| I'm a UBI supporter, and every one of these points has serious problems. > 1. Current spending. We currently spend between $500 and $600 billion a year on welfare programs, food stamps, disability and the like. This reduces the cost of Universal Basic Income because people already receiving benefits would have a choice but would be ineligible to receive the full $1,000 in addition to current benefits. Making UBI a choice vs. existing programs is administratively problematic (and, also, makes no sense.) But a lot of current welfare spending is state and local, and some of what he mentions (disability insurance) is not only state/local, but not classic welfare spending, it's insurance against loss of income, which UBI, despite raising the income floor, does not provide or meaningfully substitute for. > A VAT. Our economy is now incredibly vast at $19 trillion, up $4 trillion in the last 10 years alone. A VAT at half the European level would generate $800 billion in new revenue. What's the “European Level” referenced here? European VAT levels range between something like 8% and 27%. > A VAT will become more and more important as technology improves because you cannot collect income tax from robots or software. Yes, you can collect tax on income gained through capital investments like robots and software. We do that today, just at lower rates than labor income, but there's nothing fundamental that requires such lower rates. > New revenue. Putting money into the hands of American consumers would grow the economy. The Roosevelt Institute projected that the economy would grow by approximately $2.5 trillion and create 4.6 million new jobs. This would generate approximately $500 – 600 billion in new revenue from economic growth and activity. At best, the growth and new revenue lags; it helps with the steady state cost, but you still have to deal with getting there. > We currently spend over one trillion dollars on health care, incarceration, homelessness services and the like. That's true (talking government spending) even if you cut out everything after health care, but... > We would save $100 – 200 billion as people would take better care of themselves and avoid the emergency room, jail, and the street and would generally be more functional. That's... extremely optimistic for a $1K UBI. Especially since much of the government cost of healthcare, which is the bulk of this category, is in means-tested programs, particularly Medicaid, which presumably was already fully counted when you counted the full cost of existing “welfare” programs. |
- Over half of means-tested welfare (including Medicaid) goes to people under the age of 18, so these costs won't be touched. "In an average month during 2012, 39.2% of children received some type of means-tested benefit, compared with 16.6% of people aged 18 to 64 and 12.6% of people 65 years and older." The median monthly benefit for these groups was $447, $393, and $303 respectively. The only means tested program that isn't dominated by minors is SSI, the vast majority of which goes to the elderly and people 18 to 64 with disabilities who would not re-enter the workforce. [2, p16, 24]
[1] http://rooseveltinstitute.org/modeling-macroeconomic-effects... [2] https://www.census.gov/content/dam/Census/library/publicatio...