[AnimalMuppet]

Real growth? Or just inflation?

Then there's the little matter that the money comes from somewhere. Moving $3T from one pocket to another may not result in any growth at all. (Ironically, if Yang were irresponsible, and weren't going to pay for this program, then this objection would not apply.)

[beat]

All economic growth comes from money moving somewhere.

It just seems absurd to me to think "may not result in any growth at all". Money in the hands of the poor and middle class moves faster than money in the hands of the rich, and thus creates more actual business. This is a well-understood economic fact.

[AnimalMuppet]

Too late to edit my previous reply, so I'm adding this parallel one.

> All economic growth comes from money moving somewhere.

No. No it doesn't. All real economic growth comes from more things that people want being produced. It results in money moving somewhere, but the money moving isn't the real growth, nor is it the cause. It's the result.

To adapt an explanation from Thomas Sowell, take beach houses. There's more demand for beach houses than there is supply, so they tend to be very expensive. I can't afford one - I can only rent. But if we gave everybody a bunch of money, there still wouldn't be any more beach houses. All that would happen is that beach houses would rise in price, because now there would be more money chasing the same beach houses.

This misunderstanding - thinking about money instead of about producing things - leads to the idea that you can cause growth by moving money around. Sometimes you can - when the demand is actually there, and the economy has the capacity to produce more. Well, in this situation (UBI), the demand is definitely there. The poor genuinely need stuff, lots of it. But even so, adding more money won't cause the economy to produce more unless it has the spare capacity. All it might do is redistribute the things that are already being produced. (And that may be fine. If we want to say that the poor shouldn't starve just because they're poor, and that the rich are going to have to make do with less so that the poor don't starve, there's a case to be made for that. But that's not the same as growth.)

So the question might be, how much spare capacity do you think there is in the economy, and why do you think that?

[beat]

Without money to move, there is no economic growth. There are supply-side problems, and demand-side problems.

Sowell's example is woefully incomplete. He's talking only of limited, unique physical goods. He's not talking about things where production can increase in response to demand. He's not talking about services. And bluntly, UBI isn't there to help people buy beach houses, and won't cause enough inflationary pressure on beach houses to make a damn bit of difference on their price. It's there to help people afford a car, or child care, or medical bills, or any of the countless things that plague the poor rabble in this country.

Spare productive capacity is why UBI is feasible in the first place. The economy is producing more than people can afford to buy, and the machinery that makes it so productive is displacing jobs they need to afford anything at all.

If you're reading Sowell, you should read Yang's book. He addresses this stuff. He's not just treating UBI as a golden hammer. It's a straightforward, workable way to cope with a lot of problems that keep us from coping with other problems.

If technological advances wipe out 10% or more of existing jobs in the next couple of decades with no replacements in sight, what do we do? Blame them for being lazy? Retrain those truck drivers as computer programmers so they can get those hot programming jobs in their population 800 midwestern town? And move those local startups into the strip mall that closed because retail got wiped out by Amazon? If we don't do something about it, there will be blood in the streets, sooner or later. That's a much bigger problem than taxes.

[AnimalMuppet]

> Without money to move, there is no economic growth.

Of course there is. You can have an economy without money. It's barter, but it's still an economy, and it can still have growth.

And, of course UBI isn't for buying beach houses. That was to illustrate the problem in an obvious way, not to be directly relevant.

> The economy is producing more than people can afford to buy

You have also claimed that UBI will grow the economy. If it's already producing more than people can afford to buy, first, why would it grow the economy, and second, why should we regard that as a good thing?

Since you seem to be misreading my position fairly consistently, let me try to be more clear. My claim is not that UBI is necessarily a bad thing. My claim is not that UBI is unneeded. My claim is not that the poor are doing fine. My claim is that your claim that UBI will grow the economy is highly suspect.

[beat]

Barter is even more of an absurdist corner case than Sowell's beach houses. It doesn't contribute to the question of whether UBI will grow the economy.

Ok, let's take this from another angle. Does bankruptcy at a large scale help the economy? Foreclosure? Homelessness? It seems reasonable to me that people are more likely to contribute to the economy if they aren't bankrupt and homeless. It seems likely that their children are more likely to become successful contributors.

And it's obvious that UBI can reduce these problems substantially. After all, homelessness isn't caused by a shortage of homes. It's caused by financial distribution problems. So right there, we have an opportunity for growth.

Now, I'm not arguing that UBI will totally pay for itself here either. But it seems likely to produce some economic growth, just because it does the most for the people currently least able to participate in the economy, and that's a majority of the population.

[AnimalMuppet]

But it wasn't going to be taken out of the hands of the rich to pay for this. It was going to come from a VAT, and from existing welfare. But existing welfare is taking it from the poor, and the VAT is taking it from businesses and people who buy stuff. It's largely not coming from the rich. So even by your second paragraph, it's unclear that this is going to cause actual growth.

[beat]

Think about the math. Is a VAT actually going to take a third of the income of the average wage earner? No, no it will not.

[AnimalMuppet]

Where did "a third" come from? Why that number? Why do you think that number is relevant?

And why do you think it answers anything I have said?

[beat]

I'm round-numbering. Median individual income in the US is a bit over $30k, adding $12k to that is roughly a third.

And your claim, which is nonsense, is that the VAT will eat 100% of that $12k.

[AnimalMuppet]

That is not at all my claim. My claim is that doing this may not grow the economy as a whole. Someone making median income or (especially) less may well benefit; I do not claim that they won't.