UBI is last resort. We need to spend the money on Essentials... like affordable housing neglected infrastructure Healthcare education a sustainable climate... those Investments would create living wage jobs.
None of those things are mutually exclusive of UBI, and all your suggestions are worthy of consideration, but UBI is the first resort for a number of reasons. One is that by allowing poverty to exist, we then incur many external costs. https://americanunion.substack.com/p/what-is-the-cost-of-not-ending-poverty
Some of those costs are financial, others are less tangible. Wealth inequality decreases our trust in society. Poverty makes people more likely to support an authoritarian strongman who promises to shake up a failing system.
Another is principled: addressing the Cantillon effect. Once we see through the Ross Perot fallacy and acknowledge that growing the money supply is normal and natural, the next question is, who should benefit? UBI is the mechanism for ensuring everyone does.
Last, ending poverty makes all those other problems easier to address. Income that isn't tied to a physical job will enable people to flee the high-cost-of-living areas, creating vacancies that will bring downward pressure on rent prices. Poverty drives as much as 35% of healthcare spending. Children learn better when they're not insecure. Ensuring disposable income empowers consumers to make more environmental purchases... not to mention it's hard for people worried about paying rent today to think about climate problems decades down the road. Living wage jobs are great, but how many millions can you create? 2/3rd of the country reports living paycheck to paycheck. A restructuring of our economy is needed, and abolishing poverty with UBI is the best foundation.
Many great points. However all the items I mentioned will reduce expenses (such as housing) for the poor and ensure that we invest in the future of the poor along with everyone else.
An offshoot of UBI is to continue the rapid increase of the minimum wage. But if there is a limit on how much money we can add to the system, then the highest priority allocation of resources should be the first expenditures - again housing, health, eduction, infrastructure, ... . That money is also more politically feasible to spend because everyone benefits. Peter Coy warned A policy shift in how Democrats address inequality has cost them, a paper argues ... “Compensate the Losers?” Economic Policy and Partisan Realignment in the US Ilyana Kuziemko, Nicolas Longuet Marx & Suresh Naidu
of “respectability”, voters might have direct preferences over their beliefs that they are
productive" Coy says, One explanation could be the dignity of work: People want to feel that they earned their own way (even if their earnings were invisibly bolstered by government policies such as tariffs)
I think we're coming at this with different objectives. Why focus on reducing expenses for the poor, or "invest in the future of the poor"? Poverty is 100% curable: it's a lack of money. As MLK wrote, “the solution to poverty is to abolish it directly by a now widely discussed matter: the guaranteed income. ... The time has come for us to civilize ourselves by the total, direct and immediate abolition of poverty.”
We definitely want the same outcome, and given we both attended the Chicago Plan series, we want the same mechanism, public money creation for the public good. That money will also ensure all idle resources are used productively. But the public good needs public goods - schools, hospitals, infrastructure, a sustainable environment, affordable housing, ... . That means we need to cut private consumption with taxes. Such investments should mean a shortage of labour, full employment and little if any poverty. Social insurance of some kind, like a basic income could protect those who fall between the cracks. But public housing would directly stop homelessness. Free tuition would directly stop any barrier to a motivated youth. Public health would prevent the bankruptcy problem that private health has created ... etc.
The Hgsss experience has made me realize that as we got double income families, housing prices rose faster. The banks raised the appraisals and leant more money. The result was families were not much better off with the extra money. The rentiers has extracted the extra income. UBI could be vulnerable to that.
Money creation can and should be divorced from the budget. This can be done by reducing payroll taxes on the fly and giving unbudgeted bonuses to welfare and pension recipients. This is important for two reasons:
1. It eliminates the very real concern that politicians will inflate the currency in order to pack the budget without raising taxes, and
2. The right amount of money to infuse into the budget must be adjusted weekly. We cannot know how much money to infuse a year in advance.
Payroll tax adjustments and bonuses are one possible solution, but it's unnecessarily complex and benefits some citizens more than others. UBI is simpler, more efficient, and gives everyone an equal hand up. It also addresses your first point: when the only way Congress can add currency is through UBI distribution, they'll still have to utilize taxes, and those taxes will be progressive in tandem with UBI.
To your second point, there's no "right amount of money." (There are wrong answers, however.) Different countries target different rates of inflation; these are policy questions. (Just like allowing poverty to exist.) I believe stability is more important than weekly micro-adjustments. Annual projections will never be perfect, but they are very functional--when I was in the legislature, we worked out two-year budgets.
Thanks for sharing this with Hgsss Monday.
UBI is last resort. We need to spend the money on Essentials... like affordable housing neglected infrastructure Healthcare education a sustainable climate... those Investments would create living wage jobs.
I appreciate what HGSSS offers; happy to share.
None of those things are mutually exclusive of UBI, and all your suggestions are worthy of consideration, but UBI is the first resort for a number of reasons. One is that by allowing poverty to exist, we then incur many external costs. https://americanunion.substack.com/p/what-is-the-cost-of-not-ending-poverty
Some of those costs are financial, others are less tangible. Wealth inequality decreases our trust in society. Poverty makes people more likely to support an authoritarian strongman who promises to shake up a failing system.
Another is principled: addressing the Cantillon effect. Once we see through the Ross Perot fallacy and acknowledge that growing the money supply is normal and natural, the next question is, who should benefit? UBI is the mechanism for ensuring everyone does.
https://americanunion.substack.com/p/the-cantillon-effect-and-ubi
Last, ending poverty makes all those other problems easier to address. Income that isn't tied to a physical job will enable people to flee the high-cost-of-living areas, creating vacancies that will bring downward pressure on rent prices. Poverty drives as much as 35% of healthcare spending. Children learn better when they're not insecure. Ensuring disposable income empowers consumers to make more environmental purchases... not to mention it's hard for people worried about paying rent today to think about climate problems decades down the road. Living wage jobs are great, but how many millions can you create? 2/3rd of the country reports living paycheck to paycheck. A restructuring of our economy is needed, and abolishing poverty with UBI is the best foundation.
Many great points. However all the items I mentioned will reduce expenses (such as housing) for the poor and ensure that we invest in the future of the poor along with everyone else.
An offshoot of UBI is to continue the rapid increase of the minimum wage. But if there is a limit on how much money we can add to the system, then the highest priority allocation of resources should be the first expenditures - again housing, health, eduction, infrastructure, ... . That money is also more politically feasible to spend because everyone benefits. Peter Coy warned A policy shift in how Democrats address inequality has cost them, a paper argues ... “Compensate the Losers?” Economic Policy and Partisan Realignment in the US Ilyana Kuziemko, Nicolas Longuet Marx & Suresh Naidu
https://www.nber.org/papers/w31794 The paper says, "As a dimension
of “respectability”, voters might have direct preferences over their beliefs that they are
productive" Coy says, One explanation could be the dignity of work: People want to feel that they earned their own way (even if their earnings were invisibly bolstered by government policies such as tariffs)
I think we're coming at this with different objectives. Why focus on reducing expenses for the poor, or "invest in the future of the poor"? Poverty is 100% curable: it's a lack of money. As MLK wrote, “the solution to poverty is to abolish it directly by a now widely discussed matter: the guaranteed income. ... The time has come for us to civilize ourselves by the total, direct and immediate abolition of poverty.”
We definitely want the same outcome, and given we both attended the Chicago Plan series, we want the same mechanism, public money creation for the public good. That money will also ensure all idle resources are used productively. But the public good needs public goods - schools, hospitals, infrastructure, a sustainable environment, affordable housing, ... . That means we need to cut private consumption with taxes. Such investments should mean a shortage of labour, full employment and little if any poverty. Social insurance of some kind, like a basic income could protect those who fall between the cracks. But public housing would directly stop homelessness. Free tuition would directly stop any barrier to a motivated youth. Public health would prevent the bankruptcy problem that private health has created ... etc.
The Hgsss experience has made me realize that as we got double income families, housing prices rose faster. The banks raised the appraisals and leant more money. The result was families were not much better off with the extra money. The rentiers has extracted the extra income. UBI could be vulnerable to that.
Money creation can and should be divorced from the budget. This can be done by reducing payroll taxes on the fly and giving unbudgeted bonuses to welfare and pension recipients. This is important for two reasons:
1. It eliminates the very real concern that politicians will inflate the currency in order to pack the budget without raising taxes, and
2. The right amount of money to infuse into the budget must be adjusted weekly. We cannot know how much money to infuse a year in advance.
Payroll tax adjustments and bonuses are one possible solution, but it's unnecessarily complex and benefits some citizens more than others. UBI is simpler, more efficient, and gives everyone an equal hand up. It also addresses your first point: when the only way Congress can add currency is through UBI distribution, they'll still have to utilize taxes, and those taxes will be progressive in tandem with UBI.
To your second point, there's no "right amount of money." (There are wrong answers, however.) Different countries target different rates of inflation; these are policy questions. (Just like allowing poverty to exist.) I believe stability is more important than weekly micro-adjustments. Annual projections will never be perfect, but they are very functional--when I was in the legislature, we worked out two-year budgets.