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by datashow 2299 days ago
This issue is not a "flaw". It's a root problem. We want to know the effect of permanent UBI, not of a temporary one, and we know (strongly suspect) the effect will be different.

Maybe the simple solution is that the researchers establish a dedicated million dollar bank account for a participant and automatically withdraw $1000 for the participant every month.

3 comments

But there is no such thing as "permanent UBI", though.

UBI is a political decision which is renewed with every government.

The perspective of the participants makes sense. Whether they believe their access to UBI will continue or not, it makes sense to up-skill.

Besides, we do know how people behave when they are born with a million dollar bank account, and it's relatively very rare that they are criticised for how they choose to live.

"UBI is a political decision which is renewed with every government"

If this is true than implementing UBI will be more problematic than I thought. All UBI proposals so far call for all other financial safety nets to be removed in order to finance UBI. Managing that will be a nightmare if you can just cut off UBI, then you have to spin up everything else again. I imagine UBI to be something similar to how the pension system is, once in place it stays there forever-ish (meaning that it can potentially collapse).

"we do know how people behave when they are born with a million dollar bank account, and it's relatively very rare that they are criticised for how they choose to live" - that's an excellent point.

Hmm, Yangs proposal did not eliminate all other safety nets. His program simply made people opt out of one or the other, and encouraged people to stick with whatever paid them more.

The knock on effect is that it'd likely reduce funding for other safety nets because they have an inherent safety net in UBI. But the existing welfare programs are either highly prohibitive or extremely difficult to qualify for and maintain even if you should be using them. UBI eliminates that barrier of entry if you only need 1k a month (using Yangs plan here).

So, yeah, less people would likely use food stamps because they can get more from 1k a month than from 1.2k in food stamps. Most people do not qualify for that much in food stamps as it is. With fewer people using that program, the government would funnel less money to that program, reducing net costs and allowing more money to go elsewhere. Eventually this would likely lead to the end of that program.

This could allow us to create new social programs that are more focused. With fewer people requiring other social safety nets, the new ones that are created would require less funding and can address root cause issues vs symptoms which are what we address today.

Most people just need money. A minority of people using a social welfare programs need something significantly more than just money. We should not leave those people on the street, but Yang never planned on that happening. He proposed a VAT tax to cover the costs. Whether that would actually work or not is debatable, but that was his plan.

Apparently, Ontario used to have a much large welfare program prior to 1995: https://policyoptions.irpp.org/magazines/august-2018/ontario...

So I guess that suggests that even if a UBI is implemented that it could be cut or repealed in a future government.

Welfare isn't UBI. Give everyone the same amount and you'll have a hard time convincing the people earning 70k to vote against another 12k... That's the secret formulae.
People earning 70k will vote against "another" 12k if it reduces their taxes by 16k. That money isn't free—a minority will see a net benefit, with everyone else footing the bill. If you're earning 70k then you're unlikely to end up on the "net benefit" side of the equation.
This is why the "Universal" aspect of it is so important. It's ridiculously easy for people to vote for defunding services that "other" people benefit from, and politicians can always whip up support by scapegoating some minority group as the root of all of our problems. But if the benefit is shared by everyone then it becomes near political suicide to suggest cuts to it. How many politicians successfully can campaign to get rid of social security or medicaid? Those are programs shared with a significant percent, but not even a majority, and as such it's really hard to successfully push for cuts to such systems. With a total universal application of basic income it would be political suicide to push for cuts, everyone's life would be planned and organized already around such a program. Look at how hard it is for universal healthcare systems to be cut in nations that have such a benefit.
> But if the benefit is shared by everyone then it becomes near political suicide to suggest cuts to it.

The benefit isn't shared by everyone, though. The payouts may be equal but the taxes to support those payouts are not. If a majority of voters are paying more in taxes than they receive in payouts (as is likely) then it shouldn't be hard to sell them on the idea that reducing or dismantling the program would be in their own self-interest.

On the other hand, if it would be difficult to dismantle the program even knowing that it benefits a vocal minority at the expense of the majority, that should make us think twice about instituting it in the first place.

In this study, you were ineligible if you made more than $35k/year (~$26k USD). Is that still considered universal?
The study is meant to look at the effects of UBI, not provide a universal basic income to everyone. The study wouldn't be super useful if you included a billionaire, because nothing about their lives would change. They have limited money to do the study, so they have to draw a line somewhere.
I'm not sure how we went from $35k to billionaire, but I agree with your point. I am definitely curious though how it affects people earning 50k, 70k, 100k though. I suspect a chunky increase in index funds, retirement plans, and investing at some threshold, which affects the market at large. Social programs, children's sports (hockey equipment and ice rentals aren't cheap!), real estate, the list goes on. Obviously untestable, but interesting. Could be extremely transformational, or maybe cost of living simply jumps.
How do you manage to get elected if you're going to take $12k / year away from everyone? Good luck with that.
That would more accurately gauge the effect on how much it disincentivizes, and how it changes the lifestyle of the recipient.

It does very little to test economics. Perhaps UBI leads to a lot of people deciding to tend bar at the local tennis club, volunteering for the job. Maybe introducing UBI across a large area has marked effects on gym memberships.

Those seem easier to test if you put a large area on UBI for a short-ish term (though I admit I haven't seen any UBI research that analyses such social effects - perhaps somebody knows of some?)

Good point. UBI may change the way of life dramatically.
Still completely irrelevant as the U in UBI comes with a lot of externalities