The Fatal Trap UBI Boosters Keep Falling Into

https://thereader.mitpress.mit.edu/the-fatal-trap-ubi-boosters-keep-falling-into/

by pseudolus • 8 months ago

4 6 8 months ago

thereader.mitpress.mit.edu

mojomark3• 8 months ago

Since this seems to be focussed on the US economy, can someone (...anyone), explain how a country that is many tens of trillions of dollars in debt can afford to pay a UBI in lieu of buying down national debt?

It feels like someone who can't pay their home mortgage deciding to make a donation to a favorite charity.

ai_critic2• 8 months ago

There's an assumption there that buying down the national debt is an important goal. Reasons that one might not want to take that position:

* Having debt helps keep a currency useful as a global reserve and store of value, with great soft-power benefits (though, honestly, the reverse is more true--being the reserve currency makes running up a debt easier).

* Having debt helps keep us out of capital-W War, as it binds nations together financially--if we owe another country a sufficient amount, they have a vested interest in seeing it come back. (Incidentally, historically, this is a shaky assumption as well.)

* Having a policy allowing for debt helps make re-investment in infrastructure and civilization-scale efforts more easy to accomplish.

* Having a debt helps encourage inflationary currency policy, which (in moderation!) has knock-on stimulatory effects on the economy. Some minor inflation is good for helping to encourage people to spend rather than hoard.

The more cynical take, of course, is: how can we not afford to pay UBI?

* Is it cheaper to remove, retrain, or simply resupply folks who are otherwise economic unproductive?

* Is it politically expedient to buy off the population whose only useful product is votes than to balance the budget?

* People are upset about work and making rent today...creditors of the US are some distant threat, and it's unlikely any politician will be in-office when that bill comes due--why hold off?

* We've spent more money on dumber things, what's wrong with this?

I don't exactly agree with any of the above points (in either category), but it's not hard to imagine people who do.

mojomark3• 8 months ago

Thanks. I do understand the value in holding debt, to my engineering brain it's analogous to a heat sink - without it, energy (money) has impetus to flow. I guess I don't have a good sense for what "the right" amount of debt is for a country, so to your point, I don't really have solid reason to assume we should even care about buying down our debt.

I think the root of my confusion was clarified by the other reply above - it's not that the US just has a stash of excess capital coming in and UBI is a way to spend it, but rather UBI is a way for a government to step in, and force it's ultra-rich citizens to put their money back into the economic engine at the base level... like an artificial mechanism to account for some percieved flaw in the natural capitalistic process.

jltsiren• 8 months ago

Most serious UBI proposals are almost cost-neutral. In other words, most people would not get any more money than they already get.

The main source of funding would be income taxes. The highest or second highest income tax bracket would start at 0. If you earn your living, UBI would be little more than an accounting trick for you. You would get some "free" money but pay higher taxes, and the end result would be more or less the same.

Some tax credits and deductions might go away, and related taxes such as capital gains taxes might also change.

UBI would replace some existing welfare benefits and make them automatic. The biggest impact would be on those in minimum-wage jobs and those alternating between unemployment and low-income jobs. Their financial situation would improve, and they would also face less bureaucracy. And this is pretty much the only place where UBI would be more expensive than the current system.

mojomark3• 8 months ago

Ah, thanks. So, the "universal" in UBI is a misnomer since everyone is society is not actually getting the stipend equally. Rather, it's a redistribution of funds from the rich to the poor. I would think a better name for it then would be a "Robinhood System" vice a "UBI".

The Fatal Trap UBI Boosters Keep Falling Into

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