Opinion of Universal Basic Income

[TheDeadFlagBlues]

Seems like a grossly inefficient way to create a reasonable social safety net (particularly if as described by Muon2, with the highly questionable assumption that government should be running companies, and that such companies would ever generate a profit), and without any incentives for life style changes. HP.

This is a bizarre statement. The one thing you cannot say about a universal basic income is that it would be an inefficient means of economic redistribution. It's, as a matter of fact, the most efficient means of redistributing income and, arguably, wealth.

As far as the social safety net goes, you might have a point as far as various kinds of social insurance go (private provision of insurance is fraught with problems of market failure) but, again, a universal basic income is far more efficient than forcing poor people to go through a screening process to receive payments for disabilities or TANF or whatever. The screening process is expensive. Poor people also despise the process.

As far as lifestyle changes go, that's not particularly relevant, is it? Do you actually think that the social problems associated with poverty are the cause of poverty? If so, I suggest you take a few minutes to think about this issue: do you really think it's more plausible that someone was driven to homelessness because they were an alcoholic or that they were driven to alcoholism because of their homelessness?

Look Torie, if you're willing to pay higher taxes so that poor people are forced to suffer before receiving transfer payments, be my guest but at least be honest about the arguments you're making.

[TheDeadFlagBlues]

do you really think it's more plausible that someone was driven to homelessness because they were an alcoholic or that they were driven to alcoholism because of their homelessness?

Alas, at least in rich societies, the former is far more likely to be true.

I am not blaming the poor here. In fact, alcoholism is a disease that derserves treatment - like any mental disease or addiction. But your assertion is, in fact, quite bizarre.

Except it's not bizarre: you are making a statement based on conventional wisdom alone. Just because you are an economist and muon is a legislator does not mean that you understand anything about the psychology of drug dependence or homelessness. The reality is that there are a number of causal factors that are related and disentangling them is very difficult. I believe that a given homeless person was far more likely to be dependent on drugs or alcohol before they were driven to being homeless than a given member of the population but I don't think this number is high enough to merit the hand-wavy claims that you are making. Where is your evidence?

Fwiw, I have evidence, the issue is that I'd have to try very hard to produce journal articles for you because the evidence is contained in the citations of a book I read 3 years ago. I don't remember any of the authors off of the top of my head. Suffice it to say that there have been a number of really illuminating "difference in difference" type case studies conducted that demonstrate that, when given shelter, most of the homeless are pretty employable, sharply curtail drug/alcohol use etc.

I can, however, produce links that quite strongly argue against your points:




These images were taken from a CAP paper titled "On the Streets" which can be read here: https://www.americanprogress.org/issues/lgbt/report/2010/06/21/7983/on-the-streets/

The fact that being LGBT is correlated with homelessness and being LGBT and homeless is correlated with alcoholism is a data point that quite strongly argues against your claim. Do you think that being gay predisposes you to abusing drugs? The answer is, of course not, these people abuse drugs/alcohol at high rates because they're at a higher risk of being sexually or physically assaulted due to their sexual orientation or gender identity and alcohol is a coping device. They were cast out of their families/social networks for their identity and, as a result, have a bad time.

[TheDeadFlagBlues]

Once again: I am all in favor of well-designed anti-poverty programs. But "universal basic income" would be a pro-poverty  program.

Have you ever read about the Mincome experiment or experiments in Namibia or the experiment conducted for Nixon's negative income tax proposal? If not, I can't take anything you write about this topic very seriously because, well, it's not intellectually honest nor is it economics.

The economic case for a universal basic income or a negative income tax is pretty straightforward: it's more efficient and, yet, more expansive than other kinds of targeted welfare programs. It clearly would produce substantial increases in human health, educational attainment and also, strangely enough, decrease incidences of spousal abuse. Considering that it has never been implemented at a national level, we cannot compare its efficacy to conditional cash transfers but I suspect that the wild success of CCTs is largely related to the fact that the money is offered as an almost guaranteed source of income; it's not particularly difficult to provide incentives for people to send their kids to school or to have them have check-ups. Give poor people money without strings attached and I imagine they'd make fairly similar choices.

Anyways, I'd support a CCT program in the US. I don't particularly care. The point is to redistribute income and wealth in an efficient manner that also increases the growth path a country is on.

edit: I didn't see one of your posts. Um, google "mincome" or read about universal basic income experiments. I think you have the capacity to find this data yourself. It's pretty clear and also quite stunning. If you don't want to believe the data and are searching for reasons to claim that it's implausible, I pity you because this means that you have a very dim view of the poor and also of the human condition. There are reasons to be skeptical of the viability of a negative income tax or a universal basic income in the long-run but none of them are related to the claim that "it would, pretty much, guarantee an existence of a stable underclass, without any education and any experience of employment in generations".

[TheDeadFlagBlues]

Once again: I am all in favor of well-designed anti-poverty programs. But "universal basic income" would be a pro-poverty  program.

Have you ever read about the Mincome experiment

You mean, a series of (mostly short-term and not entirely randomized)  1970s studies that pretty much established that giving people cash for not working results in nearly proportional reduction in wage income? Yes, I heard of those. Hard to say how this aids your argument, though

I mean, there is a reason why those studies did not lead to a wide adoption of this policy.

Except, the thing is, this was concentrated among two very specific demographics in the case of Manitoba's Mincome experiment: mothers of young children and high schoolers. To my knowledge, there was not a drop-off in "wage income" for other demographics that was statistically significant. When it comes to public policy, exactly which demographic is more affected by increases in non-labor income matters a great deal, no? I don't particularly care if more young people drop out of the labor market to finish their studies or if young mothers drop out of the labor market to raise their kids; this is actually pretty desirable and highlights the benefits of a universal basic income.

Well, no, the reason why there was not a wide adoption of the policy relates to shifts in political power.

[TheDeadFlagBlues]

We already have a growing underclass of people who go through much or all of their adult lives without ever finding stable employment. I don't really understand the objection, because they're already here whether you see them or not.

Well, the objection is that something should be done to get them out of it, should it not? There are many ideas out there that would, at least, try doing it.

What are they, though, and where is the political will to implement them - ideally before we elect more Berlusconi's, more Trumps, more Le Pens, more Orbans?

One other policy that has been mentioned is the EITC. But the scope of something like the EITC is more limited, and it has similar effects on disincentiving work for certain people (or, just as likely, encouraging them to leave more income unreported - which IMO is an under-discussed aspect of declining prime age workforce participation, although maybe it's more studied than I realize), not to mention making it more difficult for the typical person to calculate whether additional work is really worth their while.

You seem to have something different in mind, though. Well, what is it? Let them eat charter schools? Let them eat four-year degrees that lead only to debt, contempt, and underemployment? Maybe yet another half-hearted effort to push the most unskilled, unfocused, and unprepared students into trade schools that they are unlikely to ever finish? Or perhaps yet another healthcare initiative that makes the US healthcare sector into an even more expansive haven for educated Americans who want stable jobs with middle class compensation and can't get then elsewhere? (Let's put a "care manager" in every practice. Let's hire another few grants people at the hospital, every practice needs a team of experts to set up its EHR, etc.)

I agree that the scope of the EITC is inherently limited because it, as a matter of fact, cannot aid those who have been pushed out the labor market and is a fairly useless policy for single mothers because no amount of extra income can change the economics of childcare. However, it's "low hanging fruit" and it ought to be dramatically expanded for childless single earners who are below the poverty line.

Irritating platitudes about "handups not handouts" aside, the EITC is a remarkable policy option.

[TheDeadFlagBlues]

I mean social policy is difficult and economists (of whatever hue) tend not to grasp this.

Considering how many economists spend most of their time thinking about how difficult it is, I find your statement somewhat perplexing. I mean, if economists did not grasp the difficulty of social policy, why would we still have any research in economics? Why would there be econ departments at universities?

Because economics isn't primarily, or even secondarily, a discipline that studies "social policy"? Generally speaking, that seems to be the domain of "policy theorists" at places like the JFK School of Government at Harvard and probably applies more to sociologists or political scientists than economists...

I'm not an expert. In fact, I am very stupid and ignorant also. However, I have also read enough to recognize the different approaches that each academic discipline takes to understand social problems and social policy. Economics, in particular, lends itself to parsimonious, generalizable explanations that fit into the framework of models. This is all well and good: it is the strength of economics as a discipline, one that has made it an "imperial" discipline because its methodology is inherently superior as an applied social science. However, it also lends itself to hand-wavy explanations that ignore the particular difficulties of carrying out social policy among particular communities that might have different practices or the strange nature of bureaucracies etc.