Guaranteed/Basic Income

[JJ Husker]

JJ, there was a thread a bit ago, probably not too far down the page, about sander's relatively low effective tax rate.

Can you take a look at it? I'd be interested in your thoughts re the inequities around placing the tax burden on high income, low wealth people versus those who have the same income but more wealth.

To sum up, I paid 3x as much federal taxes compared to Sanders even though I made on 1/3 more in income. Sounds like you might be in a similar situation.

I read through that topic...again. I had previously given up on it because it contained way too many (read as more than one) posts by cornholiographical. I typically feel myself getting stupider when I read his posts so I usually avoid any topic ghat he has a lot of posts in.

 

But in summary, I have absolutely no respect for any of the top 5 presidential hopefuls. Can't stand Hillary, Cruz or Kasich and Trump and Sanders are both downright dangerous. As far as Bernie's tax plan and desired expansion of our already too socialistic system, I can't imagine a worse choice for president and that statement is made fully realizing how absurd Trump is.

[cm husker]

I didn't mean his plan. I meant him as a case study in how messed up the current system is that sanders would pay so little in taxes.

[JJ Husker]

I didn't mean his plan. I meant him as a case study in how messed up the current system is that sanders would pay so little in taxes.

I don't blame anyone for using every deduction and loophole to their advantage and trying to pay as little as possible in taxes. But yeah, it does highlight how messed up our current system is. I don't think that particular point makes him a hypocrite, it just shows how screwed up the tax code is. I will say that someone of his income, wealth and position should probably be giving more to charity than it looks like he did/does but I'm not going to crucify him for it. There is plenty to dislike about his socialist policies without creating things of which we don't know the whole story.

[HuskerShark]

 

 

 

 

 

I'm all for a reform of our system, but not this one. Giving people without them earning it "so they can do the things they really want to do" not only would create a lot of problems, it would give no incentive for achievement. Doing the things you want to do is already attainable, just not with a job (just over broke).

As opposed to the current system which does a pretty good job of demotivating people from achievement?

I actually really agree with you on that. But if you're talking lesser of two evils, I'll take our current system over shelling out a bunch of money to everyone who didn't earn it.

What if it actually saves you money by doing this over the current system?

It's not the budget I'm worried about. We're talking about total collapse of our economy potentially.

 

 

 

There's no evidence that such a basic income, which would replace other forms of welfare (and social security), would collapse our economy. I highly recommend reading the article.

 

 

There's also no evidence that it wouldn't, so what's your point.

[BigRedBuster]

I believe I am the one who threw out the figure of $30,000 per year first in this statement and I'm not a socialist.

 

So, let's take someone who is living in poverty, if that person is getting $30,000 in benefits from all the various welfare programs, would it make more sense to just give that person (and everyone else) $30,000? You would wipe out huge departments in the government that administer these projects. Theoretically, you get the same level of assistance to people while greatly shrinking the federal and state governments and their budgets.

 

In other words, I would come about the figure by looking at what level of help someone in this situation is already getting from the government to sustain themselves. Maybe that figure is $20,000. I have no idea, I just threw out the $30,000 figure for discussion purposes.

We are already spending that money. It's not a new expenditure that all of a sudden goes on the budget. Then, we can eliminate the huge infrastructure of systems in our government put in place to supply the poor these services. I believe that would be a huge savings.

 

Now, I don't know the exact numbers behind this and that's why I have said I would be interested in seeing how it all would work.

 

I am all for reducing government and making it more efficient. That isn't being a socialist....that's just being smart about governing.

 

This entire issue is caught up in a paradigm that people just can't get around.

[cm husker]

Sorry, thought someone else bring up $30k first in relation to a Swiss program.

 

I agree with your thought process.

[cm husker]

 

 

 

 

 

 

 

 

I'm all for a reform of our system, but not this one. Giving people without them earning it "so they can do the things they really want to do" not only would create a lot of problems, it would give no incentive for achievement. Doing the things you want to do is already attainable, just not with a job (just over broke).

As opposed to the current system which does a pretty good job of demotivating people from achievement?

I actually really agree with you on that. But if you're talking lesser of two evils, I'll take our current system over shelling out a bunch of money to everyone who didn't earn it.

What if it actually saves you money by doing this over the current system?

It's not the budget I'm worried about. We're talking about total collapse of our economy potentially.

 

There's no evidence that such a basic income, which would replace other forms of welfare (and social security), would collapse our economy. I highly recommend reading the article.

There's also no evidence that it wouldn't, so what's your point.

Actually, there's evidence based on limited implemtation similar programs that it actually leads to more productivity overall, even if a small % of individuals are less productive.

 

But, my bigger issue is that we know the system isn't working today. Why keep it the same?

[cm husker]

 

I didn't mean his plan. I meant him as a case study in how messed up the current system is that sanders would pay so little in taxes.

I don't blame anyone for using every deduction and loophole to their advantage and trying to pay as little as possible in taxes. But yeah, it does highlight how messed up our current system is. I don't think that particular point makes him a hypocrite, it just shows how screwed up the tax code is. I will say that someone of his income, wealth and position should probably be giving more to charity than it looks like he did/does but I'm not going to crucify him for it. There is plenty to dislike about his socialist policies without creating things of which we don't know the whole story.

I don't blame him either. It just illustrates how these tax breaks, like almost all government programs, are often a transfer of wealth from the poor to the wealthy (in terms of net worth).

 

That's the really insidious thing about the situation.

[HuskerShark]

 

 

 

 

 

 

 

I'm all for a reform of our system, but not this one. Giving people without them earning it "so they can do the things they really want to do" not only would create a lot of problems, it would give no incentive for achievement. Doing the things you want to do is already attainable, just not with a job (just over broke).

As opposed to the current system which does a pretty good job of demotivating people from achievement?

I actually really agree with you on that. But if you're talking lesser of two evils, I'll take our current system over shelling out a bunch of money to everyone who didn't earn it.

What if it actually saves you money by doing this over the current system?

It's not the budget I'm worried about. We're talking about total collapse of our economy potentially.

 

There's no evidence that such a basic income, which would replace other forms of welfare (and social security), would collapse our economy. I highly recommend reading the article.

There's also no evidence that it wouldn't, so what's your point.

Actually, there's evidence based on limited implemtation similar programs that it actually leads to more productivity overall, even if a small % of individuals are less productive.

 

But, my bigger issue is that we know the system isn't working today. Why keep it the same?

 

 

I agree with you, but shelling out $30k to everyone isn't the answer IMO

[JJ Husker]

I believe I am the one who threw out the figure of $30,000 per year first in this statement and I'm not a socialist.

 

 

So, let's take someone who is living in poverty, if that person is getting $30,000 in benefits from all the various welfare programs, would it make more sense to just give that person (and everyone else) $30,000? You would wipe out huge departments in the government that administer these projects. Theoretically, you get the same level of assistance to people while greatly shrinking the federal and state governments and their budgets.

 

In other words, I would come about the figure by looking at what level of help someone in this situation is already getting from the government to sustain themselves. Maybe that figure is $20,000. I have no idea, I just threw out the $30,000 figure for discussion purposes.

We are already spending that money. It's not a new expenditure that all of a sudden goes on the budget. Then, we can eliminate the huge infrastructure of systems in our government put in place to supply the poor these services. I believe that would be a huge savings.

 

Now, I don't know the exact numbers behind this and that's why I have said I would be interested in seeing how it all would work.

 

I am all for reducing government and making it more efficient. That isn't being a socialist....that's just being smart about governing.

 

This entire issue is caught up in a paradigm that people just can't get around.

I wouldn't have a problem revamping our current system to make it more efficient. Reducing administrative costs by going to a form of lump sum payment could make sense if it was done right and targeted to only deserving people. Heck it would still be better even if the current undeserving people continued to live on the dole. BUT....that is not the program as explained in the linked article. Correct me if I'm wrong but weren't they proposing to give everyone, not just current aid recipients, the minimum income payment. I'm sorry but that would accomplish absolutely nothing good. It may seem more acceptable or tolerable to people who aren't on the dole and who have no understanding of economic principles but surely that is no reason for any sane person to seriously entertain this fantasy.

[cm husker]

Yes, everyone would receive the basic income. For those of us with a tax bill, it would act as a credit (not unlike the EITC that Reagan intelligently got passed).

 

Again, you need to understand that it's not fantasy or insanity. And if it is, then you think guys like Milton Friedman were engaging insanity.

 

The problem with only paying benefits to those "on the dole" is that it would seriously create an incentive to act in an economically efficient way by going to or staying on said dole.

 

It needs to be a basic income available to all adults who are not in jail. That's the only way it would work. Otherwise, we are left with the inefficiencies present today.

[JJ Husker]

Yes, everyone would receive the basic income. For those of us with a tax bill, it would act as a credit (not unlike the EITC that Reagan intelligently got passed).

 

Again, you need to understand that it's not fantasy or insanity. And if it is, then you think guys like Milton Friedman were engaging insanity.

 

The problem with only paying benefits to those "on the dole" is that it would seriously create an incentive to act in an economically efficient way by going to or staying on said dole.

 

It needs to be a basic income available to all adults who are not in jail. That's the only way it would work. Otherwise, we are left with the inefficiencies present today.

But if it is paid to everyone, in effect giving people who aren't already on the dole additional income and the only visible benefit being making our welfare system more efficient and, due to that administrative efficiency, eliminating many current government jobs, what do you think the effects of that would be?

 

I think it causes;

1- Inflation due to more disposable income being in circulation.

2- Raises the poverty level so the needy people will still be a day late and dollar short on their buying power.

3- Many extremely rich people won't put their fair share back in to circulation so the rich just become richer.

4- Many of a whole bunch of former government employees, who used to be part of the inefficient system, will now be transferred to the government dole, in effect off setting much of any benefit.

 

I'm not going to blindly follow the recommendation of a guy like Milton Friedman, no matter his name or supposed credentials, when it is so glaringly obvious that these things will happen as a consequence. I'm all for revamping or fixing our current system but I fail to see where this accomplishes anything meaningful and I can see all kinds of pitfalls that would likely make things worse than they are now. Fixing something by making it worse than it was is no solution.

 

And to answer your question from a prior post, I learned about economics in high school and at DONU and mostly through my life which includes being a consumer and business owner. Milton Friedman doesn't mean sh#t to me. And wouldn't he be considered one of the guys who has helped shape our current system?

 

Why did you assume it was not at a university? Just because I disagree with you or because I am not a fan of socialist policies or because I'm not all over Friedman's jock strap or...why?

[cm husker]

No. It replaces the current welfare system, so it's not additive income.

 

1. We talked about the inflation risks. There are links above that describe why that's not a legitimate concern, provided that the government does not borrow the money to finance the program. This is a redistribution of productivity gains through a sharing. It's not socialism, but it's definitely redistribution. That (unlike socialism) actually is quite prevalent in the country (both up and down the income scale, as I demonstrated that a tax break for home ownership interest is a redistribution from poor people in favor of rich people). We are all going to have to accept that's not going away. The question then is, how do we accomplish it most efficiently.

 

2. This is really just a different way of making the same faulty inflation argument. Because we are redistributing the pot of productivity, it's not going to necessarily drive up the costs of goods, especially if when the actual amounts of the basic income are so low (and, as already stated, this is just replacing welfare programs that have already caused inflation, to the extent that they can).

 

3. Not following you here. What do you mean?

 

4. Not likely, because, despite the trope, most government workers would be able to redeploy to other sectors of society (e.g., a social worker could still do work, probably better work, as an employee in a charity or private enterprise that helps people add to their basic income). Because, at the end of the day, that's what this is all about: wringing out as much productivity from as many people as we possibly can in the most efficient manner.

 

You say that the results are obvious, but the actual evidence suggests that you're entirely wrong. Many intelligent people of all political persuasions disagree with you.

 

Is it at all possible that you are wrong?

 

Personal business accounting is not the same as being versed in economic policy matters.

 

You keep using the term "socialist policies."

 

That's not a socialist policy, and you need to comprehend that or we can't really make progress in the discussion. As far as my question about university, I asked because your conception of "supply and demand" is not reflective of common economic terminology. Words need to mean something; otherwise, we might as well be speaking different languages.

[cm husker]

This is a thorough explanation of why a basic income would not result in inflation:

 

https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7#.98pd8tirf

 

I don't agree with every aspect of his proposal, but his explanation of why this does not cause inflation is valuable.

 

In pertinent part, the issues around "supply and demand" and cash payments replacing existing welfare expenditures:

 

 

To further inform inflationary fears on a more academic basis, it’s also important to understand the basic variability of supply and demand and how it applies to various goods and services.

Where demand already exists and supply is already paid for, demand is unlikely to change as basic income simply replaces one method of payment with another. E.g., replacing food stamps with basic income is unlikely to make people buy more milk. It just means people will likely buy the same amount of milk with cash instead of SNAP.

Where demand is actually increased, depending on the good or service, supply can also easily be increased, be increased with some investment in capacity, or not be increased. It is this third case where prices can rise, and points more to increases in prices for luxuries, and not basic goods and services.

[84HuskerLaw]

This discussion is downright depressing. I urge all of us, to once again, study up on the basics of economics 101 (Macro Economics course). Some of you clearly do not understand supply and demand. It is actually simpler than I think some of you are thinking: as the supply of a given thing increases, its market value/price decreases and conversely, as the supply decreases, the market value/price will increase. The fundamental economic principle is applicable to most any thing such as bbls of crude oil, bushels of corn, McDonald's hamburgers, Nike tennis shoes, gallons of house paint, able bodied workers who need money and are therefore looking for employment, and of course, the most elemental economic commodity (MONEY) - being the very medium of exchange used in modern economies in lieu of direct exchanges of physical good and services).

 

Therefore, it is not complicated really - if you dramatically increase the supply of money (exactly what you are doing if you one day give $30,000 or $20,000 or just $5,000), you absolutely WILL cause immense inflationary pressures. Even put more simply, flood the economy with money by giving everbody a bunch of cash and they will certainly go out and spend a fairly large portion of it to make purchases of goods and services. Inflation (see economics text books everywhere) is by definition TOO MUCH MONEY CHASING TOO FEW GOODS! This is just not even debatable. As you decrease the amount of money involved, you would of course decrease the inflationary pressures so that if you gave out a $1,000, one would find inflationary uptick in the .25% or something small. But giving everyone 20,000 a year in perpetuity, much like the consequences of massive new healthcare spending under Obamacare, you will see dramatic price inflation across the economy. The poor will remain poor as their purchasing power will simply be reduced by dramatic rises in prices of everything they want to buy.