Universal Income.

smartcooky said:
A thought experiment...

If some rich benefactor, say a mysterious person with truly unlimited resources, were to decide to be the provider of UBI for every citizen of a country. Everyone suddenly has an additional $500 each month to do with what they wish, spend, invest, save or some combination of the three. The only proviso is that the extra $500 is not taxable in any way (so the government does not get a tax take from the UBI). How would that impact the economy of that country?

(Remember this is a thought experiment so you can't question how its possible that any of its premises are possible. It is what it is, and we simply make it happen)

Of course it would massively boost the economy? To deny this is to deny logic. Does anyone disagree?
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It would probably boost consumer spending in the poorest communities quite a bit. Poor people have immediate needs that often aren't being met, so it's not like the $500 is going to get disappeared into investments. It probably will mean more spending at very local businesses, be that on housing, groceries, transportation, retail, medical, and so on. Quality of life will probably improve assuming that the UBI is proportional to the cost of living in a given location.

I imagine that such a scheme would be disastrous for predatory finance businesses such as paycheck and title loan companies that charge exorbitant interest rates. Sure, there will always be fools willing to spend on credit for nonessentials, but a lot this business has to do with poor people in cash crunches needing quick money, at any cost, to keep one step ahead of eviction or some other dire need.

For people of slightly less poverty, I imagine a lot of that money might just get plowed into paying down debt, such as student loan debt or mortgages. Probably not have as an immediate effect, but more rapid paydown of debt would have longer term effects that would impact the economy in a beneficial way.

For wealthy people, the money will likely have no impact. The diminishing value of money means that they will barely even notice the infusion. It'll probably just get dumped into their other investments.
 
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SuburbanTurkey said:
For wealthy people, the money will likely have no impact. The diminishing value of money means that they will barely even notice the infusion. It'll probably just get dumped into their other investments.
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I disagree on this point, I think that if the amount is as small as $500 a month the wealthy would consider it too small to bother with investing and would just spend it casually. I don't see most millionaires exerting effort to invest another $500 a month. "Ah, a windfall! Yes, let's increase my regular investing from $40,000 a month to $40,500 a month! At last, I'm making it!!!" I think if you give the wealthy an extra $500 that's it more like to wind up as extra tips for golf caddies and such.
 
TragicMonkey said:
I disagree on this point, I think that if the amount is as small as $500 a month the wealthy would consider it too small to bother with investing and would just spend it casually. I don't see most millionaires exerting effort to invest another $500 a month. "Ah, a windfall! Yes, let's increase my regular investing from $40,000 a month to $40,500 a month! At last, I'm making it!!!" I think if you give the wealthy an extra $500 that's it more like to wind up as extra tips for golf caddies and such.
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The wealthy are already consuming as much as they want. Adding more money to the pile won't change their spending habits one bit.
 
cullennz said:
Not that long if you are expecting your average worker to pay even more for others to sit on their arse all day.
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That's the rub. It doesn't matter how many people are stuck in poverty traps or are cheated out of what they are legitimately entitled to as long as we stop that one slacker getting something for free.
 
SuburbanTurkey said:
The wealthy are already consuming as much as they want. Adding more money to the pile won't change their spending habits one bit.
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Agreed. They wouldn't even know about it specifically. Income goes to accountants and financial investors etc whom likely just auto-deposit the check each month to the same places their other incomes are tax sheltered/invested.
 
I do like the subtle move of the goal posts from:

1) the numbers don’t work and it would lead to massive deficits

To

2) no politician would risk his career to do something good
 
SuburbanTurkey said:
The wealthy are already consuming as much as they want. Adding more money to the pile won't change their spending habits one bit.
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TragicMonkey said:
I disagree on this point, I think that if the amount is as small as $500 a month the wealthy would consider it too small to bother with investing and would just spend it casually. I don't see most millionaires exerting effort to invest another $500 a month. "Ah, a windfall! Yes, let's increase my regular investing from $40,000 a month to $40,500 a month! At last, I'm making it!!!" I think if you give the wealthy an extra $500 that's it more like to wind up as extra tips for golf caddies and such.
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Thermal said:
Agreed. They wouldn't even know about it specifically. Income goes to accountants and financial investors etc whom likely just auto-deposit the check each month to the same places their other incomes are tax sheltered/invested.
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Of course the people you are talking about are a very small percentage of the population, so it doesn't really matter what they do with the money... the impact on the economy from them will be minimal. The vast majority of the people are those on middle to lower incomes, the poor and those currently on benefits and pensions, they are the spenders, the car buyers, the house builders, the home improvers. The economic impact of extra money to them will be the greatest.
 
RecoveringYuppy said:
Excuse me but we're here and can hear you. In the first place I started my post with a simple "yes" taking your hypothetical at face value. In the second place, you don't control me or the thread so it is perfectly fine for us to go ahead and say what we think without your permission.
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- "Ok let's try a thought experiment."
- "YOU DON'T CONTROL ME!!!"

People are odd, sometimes.
 
lionking said:
The first paragraph proposes to cut all existing programs, including aged pensions, in exchange for $6100 per year.
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It proposes no such thing. It's saying that just by making those cuts you could fund 6100$ a year directly. That doesn't mean that it's the only thing you do, or what that's all the money you get.

Lionking, you're a smart fellow. I can ony surmise that you're just not paying attention to the discussion out of spite.
 
lionking said:
Why wouldn’t people be happy with more handouts?
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Right. Now I know why Smartcooky called you elitist. That's right out of the right-wing textbook.

cullennz said:
Not that long if you are expecting your average worker to pay even more for others to sit on their arse all day.
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Ah, there it is again.

lionking said:
It was stupid then. It is stupid now. People who advocate now are, well work it out...
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It'd be nice if you could articulate why it's stupid. Notice that I'm not a proponent myself, but your argument continues to be "nuh-huh".
 
smartcooky said:
Of course the people you are talking about are a very small percentage of the population, so it doesn't really matter what they do with the money... the impact on the economy from them will be minimal. The vast majority of the people are those on middle to lower incomes, the poor and those currently on benefits and pensions, they are the spenders, the car buyers, the house builders, the home improvers. The economic impact of extra money to them will be the greatest.
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Also, any UBI will be a net loss to the rich. Sure, they will get the checks but their taxes will increase by at least the mount of the UBI, probably more. This is why the rich don’t like a UBI: increased taxes.

This is also why the rich don’t like most safety nets, though.
 
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cullennz said:
It is quite funny that people think giving rich people free money and then claim it back in tax is cost neutral.
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It’s a lot cheaper than tracking who “deserves” a benefit and have they properly filled in form 13-246. No, the new one not the one from last week.
 
Perhaps I’ve missed it being discussed but would UBI not help reduce low end crime, like low value shop lifting of the essentials such as food and clothing? I know it wouldn’t stop the low end “white collar so it’s OK” crime like taking home that pack of paper for your printer, those people steal simply because they can.
 
Darat said:
Perhaps I’ve missed it being discussed but would UBI not help reduce low end crime, like low value shop lifting of the essentials such as food and clothing? I know it wouldn’t stop the low end “white collar so it’s OK” crime like taking home that pack of paper for your printer, those people steal simply because they can.
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I might very well, yes. It's hard to say all the various repercussions that it would have because lionking no politician would ever try it!
 
Belz... said:
Asked and answered.
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I would say that this is false.

For the record, I am very much interested in a proper discussion of Universal Basic Income (which is not happening here), and I think that it may well be necessary at some point. I think Andrew Yang's presidential bid was important for putting the idea in the spotlight, and at least he did have a proposal for paying for UBI - it would be funded by a sales tax and a reordering of the benefits system in the US.

However, we cannot say categorically that how UBI programs will be funded has been answered.

For example, if Australia brings in UBI, will it involve an increase in sales taxes, property taxes, wealth taxes, inheritance taxes, income taxes, etc..?

Will it involve cuts to child support, pensions, jobseekers's allowance (presumably that can be abolished, but I don't know)?

Will it involve budget cuts in defence, education, healthcare, etc...?

At the moment, we can easily point at figures and say, this number of people support it so it should be implemented as soon as possible. But I think that unless the specifics of the funding are answered and people are aware of the specifics, we don't know how many of those will be deal breakers for those who otherwise might support it.
 
cullennz said:
Not that long if you are expecting your average worker to pay even more for others to sit on their arse all day.

I think I am one of many who thinks helping out those in the **** temporarily is sweet as, but there is a limit to it, and a UBI means massive more taxes.
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You too haven't been paying attention. There are more ways to fund this thing than just taxes.
 
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