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Posts Tagged ‘universal basic income’

The Hidden Costs of a Universal Basic Income | Mises Wire

Posted by M. C. on October 10, 2019

A likely outcome is a significant decline in the overall output of the economy — meaning impoverishment across the board…

The universal basic income (UBI) is gaining popularity as the alternative to the current welfare system. The idea is to give each citizen the same amount of money, no matter if he or she works or not. Therefore, unlike traditional welfare systems, the UBI has no means test, nor willingness-to-work test. Nobody would be then left without a livelihood even if there is no work for him. Doesn’t that sound great?

The problem is that the program must be financed somehow. Let us assume for simplicity that there are 250 million adult Americans and that each of them would receive $1,000 monthly (as presidential candidate Andrew Yang proposes). So we get a total cost of $250 billion monthly and $3 trillion annually. It would amount to about 14 percent of US GDP, or 42 percent of total government spending, or 73 percent of the federal outlays. For comparison, this is more than the total expenditure on health care, defense, and education. And yet we are talking about “just” $12,000 annually (or 19 percent of the median household salary, or 36 percent of the median personal income). Good luck with such an expensive program!

This is why the UBI is a utopian idea. Its introduction would require either a departure from universality (e.g., providing benefits only for young people), or a departure from unconditionality (e.g., the introduction of an income criterion), or reducing payment to small symbolic amounts. Other options include a radical increase in taxes, or implementing “modern monetary theory” and launching the printing press.

The first two options would distort the idea of ​​the program, transforming it into another traditional welfare program. The third scenario would not fulfill the program goals, as it would neither eradicate poverty nor significantly increase social security. And the last two options would have negative overall economic consequences that could lead to the results contrary to the intentions of the program, (e.g., an increase in the unemployment rate as a result of additional tax burden on wages), or a reduction in the amount of real benefits as a result of increased inflation. It means that the implementation of the UBI at a substantial level without incurring significant economic costs is a myth.

This is confirmed by a recent article “Basic income or a single tapering rule? Incentives, inclusiveness and affordability compared for the case of Finland” published by OECD economists on the occasion of an experiment with UBI in Finland (which was not a government program). They estimated that the replacement of the current social benefits system by the UBI in Finland would either be too expensive or would mean insufficient benefits for the most deprived and, consequently, an increase in the share of people below the poverty line from 11.5 to 14.3 percent!

The second economic problem with UBI is the negative impact on the labor supply. Economic analysis clearly suggests that an increase in non-wage income shifts the budget constraint line up and increases the reservation wage, which leads to a reduction in working time. And this is what the previous experiments with negative income tax, a concept similar to the UBI, showed — especially in case of women and youth, which were less attached to the labor market. The results are not surprising given the fact that giving people money for nothing reduces the opportunity cost of not working…

Such a perverse perspective is, however, a consequence of the view that UBI should be a right, not a privilege. That is, supporters believe that everyone should have the right to taxpayer-provided income, regardless of their contribution and the possibility of earning on the market. The problem is that someone would have to finance this program, so UBI would still be the privilege of some people at the expense of others. One person’s right to a basic income means that someone else has to pay for it.

The idea of the UBI boils down to breaking the link between income and work, i.e., freeing people from the unpleasant necessity to earn. And here we come across several problems. First thing: who will do the needed, albeit low-paid jobs, since everyone will be emancipated from the yoke of work? Is it possible to eliminate the unpleasantness of work at all or is it just the reality of the temporal world? Will robots take care of our grandmothers? A likely outcome is a significant decline in the overall output of the economy — meaning impoverishment across the board…

But there is a paradox that comes with the promise of socioeconomic independence: someone still must pay the UBI. So the dependence would not disappear — only people would become more dependent on Leviathan. Robert Nisbet writes in The Quest for Community that the desire for a sense of belonging does not disappear — if it cannot be realized within the family, neighborhoods, and regional communities, then the gap will be filled by the nation and centralized state. Are you sure this is what we want? Maybe the UBI is thus not merely a utopia we can’t afford, but it’s actually a dystopia?

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A World Without Work: Universal Basic Income's "Deal With ...




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Of Two Minds – The Road to Hell Is Paved with Virtue-Signaling

Posted by M. C. on August 16, 2019

It’s impossible to even discuss issues of citizenship and immigration as they relate to the long-term impact of devaluing citizenship

Charles Hugh Smith

The idea that everything will be solved if we borrow a couple more trillion and give it away is the dominant paradigm.

The road to Hell is paved with virtue-signaling: rather than actually solve the knotty problems that are dragging us toward the abyss, we substitute self-righteousness for problem-solving. That is virtue-signaling in a nutshell.

Virtue-signaling goes hand in hand with the only “solution” that’s politically correct: throw a borrowed trillion dollars at the “problem”, dance the humba-humba around the bonfire at midnight and hope that magic will resolve the underlying issues.

Hence the calls for Medicare for All, Universal Basic Income, and free college for all, all paid with borrowed money, despite the virtuous bleatings that “taxes on the rich/robots” will magically pay for trillions of additional dollars to be squandered on corrupt, self-serving cartels…

As for the “defense” industry, a.k.a. the military-industrial-intelligence cartel: rather than do the hard work of redefining America’s role in the world (declining to pursue wars of choice and policing the world) and then right-sizing the armed forces for the emerging realities of automated warfare, cyber-warfare and asymmetric warfare, we spend trillions of dollars on a jumble of horribly costly legacy weaponry with a sprinkling of pixie-dust “innovation.”

This also describes the higher education cartel, a horribly costly legacy jumble that’s failing students while enriching insiders and lenders. It also describes the standard institutional response to knotty issues such as homelessness: the conventional legacy “solution” is to insist on building “affordable” housing at $400,000 per unit, which means we can build 1,000 units rather than the 100,000 units of super-low-cost housing we need…

It’s impossible to even discuss systematically downsizing America’s role and military footprint without being accused of treason, as virtue-signaling support for the Imperial Project is necessary to broadcast your membership in the politically correct camp.

It’s impossible to even discuss the connection between the high-profit snacks and sugar-water beverages that fill supermarket shelves and diabesity and metabolic disorders, or the connection between the decline of community and the rise of the Savior State…

The best lack all conviction, while the worst are full of passionate intensity. The road to Hell is paved with virtue-signaling, and we are about to discover that virtue-signaling, self-righteousness and indignation are not substitutes for the difficult task of completely restructuring failing institutions, modes of production and governance.

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My Future Lies Beyond the Yellow Brick Road | VoVatia





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4 New Reasons to Fear a Universal Basic Income | Mises Wire

Posted by M. C. on June 21, 2019

While it’s true people ought to be able to spend their own money as they see fit,  how they spend other people’s money is another matter.

This is Cloward-Piven in action.

The Cloward–Piven strategy is a political strategy outlined in 1966 by American sociologists and political activists Richard Cloward and Frances Fox Piven that called for overloading the U.S. public welfare system in order to precipitate a crisis that would lead to a replacement of the welfare system with a socialist system of “a guaranteed annual income and thus an end to poverty”

Take this to it’s natural conclusion. What happens when everyone is on the dole?

Who will teach, put out fires, be your doctor?

Most of us have heard the arguments from the Left on the emancipatory power of the Universal Basic Income Guarantee to free us from the chains of work, stress and poverty, and to liberate the creative impulses of man. We also hear from conservatives like Charles Murray, who stress that welfare cliffs under the current system create a poverty trap, where by earning more people will take home less, creating a permanent disincentive to work which the UBI would partially solve.

There is a contingent of libertarians who also hold the view that the UBI is better than the current system. They highlight the fact that bureaucratic costs will be lower and, theoretically, many public sector workers could be axed from welfare departments — reducing the overall size of the state. Government outgoings on law enforcement could be reduced, if the UBI leads to a drop in poverty-driven crime. And, if people are already receiving the basic means of survival, we can cut regulations around hiring and firing people and labor laws, since workers, faced with poor conditions, will have the f-you money to walk away from them. What’s more, if people can shop around for services currently provided by the government then some programs can be cut into the bargain.

Ultimately, since people would be given their basic income directly to spend as they please, it would preserve the market economy relative to more intrusive forms of government assistance or central planning, where officeholders and bureaucrats attempt to organize production “on behalf of the poor” (or “the workers” or “the people”) leading to a disastrous misallocation of resources and authoritarian dictatorship.

At least that’s what the pro-UBI libertarians claim…

One: Even if the UBI will allow us to replace all sorts of systems and reduce the size of government, that will not be the end of the story. UBI will inevitably grow arms and legs.

After the UBI is instituted, it will only be a matter of time until we hear this group or that group should be earning an even higher basic income. “I am disabled, I should have a higher basic income, some may say. Or other may object “All my relatives live in a more expensive city, so I need a higher basic income.” And so on. Then people will advocate for a higher UBI for the elderly, disabled, people who live in areas where the rents and costs of living are high, or where they have to travel long distances to work, and so on. Ad infinitum

Two: Perhaps the scariest aspect of it all is that in most cases when the government creates handouts, there is always a group that stands to benefit and another that stands to lose. With the Universal Basic Income it seems on the face of it that there is no “out” group. Everyone is in on the action.

But that’s not really the case.

The state, policymakers, and government employees will benefit relative to everyone else.

After all, the UBI legitimizes government and brings everyone into a system which they could otherwise often ignore. The state is provider, and each of us becomes its ward…

Three: The UBI will not get rid of those who constantly call for ever higher levels of social benefits, and total  numbers of people who “need” UBI will not decline. This is because a UBI will not, and cannot, address the underlying causes of poverty and inequality — which is that poor people have low skills and no capital…

Four: With the UBI, the state is potentially handing out a large sum of money each month to people who may spend it to ruin their own health, or destroy their lives. Individuals with substance addictions, gambling problems or bad spending habits which get them in trouble. People who are addicted to computer games or Facebook might benefit from getting out to work in a bar or cafe and mingling with the public for some occupational therapy. But the UBI will allow them to isolate themselves further. Thus, in many cases with the UBI, payments may not actually be helping people. Recipients lives could be made worse by payments.

It takes a pretty callous person to say, “Well, it’s their life, they’ve got a right to ruin it. Let them take out their UBI and spend it on hard drugs if they want to.” While it’s true people ought to be able to spend their own money as they see fit,  how they spend other people’s money is another matter…





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Universal basic income doesn’t work. Let’s boost the public realm instead

Posted by M. C. on May 6, 2019

Yah but, this “Report for Unions” still advocates free stuff. Just a different form.

Improve equality and “Redistributing” tax allowance – this still makes some equal at the expense of others.

Government deciding what is best for you and how much it will cost you. Always a winning strategy.

One thing for sure – those getting stiffed stays the same.

Anna Coote

A study published this week sheds doubt on ambitious claims made for universal basic income (UBI), the scheme that would give everyone regular, unconditional cash payments that are enough to live on. Its advocates claim it would help to reduce poverty, narrow inequalities and tackle the effects of automation on jobs and income. Research conducted for Public Services International, a global trade union federation, reviewed for the first time 16 practical projects that have tested different ways of distributing regular cash payments to individuals across a range of poor, middle-income and rich countries, as well as copious literature on the topic.

It could find no evidence to suggest that such a scheme could be sustained for all individuals in any country in the short, medium or longer term – or that this approach could achieve lasting improvements in wellbeing or equality. The research confirms the importance of generous, non-stigmatising income support, but everything turns on how much money is paid, under what conditions and with what consequences for the welfare system as a whole.

From Kenya and southern India to Alaska and Finland, cash payment schemes have been claimed to show that UBI “works”. In fact, what’s been tested in practice is almost infinitely varied, with cash paid at different levels and intervals, usually well below the poverty line and mainly to individuals selected because they are severely disadvantaged, with funds provided by charities, corporations and development agencies more often than by governments.

The Alaska Permanent Fund, built from the state’s oil revenues, pays all adults and children a dividend each year – in 2018, it was $1,600 (£1,230). The scheme is popular and enduring; it has been found to produce some positive impacts on rural indigenous groups, but it makes no claim to sufficiency and has done nothing to reduce child poverty or to prevent widening income inequalities…

The report concludes that the money needed to pay for an adequate UBI scheme “would be better spent on reforming social protection systems, and building more and better-quality public services”. Redistributing the personal tax allowance and developing the idea of universal basic services (UBS) could offer a more promising alternative. This calls for more and better quality public services that are free to those who need them, regardless of ability to pay. Healthcare and education are obvious examples, and it is argued that a similar approach should be applied to areas such as transport, housing, social care and information – everyday essentials that should be available to all. Collective provision offers more cost-effective, socially just, redistributive and sustainable ways of meeting people’s needs than leaving individuals to buy what they can afford in the marketplace.

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Free lunch.




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Forget Guaranteed Income — Governments Should Stop Destroying Income First | Mises Wire

Posted by M. C. on March 23, 2019

…Therefore, if UBI proponents are genuinely concerned about those on the lower rungs of the income ladder, they should abandon their minimum income crusade and instead pressure the government to do two things. First, immediately abolish all regulations which prohibit people from earning income. Second, announce that all welfare programs will be abolished in six months. In this environment, special interest groups (the 1%) lose the regulatory benefits they lobbied for, while the level of prosperity rises considerably for the former welfare recipients and other members of the 99%.

What are these regulations? And if they are abolished, how much higher can the level of prosperity be for the 99%?


…When a special interest group (e.g. a corporation or group of corporations) lobbies the government to enact a new regulation, they are the intended beneficiaries, and they often write the regulation themselves. Politicians promoting a new regulation also act out of self interest, collecting rewards from the regulatory beneficiaries, such as political campaign contributions, corporate jobs after departure from political office etc. The propaganda used to justify regulations is that the government must protect consumers 

Prohibited Income

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Another Totalitarian Communist – LewRockwell

Posted by M. C. on March 18, 2019


His name is Andrew Yang. His proposals are here.

We have a choice in assessing the Democratic hopefuls like Yang, Harris, Sanders, O’Rourke, Warren, Booker, Biden, etc. Are they colossal idiots, or are they Communist Totalitarians?

We know their ideas, and these ideas are so bad, so destructive and so evil, that we might think that these people are colossal idiots.

That would be a mistake. They have given detailed plans. They are mature people. They are successful people. They are educated. They are advertising their policies and actively seeking power.

We MUST assume that they know exactly what they’re proposing and what they intend to do if given power. We MUST take them at their word. It’s not plausible to dismiss them as morons. They didn’t get where they are by being stupid. They didn’t draft detailed communist policies for the fun of it. They are telling us to our faces what they believe and what their intentions are.

We MUST assume that these people are fully aware of what their plans for us mean. In that case, they all have to be viewed as Totalitarian Communists. Read the rest of this entry »

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Of Two Minds – A Radical Critique of Universal Basic Income

Posted by M. C. on December 7, 2017

UBI is the last gasp of a broken, dying system

Universal Basic Income (UBI) is increasingly being held up as the solution to automation’s displacement of human labor. UBI combines two powerful incentives: self-interest (who couldn’t use an extra $1,000 per month) and an idealistic commitment to guaranteeing everyone material security and reducing the rising income inequality that threatens our social contract–a topic I’ve addressed many times over the past decade. Read the rest of this entry »

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Zuckerberg on the Biggest Something-for-Nothing – LewRockwell

Posted by M. C. on July 2, 2017

Harvard dropout and Facebook billionaire Mark Zuckerberg recently gave the commencement address at Harvard. In his speech he proposed a “universal basic income to make sure everyone has a cushion to try new ideas.”

We already have a universal basic income. It is called welfare. Read the rest of this entry »

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The Evil Zuckerberg – LewRockwell

Posted by M. C. on June 5, 2017

The most important thing to look at, however, is not the technical ramifications of UBI—whether it’s technically possible. A bigger question is who allocates these things. Because, obviously, it’s going to direct more power to the government. They’ll determine how the fruits of all this get distributed. Read the rest of this entry »

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Zuckerberg Calls for Government to Give Everybody ‘Universal Basic Income’

Posted by M. C. on May 26, 2017

What Zuckerberg, Soros mini me, really wants is universal dependence on government and its cronys. CIA/In-Tel-Q funded Facebook being one of those cronys.

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