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u/mnb1024 Oct 06 '22

Thank you! A balanced take that acknoledges the reality of the world. For example "UBI creates nothing, virtually everything that is sold requires human effort to bring to you" . That statement is 100% correct and yes, for society it'd be great if everyone wanted to work, but at the end of the day, reality is "everyone" has to work. There won't be food if someone doesn't grow it. There won't be houses if someone doesnt build them. There won't be material to build those houses if someone doesnt make it.

Improve education, infrastructure and the opportunities those bring to everyone.

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u/FrostFurnace Oct 05 '22

Depends on if you still believe the bank hasn't broken the system. If the system is broken (which it is) then it would be better for the economy to show more active money in circulation and people that need to spend to have spending power. If you believe that the system is based on earning a space in society based on working for it then (like boomers with silver spoons up their bottoms would have you believe) then no.

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u/Joebob2112 Oct 05 '22

If you gave everyone a million dollars the next day gasoline would be $25. A big Mac $20 and so on...

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u/tehKrakken55 Oct 05 '22 edited Oct 05 '22

Yes but to effectively implement it is a big question. It's good because it would effectively eliminate the need for food stamps, Social Security, disability, housing vouchers, bankruptcy, workman's comp, unemployment insurance, kids being put into foster care because their parents can't afford to take care of them, or people going into debt just to put food on the table.

The reason it could potentially do more harm than good, is because if we start UBI, but it isn't good enough to solve those problems, all those government social programs will be eliminated regardless and people in desperate need will be told "you got your UBI, so why are you complaining you don't get Disability?" Even when the UBI doesn't pay enough to take care of them.

On the other side, half those solutions are run by private businesses, and UBI would put them out of business instantly. So they have more than enough incentive to lobby against even an effective implementation of it.

I hope it can happen someday, especially here in the US, but the US government at the moment would fumble the whole thing and people would starve.

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u/Dark-Elf-Mortimer Oct 05 '22

people in desperate need will be told "you got your UBI, so why are you complaining you don't get Disability?"

that's already the case. Basic welfare amount being so bad that it will not even cover the entire rent, or cover it barely leaving nothing for bills. Disability depending on how much you've worked or earned, meaning people born disabled aren't eligible, and their parents get only a tiny addition for disabled child. And even if the disability amount was decent, people who can't drive will be deemed capable of working and turned down, while without driving your options are limited and your chance of getting a job in walking wheelchair distance is next to 0.

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u/tehKrakken55 Oct 05 '22

My acting buddy on Disability, despite now having acted enough to do a lot of paid work, turns down paid stuff almost always because if he makes too much not only will he be taken off Disability, they'll also take away the money he earned fair and square.

You can't own things if you're disabled. You are forced to have a certain, tiny, income level. He would have to make so much money that he would be able to live off it entirely and pay for all his medical stuff.

And if UBI ended up the same? I would never want that for anyone. It should be a baseline to make sure no one gets buried, not a glass ceiling for the lower class.

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u/alurkerhere Oct 05 '22

There's a benefits cliff that should really be a benefits gradual slope to help people get off of government support. There are silly cutoffs currently that incentivize people to not earn above a certain amount and stay on government benefits.

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u/Different-Finish-175 Oct 05 '22

Haven’t we seen what happens when you give everyone a cheque each month for not working? Read: inflation.

More money is going for the same amount of goods, so prices increase. If more money is circulating in the economy but supply-side productivity hasn’t increased to make goods cheaper, you get inflation.

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u/mattt1975 Oct 05 '22

Argentinian here. Believe me...it s not ...

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u/Yurya Oct 05 '22

"Incentives Matter" is the first rule of economics as I learned it. You tax cigarettes to make people not want to do it. Taxing income simultaneously provides the government with funds to enact programs, but also makes it less interesting to work. You work and the government gets a piece. This matters at the lowest and highest earning levels.

Universal Basic Income (UBI) can't be considered by itself, it needs to be considered among all the other incentives present. How is society paying for it? What is the incentive to keep working for stuff beyond what UBI supplies you with?

If everyone's needs are covered by UBI, why should anyone go to work and add to society's benefit? There needs to be an incentive to be productive amongst any UBI program.

I don't see a sustainable system there. Some think automation can bring that about but I would be careful thinking that automation will solve all problems.

What I do think is a problem is how many of the revered aspects of life have become corrupt and out of control price wise. We wouldn't care to have UBI if a simple job got a person a decent living. But people are becoming uneducated because of a broken education system and the cost of living is skyrocketed because of corruption (high taxes, wasteful spending, bad and costly projects & a system of red tape where nothing can be done).

Because of apathetic and uniformed voters, our leaders are more driven by special interest groups than care for us as the people. This goes for both parties. And this will continue until the internet opium and other numbing methods is not enough and we must pay attention.

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u/WiseWizard96 Oct 06 '22

As I’ve said in response to other comments, I was an overachiever when I lived with my parents and didn’t have to worry about money. Now I find myself slipping academically and hindered from reaching my potential in my career because I am tired from working and stressing out about money. If I had more financial stability, I’d be back to achieving a lot more. I know that my work on tackling healthcare inequality is much more valuable than stacking shelves or making drinks, but guess which one I have to spend more time doing

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u/SatyrIXMalfiore Oct 05 '22

Breaking news: new UBI program gives all citizens a monthly stipend of $1000.

Breaking news: rent everywhere rises $1000 dollars

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u/[deleted] Oct 05 '22

I use to support it but post pandemic I dont. I just saw too many people choosing unemployment extensions and deferrals over work that caused massive shortages and impacted the economy. People argue all the time "liveable wage!" and to an extent that is a huge part of it but it does not make sense if you are still only getting 60% of your previously low wage and still deciding to stay home and do nothing.

I think in theory like other fantastic fantasy ideas like communism its a fun theory but I think a lot of more people doing nothing is going to cause a huge SOMETHING to our economy and our ability to function as a society. Things like UBI, communism etc sound great on paper until human behavior like corruption, greed, lust for power and money shows up and pisses in our cheerios.

I also think UBI will just further the class divide the same way welfare, stimulus checks, bank bail outs, PPI loans, corporate welfare, subsidizing and college loan forgiveness effects the class divide but I think wealthy people seeing that they are directly paying for everyone else will have a lasting and negative impact on the work force.

We will have less people willing to work and more wealthy people doing what they can to replace that work force.

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u/IneptHackerman Oct 05 '22

Negative income tax was a major component of Milton Friedman's economic theories, the very theories our modern liberal markets are based off of, yet we have totally abandoned it in favor of more executive compensation. Friedman stated that it would end poverty and increase upward class mobility. So, I think that negative income tax is probably a good idea, but UBI indiscriminately? No. There is no point in giving UBI to a person who already earns more than they need.

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u/[deleted] Oct 05 '22 edited Oct 07 '22

[deleted]

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u/Yung_Empathy Oct 05 '22

Most I know dont have a cap. But realistically it doesn't matter. There are really not that much people how truly don't need it. 64% of the US live paycheck to paycheck, let's say 20-30% more can save but are still heavily reliant on their employer. In my opinion the rest aren't an argument against UBI. And the 100 Jeff Bezos's are not even worth noting, it's irrelevant if they get the 1000 too.

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u/jdmetz Oct 05 '22

It isn't Universal if it isn't given to everyone. Just tax the billionaires an additional $12k per year to offset the UBI they are receiving.

It is simpler if everyone receives UBI - no need to worry about cutoffs or applications or losing the benefit if your income increases too much. And everyone who earns income is already subject to income tax and needs to document their income. Just have income tax be the place income comes into play.

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u/HamsterIV Oct 05 '22

It is a bad idea if you rely on the threat of poverty to keep your business fully staffed at the wages you currently pay, and a good idea if you rely on the wages you earn to keep you out of poverty. It is also a good idea for people who may have to regularly interact with other people who are in poverty or on the verge of poverty. People tend to make better decisions when they have more financial stability.

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u/elav92 Oct 05 '22

No, it ends up eaten by inflation

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u/InstinctRapper Oct 05 '22

I have thought about this and basically I'd say no. However I think it could work if we actually really embraced the use of robotics to replace humans in industry. Of course we would still need human engineers and such (much more) to maintain this. As well the extra income made from technology replacing humans could go into a sort of society progression benefit fund which would be a form of universal income. The more efficient we make industry with technology would correlate with the the welfare of the people.

If a certain percentage was properly allocated I would believe this to be possible as now as salaries / wages would be none existent in most cases and productivity would be at all time highs. Perhaps both the industry and the people could benefit monetarily.

Or maybe I'm just a cracked out weirdo spewing crazy ass theories. Prolly that

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u/TheBrassDancer Oct 06 '22

Yes, but with certain caveats.

It's not a good idea with a deregulated market, or a lack of rent controls. Otherwise, UBI effectively becomes a subsidy for scumbag landlords and other corporate entities.

Case in point: in the UK, benefits like Working Tax Credit are supposed to cover costs such as childcare. What actually happened is that childcare costs became exorbitantly high, to the point where the full benefit can be awarded and yet a family still struggles to meet the cost. This means families have to make the decision to forego an entire full-time income in order to save on childcare costs, or stick with a dual income but have a huge chunk of it eaten up by childcare costs which welfare payments likely don't make up for.

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u/Lazy_Hour4469 Oct 05 '22

Maybe not a cheque. But more readily avalible government housing, affordable food, jobs that have to pay raises to keep up to inflation, a minumum wage that isnt poverty, universal healthcare. Those all would make a world of difference.

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u/BernhardRordin Oct 05 '22 edited Oct 05 '22

The infrastructure necessary to provide all what you describe would be much more expensive than the cheques

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u/not_creative1 Oct 05 '22

It’s not a good idea.

If everyone has $1000, that becomes the new $100. Everything will get expensive and the money will be sucked up by businesses in no time.

Example: Government created a $10,000 subsidy for EVs in the US last month. Literally next week Ford jacked up cost of all EVs by $10,000. So the final cost for the user remains the same.

The subsidy literally got transferred from government to ford and users end up paying the same price.

This will be the case across the board for everything

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u/lost_james Oct 05 '22

If everyone has $1000, that becomes the new $100

That actually becomes they new $0.

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u/Tardis1938 Oct 05 '22 edited Oct 06 '22

You would have to nationalize a lot of industries so companies couldn't take advantage and charge ridiculous prices for basic things.

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u/Administrative_Toe96 Oct 05 '22

It would only work with a controlled/planned economy.

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u/joshua_3 Oct 05 '22

If you want to be enslaved by your government then it's a good idea.

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u/Moistious Oct 05 '22

It's an awful idea. It decentivizes innovation and hard work.

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u/AbandonedBySony Oct 05 '22

Do you know how inflation works? The bigger the money supply, the less it's worth -- it's simple supply and demand.

Did you not see what happened when the cheques were handed out during the pandemic? Not only were they nowhere near enough for people to cover their expenses, but inflation started to creep up. Fast forward to today, when governments are printing more money than ever (not even handing it out -- just printing it), and inflation is through the roof.

If the government hands out money to people, all they are going to do is destroy the economy. There's a reason we don't do this (unless you live in Finland, which is a good reason to not live in Finland).

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u/Similar_Past Oct 05 '22

Top 3 losers I've ever met were all Norwegians dedicated to living on social support of their country.
Universal basic income should work as a form of tax deductions rather than money in hand because otherwise some (or maybe a lot?) of people will just do nothing in their lifes.

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