Economics, recent

In Defense of Andrew Yang’s Freedom Dividend

We should replace the ragbag of specific welfare programs with a single comprehensive program of income supplements in cash — a negative income tax. It would provide an assured minimum to all persons in need, regardless of the reasons for their need…A negative income tax provides comprehensive reform which would do more efficiently and humanely what our present welfare system does so inefficiently and inhumanely.
~Milton Friedman

I get emotional about facts.
~Andrew Yang

Although we are still a long way from the 2020 presidential campaigns, whispers of who the Democratic candidates will be and what policy platforms will be adopted is steadily droning into an orchestra. We can already predict some of the names that are likely to appear on the ballot sheet and the talking points that will be heard on the campaign trail, and it would not be imprudent to suspect the upcoming election will be even uglier and more contentious than the last. While the overwhelming majority of political pundits seem to be pouring their energies into slamming the current president—criticizing old models rather than conjuring new ones—many are wondering what will be left standing in the wake of yet another crashing political wave.

Onto the scene struts presidential candidate and serial entrepreneur Andrew Yang, whose growing popularity was recently capped with an appearance on Joe Rogan’s herculean podcast. The reception was overwhelmingly positive. Yang is running on a Universal Basic Income platform, a policy proposal whereby $1000 dollars a month will be allocated to every U.S. citizen, in response to the impending proliferation of Artificial Intelligence and automation that is projected to cause massive job displacement in the next decade.

There are reasonable arguments to be leveled in good faith against the UBI platform, which Yang has dubbed “The Freedom Dividend,” but what was once considered a utopian pipedream is beginning to sound more plausible in light of the unfolding tectonic economic and technological shifts. At a minimum, it is well worth digesting Yang’s diagnosis of the problem in detail, whether or not we agree with his solution.

We are in the third inning of what Yang calls “The Great Displacement.” Between 2000 and 2015, America automated away 4 million manufacturing jobs (four times the amount lost to globalization), many of which were in swing states Donald Trump won in the 2016 election. Many more jobs are projected to disappear in the transportation, retail, call center, food service, and even clerical and administrative sectors due to the ongoing advances in autonomous technologies. The wave is coming. A report published during Obama’s final days in office predicted that 83 percent of jobs where people make less than $20 an hour will be subject to automation or replacement in the near future, and between 2.2 and 3.1 million driving jobs in the US will be eliminated by the advent of self-driving vehicles.

To make matters worse, the projections for job loss due to automation are pretty consistent across the board—coalescing at about 20–30 percent of jobs being subject to automation by 2030 among various research and financial institutions (Bain Capital, McKinsey, MIT)—which means the projections are probably accurate. All the while, GDP has risen over 3 trillion dollars in the last few years amidst these vast technological developments. En masse, America is the richest country in the world.

To add insult to injury, the American economy is less dynamic than ever before. The job participation rate is at 62.9 percent today, below nearly all other industrialized economies. People are less and less inclined to start a business, with 100,000 fewer businesses sprouting up per year than was the rate just 12 years ago. Furthermore, 59 percent of American counties watched more businesses close than open between 2010 and 2014. Americans move from state to state and change jobs at lower rates than at any point in the last few decades. A Bankrate survey conducted in 2017 found that 57 percent of Americans don’t have enough savings to pay an unexpected bill of 500 dollars. Meanwhile, drug overdoses have risen above car accidents as the most likely accidental cause of death for Americans, and suicide has risen so sharply that it has actually lowered the national life expectancy rate. The decay and despair is palpable to anyone who walks around an American city not handsomely nestled in a coastal bubble.

So why is basic income the answer to these problems? The Freedom Dividend is not Yang’s only proposed solution, in fact he has 75 other policy initiatives listed on his website including remodulating our measurements of GDP and instituting digital social credits as a local currency. But UBI is central to his campaign, proposed with the intention of giving American citizens much needed fiscal breathing room and making the requisite adjustments to the massive technological and economic transformation on the horizon. One thing is clear: We cannot continue on our present course without addressing “The Great Displacement” in some shape or form through public policy, and there is little evidence to suggest the market will spontaneously adjust to these immense changes.

There are three major critiques of Universal Basic Income: Cost, Inflation, and Incentive.

To provide 1000 dollars a month to every American citizen today, the headline cost would be about $2.4 trillion a year. The federal budget is around $4 trillion a year, distributed between mandatory spending (i.e. Social Security and Medicare—about $2.4 trillion), discretionary spending (i.e. military programs—about $1.11 trillion), and interest on federal debt (about $364 billion). With that in mind, $2.4 trillion sounds pretty steep.

But there are other avenues through which UBI could be paid for. If the gains from artificial intelligence and new technologies were harnessed, there would be a surplus of wealth to invest into the economy. Yang has proposed instituting a value added tax on all goods and services, at every level of production and distribution, putting the onus on large companies who benefit most from automation.

This is estimated to generate almost $1 trillion in national revenue, and when we take into account the $800 billion spent on welfare that would decrease in the wake of UBI, along with the tax revenue generated from the extra $1000 a month circulating back into the economy and the 100s of billions that would be saved in healthcare, incarceration, and homelessness services, the Freedom Dividend could end up paying for itself. That is not to mention the potential value gains from having a population with higher rates of education, health, nutrition, and productivity that are estimated to improve with UBI according to a number of studies on already existent trial runs. (The state of Alaska, the leading example, instituted a dividend for its citizens over 30 years ago primarily funded by oil money, and Yang is quick to note that technology is the oil of the twenty-first century.)

That is optimistic. Allocating funds from the myriad social programs already in place into a UBI could prove to be a dicey process, and taxing powerful corporations has never been child’s play. Another issue often brought up against a UBI platform is the prospect of inflation. If more wealth is being distributed across the population, won’t that make for increased prices and lead to a decrease in the value of money?

According to Yang, inflation has been low for years because globalization and technology have been helping reduce the cost of goods and services, and there is no good reason to believe that trend wont continue. Even after the 2008 financial crisis, when the U.S. government printed $4 trillion, we have not seen a meaningful rise in inflation. If the Freedom Dividend were indeed able to pay for itself through a value added tax, the liquidation of other social services, and a general stimulation of the economy (the Roosevelt Institute estimates economic growth of about 13 percent and an increase in the labor force by about 4.5 million people), the money supply circulating in society would not increase substantially. This would produce little to no inflation. Yang also points out that the central areas of inflation tend to fall into the protected dysfunctional markets of housing, health care, and education rather than consumer goods where prices are actually falling.

Finally, one of the most common and reflexive arguments leveled against UBI is that it mirrors the fundamental flaw of the Welfare State: the absence of a stable incentive structure. If every American citizen is going to receive free money with not a single qualification or requirement, won’t we all just become more lazy? I find this to be the least compelling argument against UBI, largely because it fails to acknowledge the actual problem with welfare policies. The issue with welfare is not that it creates no incentive, it is that it creates a disincentive. If a person is on disability, for example, getting better would mean getting off the dole, so there is actually an incentive not to re-enter the job market. If a single mother is on welfare and bringing a husband into the picture will suspend that monthly check, then she will be less inclined to find a husband. It is subtle shift in one’s thought process that enhances an underlying feeling of dependency. The issue with welfare is not that it’s free money; the issue is that the requirements necessary to receive welfare benefits tend to reward failure and punish success.

Of course, there are always going to be lazy people who will take advantage of a free lunch, but that is entirely on them. $1000 a month is not enough to incentivize people to leave their jobs. Human beings are more forward thinking and goal-oriented when there is hope for a better future, and that is harder to come by when we are drowning in bills and stress. People who are uncertain of the future and insecure in the present are not going to be the ones starting a business. A number of studies have shown how the prospect of an unpaid bill can lower IQ and shorten our cognitive bandwidth. It is generally those people who are already financially secure who are more inclined to take an entrepreneurial risk. So, there is more reason to believe a UBI will create a positive incentive structure than a negative one. At the very least, it should not have much effect on incentive at all and will largely reflect things as they already are.

This is not a silver bullet. But what I like most about Andrew Yang and his presidential campaign is that he is approaching modern problems with modern solutions while other candidates either grasp onto an idealized past or dredge up historical grievance. He breaks through the capitalism/socialism paradigm with ideas that could be placed on either side of the aisle, bolstering entrepreneurialism and economic development while also offering aid and support to those who have been caught in the tailwind of the market. His rapidly growing popularity is a testament to his humanist approach to politics and the growing disdain among the American public towards media polarization and identity politics promulgated by the elite stratospheres of society. The silent majority is being roused into consciousness. And that is a good thing.

 

Samuel Kronen is a writer on politics and psychology. You can find more of him on YouTube and FaceBook.

 

203 Comments

  1. ga gamba says

    Dividends are paid on earnings, i.e. revenue – expenses = profit. They are paid to the share owners. i.e. those who took risk of a loss, including a total loss, because shareholders are paid last.

    The US government as well as many states are running chronic deficits, which tells us the expenses exceed revenue. It may be a great idea to run the government like a business. Flip that business model around, pay off the creditors, sack the unproductive, and then we’ll talk. Until then, your ‘dividend’ is the services you paid for… or didn’t pay for if you pay no net income tax.

    The moniker ‘freedom dividend’ is intend to mislead people. You’re not an investor. You’re a citizen.

    • ga gamba says

      the Freedom Dividend were indeed able to pay for itself through a value added tax, the liquidation of other social services, and a general stimulation of the economy

      I can already hear the complaint on the first one. Value added tax, a name that’s unfamiliar to many Americans, is a sales tax, a name that’s well-known to many Americans, so we ought wonder why a new name is used. Know what you’re getting by another name. The tax is passed on to the consumer. Let’s say it’s 20%, which is similar to the VAT in the EU states. This 20% is applied at each step of the process, from raw materials to the tat you see on shelves. Add, add, add, and add. (This may also make imported goods from countries more competitive vice domestically mades ones, so wave bye bye to those jobs.) Further, sales taxes are regressive; they fall disproportionately on the working and middle-class. If that’s what you want, fair enough. But, really what is happening is money is being taken from your one pocket and put into your other pocket with the government as the middleman – presumably it will be located in the area between the two pockets, which is the groin.

      I’m well established in life and I own everything I need. I spend very little of my income on anything other than the necessities of life and car parts, which aren’t a necessity but for a hobby of rebuilding old cars. Now, think about all those young people starting out in life. They have to buy everything. Think of those starting a family and all the things they need to buy. Me, spending very little and thus paying little sales tax, will do very well with free cash. I will be receiving far more than I pay in, and I don’t need it.

      I like the idea of liquidating social services. I’m sure those workers will be overjoyed. But, wouldn’t Friedman’s negative income tax be more effective at putting money in the poor’s hands and not in my pocket? Give to those in need and not to those who aren’t seems to be a time-tested guideline.

      I’m opposed to general stimulation. I support specific stimulation. Be assure it’ll be a money grab and the social justice berserkers will be elbowing themselves to the front of the queue.

      • Aylwin says

        @ga gamba,

        Most businesses (in the UK at least) are “VAT registered” meaning as part of their standard accounting they claim back any VAT they’ve been charged, offsetting it against any VAT due.

        To counter the regressive nature, certain categories of goods are free of VAT or have reduced rates e.g. children’s clothing, food, education (where not free), housing, domestic energy. And someone pays an extra £10000 for e.g. a BMW, rather than something that does the job just as well but without the supposed caché, then they’re paying a substantial amount of that in tax. So some tax comes from a scaled, progressive, income tax, and some from a somewhat, but less so, progressive tax on consumption. Perhaps a good balance?

        • ga gamba says

          To counter the regressive nature…

          But these piecemeal exemptions don’t counter all the regressiveness of VAT, do they? Working and middle-class people buy furniture, housewares, cars, adult clothes, and many other things, don’t they? Young people and recent graduates, who tend to be lower paid, usually don’t have all the items of life someone like me who’s worked 20 years has. It’s been years since I bought anything major, aside from run-down cars and parts. And I could always shift hobbies if mending cars proved too costly. Further, when the VAT is announced, those with money, chiefly the rich, will make major purchases prior to it being implemented. People of limited means don’t have the spare cash to do so.

          Looking to the proposal, the outcome of these exemptions you mention, if they were enacted, on UBI/Freedom Dividend is what then? Less money taken to fund the freedom dividend and all the other freedomy free things of freedom.

          • Ray Andrews says

            @ga gamba

            Ga, that’s the weakest thing you’ve ever posted. Yeah working people buy cars, but not Lamborghinis. Yeah, there will be a rush to avoid the tax, but that’s a one time blip isn’t it?

            Sometimes I wonder if a single, master tax could cover the whole thing: energy. The rich consume much, the poor consume little. Just tax the hell out of energy and abolish all other taxes. Yes, that will hit my ’81 Chevy pickup hard but overall I consume very little energy as opposed to the zillionarire with his corporate jet and heated pool. Just an idea.

          • ga gamba says

            @ Ray,

            How many Lamborghinis are sold per annum? I know how the maximum number super and hyper car produced by each maker annually because it was negotiated by the US gov’t and high-performance / low mgp makers. The US is one their largest markets, but it’s fewer than 2000 Lambos. In 2018 Lamborghini delivered 5,750 cars worldwide. In the US it was 1,952.

            20% VAT on $300,000 is $6000 times 2000 = $120,000,000. I’m assuming Lamborghini sales would dip after the VAT is introduced, and that’s a big assumption. Still, we’re almost there.

            Add the Ferraris, Koeniggeggs, Paganis, etc, and what do you think? A billion max? Great, you’ve taken care of 0.025% of the cost of freedom.

            Sure it’s a one time blip. How many mega-million dollar yachts and personal jets are sold? What’s their lifespan? Yachts last decades. Aeroplanes’ high-endurance jet engines are often specified to last 30,000 hours and usually last longer. The 30,000-hour number is 3.5 years of continuous 24/7 operation, but personal jets aren’t operated 24x7x365, are they? Properly maintained, they last decades too.

            How many vehicles are sold per annum in the US. 2016 set a record of 17.6 million cars and trucks. Where do you think the VAT receipts will come from? It ain’t the rich.

            People have this bizarre idea there are all these rich people who will finance almost everything. If it gets too costly plus the increase in public disdain and antagonism, they leave. They can buy better treatment elsewhere.

      • Ray Andrews says

        @ga gamba

        “I support specific stimulation.”

        I disagree. It is specific stimulation that is the best way to describe the current welfare model and as the author points out, it punishes success. There are any number of variations on the theme, ‘negative income tax’ and UBI are essentially barking up the same tree. As for taxes, again there are many ways of looking at that. The current situation has Amazon paying very low or zero federal tax. Some plutocrats will say there is simply nothing that can be done but I say there is much that can be done. Perhaps business income tax should be abolished entirely to be replaced with targeted sales tax — much on Rolls Royces, little or none on Kraft dinner.

        • ga gamba says

          Rolls Royce sold 1,080 cars in the US in 2018. You’d better make the VAT on them a gorillion per cent.

          Of course, how many they sell afterward is anyone’s guess. Better keep the VAT on Kraft dinner on stand by.

        • Ray Andrews says

          @ga gamba

          “How many Lamborghinis are sold per annum?”

          Point made. But a whole lot of drops in the bucket will amount to something. I know, it’s not a pot of gold, but it is at least something. And as that senator famously said: “A billion here, a billion there, and pretty soon you’re talking about real money.”

          “They can buy better treatment elsewhere.”

          IMHO that has to be fixed. It’s one of the reasons I like VAT, because it doesn’t matter where you live, we tax you on your sales. And of course regular products will need to be taxed, but my idea of welfare is to just not tax basic life necessities … like the latest i-pod 😉

          And yes, the costs are passed on, but that’s fine. If you are buying luxuries you are paying tax on them, if you are buying potatoes, you are not. IMHO that, plus UBI are about all the social programs that need to exist. You know, I’m all for debeureaucratization of the economy, I know that wealth comes from industry not government, and in many ways I’m an arch-conservative … but I also think workers should keep some generous fraction of the wealth that they produce and I would not hesitate to tune my economy to produce that result.

          • Bill says

            I think you miss @ga gamba’s point. VAT, or sales taxes, are extremely regressive because they hit the least able to purchase the hardest. The “evil rich” do not spend 100% of their income (be it salary, dividend, or capital gain). Therefore, they pay the vat % on a % of their total income. The lower and middle classes pay a vat % on virtually 100% of their total income. So in terms of % taxes paid on income, the “evil rich” under a VAT scheme pay a smaller % of their income than the poor — hence very regressive. The same argument the leftists use w/ Buffett as the example. So are those on the Left ok with our income tax scheme where folks like Buffett pay 15% due to LTCG and Dividends vs 38% were it ordinary income? Because that’s exactly what VAT structures the tax code to mimic.

          • ga gamba says

            Let’s look at the VAT receipts of the UK government. Britons have a similar quality of life and purchase many of the same/similar things – it and the US are comparable. A difference is population size. UK is about 65m and the US is 325m; the US is five times larger.

            Here’s a graph of Inland Revenue’s (UK’s IRS) takings through the years. In 2017/18 it took £125 billion ($165 billion at current FX rate). Multiply that by five to get a good idea of how much the US would take if it implemented the same 20% VAT rate and applied the same compassionate exemptions previously mentioned. It would be $825 billion. OK, so US VAT covers 21% of the freedom dividend; it can fund about $200 per month of freedom from VAT. Where will the other $800 be found?

            So, not only is the VAT regressive taxation, it’s also far from capable of covering the price of freedom’s expense.

          • Ray Andrews says

            @ Bill

            “VAT, or sales taxes, are extremely regressive”

            Regressive or not a one-stop solution? I can say with confidence that few working class or middle class people buy Lamorghinis, so surely a VAT on those is progressive?

            [BTW, I hate the word ‘progressive’ it implies something good, and most of what our ‘progressives’ are doing is not good, not is it automatic that ‘progressive’ taxation is good either — I think it is good but it is not good by virtue of being ‘progressive’ and overly progressive taxes are known to be bad.]

            But yes, there is the accumulated wealth issue. It doesn’t bother me very much if people have saved up. But taxes on dividends and wealth taxes are to be considered. I like my energy tax idea. But it seems to me that as I mentioned previously the question is simply this: how much of what workers make do they get to keep? Should it be as much as a third? Actually, what is the number currently? No one ventures to calculate it. People who do real work are in the minority already. The parasites below them are usually not rich, but the parasites above are often rich beyond the dreams of Croesus.

            In Guatemala the workers keep much less than 10% of what they produce. Here? Maybe a quarter? Anyway, the plutocrats assure us that the workers need to give much more, they’ve been living too high off the hog for too long. The UBI would seem to increase the load on the workers, but I’d suggest a small transfer of consumption from the parasites above me to the parasites below.

            This will produce shrieks of horror from some — how can we ask Bezos to survive on less than 70 billion? How can we expect Jeff Bewkes to show up for work for less than 50 million PA? It is an interesting phenomena: money only makes workers indolent but it stimulates the rich to get even richer. And, since making rich people even richer is good for everyone, it is clear that working people are going to have to dig deeper. Prosperity thru poverty!

          • TarsTarkas says

            Look at what happened when the yacht tax was imposed back in the 1990’s. They not only didn’t collect what they expected they drove a lot of boatbuilders out business. Hard to collect tax on shuttered businesses.

      • Peter from Oz says

        ga gamba

        You are not quite right about VAT (also known as GST). Vat is added at each level before the consumeer, but at each level until the consumer, the business gets a credit for the VAT paid. Thus if a retail buys goods for $100 he is charged $20 VAT by the wholesaler. The retailer then sells the goods to a cutomer for $200 plus $40 VAT. In completing his VAT return the retailer will credit the $20 VAT paid to the wholesale against the $40 charged to the customer and pay $20 to the government.
        So VAT is just a straight sales tax, which is collected in part along each level of the supply chain, rather than at a single point in the chain. The overall amount of tax paid by the consumnet would be the same if VAT were collected only at the retail level.
        There is an argument that VAT style taxes hurt the poor more. The best way to deal with this is to ensure that basic goods (food, rent and energy) are not subject to VAT.
        The fact is that VAT is great revenue raiser, and the rich do pay more because they consume more.VAT is also far simpler than income tax.
        I would abolish income tax and make the government live only on VAT.

        • ga gamba says

          Yes, and applying the VAT refund not only reduces the amount available for freedom, you also need a group of administrators to manage, monitor, and enforce it, which adds to a bureaucracy. Further, you’ll have the cries of “unfair” from the usual anti-business group about the VAT refund.

          By removing basic goods from VAT, I’m doing even better. I already spend a lower percentage of my income on basic goods than the working and middle-class – and I spend little on durable goods because I already own those – and it’s been reduced further by these exemptions.

          Are people ignoring the cumulative effect of exemptions? As the special pleadings rise the government will expand them which reduces the takings whilst keeping the expense of the freedom dividend the same.

          Yes, VAT is a great revenue raiser, though there will be knock-on effect on some types of consumption, but it’s also very regressive. Generally, the left strongly opposes regressive taxation, so its advocacy of it is a remarkable development.

          If you want to aid poor people, the negative income tax is the way. Putting more money in my pocket is silly.

          • Ray Andrews says

            @ga gamba

            “I already spend a lower percentage of my income on basic goods than the working and middle-class”

            So what’s wrong with that? There is a certain natural progression there. When we are young we are producers, when old we are consumers. That’s not broken so I’d not try to fix it.

            “you also need a group of administrators to manage, monitor, and enforce it, which adds to a bureaucracy”

            But I dare say the size of that bureaucracy will be less than the current one.

            ” the negative income tax is the way”

            Possibly but income and life-style are not so closely linked I suspect. If someone has a large family then they might be effectively poor even tho their income is larger than some single person. Dunno, there is no magic bullet, but it seems to me that simply leaving essential products untaxed is the ultimate social program.

      • Aylwin says

        One more aspect of the potentially somewhat regressive nature of a sales tax – the wealthy are very adept at avoiding income tax (and dividend tax). It’s a lot harder for them to avoid sales taxes (try putting a ridiculously extravagant car through your business books)

        • Ray Andrews says

          @Aylwin

          Yup. Theoretical tax rates are one thing, but reality is that we live in loophole universe. As you say, sales tax is hard to avoid.

      • Marie Lutz says

        Governments constantly want more money and the VAT is a great way for them to get it. Corporations don’t pay for the VAT because they simply pass on their tax to consumers. Income taxes and sales taxes won’t fall (at least not after the VAT exists for a while and the promises to lower other taxes slowly dissipates). And the possibility that the rich will pay more of the VAT because they buy more things is irrelevant. The rich also pay more taxes in general. So what. Poor and middle class people buy TVs, sofas, beds and so on. Their expenses will go up. And there’s no reason at all to believe the money from the VAT will be earmarked for a universal basic income instead of, say, the military. I don’t know what the answer is to the question of how to support people with little or no incomes. But a VAT is a horrible attempt at a solution.

      • Matthew Hively says

        Even though it is a sales tax and those are inherently regressive, you would have to spend a whole heck of a lot of money each year on consumer goods to negate your extra cash from the UBI.
        If I get $12000 extra per year, and spend an extra $500 on sales taxes…. thats 100% fine by me. And thats before any market pressures adjust the prices of goods and services.
        Something tells me that the prices at retail are usually dictated more by trying to make the last number .99 than by costs further up the supply chain.
        Take for example the debate over $15 minimum wage. It was calculated that even if McDonalds passed 100% of the additional wage costs onto consumers, the price of a burger would increase by 30cents.
        Ok, I won’t buy cheese for my burger anymore… price increase negated. Done!

    • Daniel Pavlovic says

      It’s funny, I don’t see people talk like this when it comes to Military Industrial Complex spending or the money the financial sector captures through its position directly beneath the money-creating spigot that is the Federal Reserve. No, it’s only when the masses of non-Connected Americans who are struggling to get by are up for subsidies that your type comes out of the woodwork, incredulous and glib.

    • D.B. Cooper says

      Gentlemen,

      The VAT discussion was informative, no doubt, but I think we may need to reassess the major premise of this argument – job loss due to automation.

      In doing so, I think it may be instructive to consider a perennial favorite of mine, Henry Hazlitt’s, Economics in One Lesson. Here is a passage from the most relevant chapter, The Curse of Machinery. Hazlitt states,

      The belief that machines cause unemployment, when held with any logical consistency, leads to preposterous conclusions. Not only must we be causing unemployment with every technological improvement we make today, but primitive man must have started causing it with the first efforts he made to save himself from needless toil and sweat.

      There’s something to be said for common sense. For one, it’s terribly useful. If a second is needed, then you’ve obviously missed the first.

      • ga gamba says

        I’m inclined to believe this too. “Everyone is going to be unemployed!” is a scare tactic to rally the masses behind UBI. Further, UBI at $1000 is not going to cover the expenses of all those unemployed, if it comes to be. And the VAT won’t cover the cost, especially if exempted good are created and expand. Moreover, if children are excluded, then the poor with children will still require all the existing benefits, so there’s little gain to be found by eliminating bureaucracy because the programmes are still around. You’ll likely add to bureaucracy by hiring those to manage UBI and VAT collections and refunds.

        As I’ve already written, I’d make out very well if UBI were implemented, and even more so if the exemptions of basic necessities such as food were included because then I’m paying VAT on almost nothing. I’d be a maximiser, and I’m amongst the least deserving of this benefit.

        Focus on those who need aid and not those who want it.

        • D.B. Cooper says

          @ga gamba

          Moreover, if children are excluded, then the poor with children will still require all the existing benefits, so there’s little gain to be found by eliminating bureaucracy because the programmes are still around.

          If I may be so bold as to mention that I (along with my siblings) was one such beneficiary of social welfare programs. Being born into chronic poverty is a regrettable experience, I can assure you. Having said that, to think that an additional $1000 a month would’ve made a substantial difference in our lives – never mind thinking it would afford my mother an opportunity to start her own business – is to be ignorant of the realities of poverty and the mechanisms that produce it.

          While I don’t know much about Mr. Yang or his personal life, one thing I am fairly certain of is that he’s never spent much time being poor, nor does he appear to have known many people who have. I’m sure he’s a nice guy, and he may even make a great president, if given the opportunity; but his lack of insight on this particular subject is profound.

          Considering the degree to which his campaign centers around the subject, you could be forgiven for thinking that Yang has at least once, stopped to ponder the question of why it is that an uncomfortable percentage of poor people who happen to win the lottery, also happen to go broke and end up poor, again, in relatively short order. You see, the benefit of considering this question is that lottery winnings aren’t bound by a disincentive structure like conditional benefits (welfare programs) are. So, why is it that so many people go broke after winning the lottery?

          In my estimation, it’s likely a multitude of reasons, but chief among them is that, in general, the people who play the lottery, don’t play because they’re poor; but rather, they’re poor because they’re bad with money as evidenced by the fact that they play the lottery.

          In other words, people who don’t have money aren’t going to suddenly become financially prudent once they do have money. Instead, maybe we should consider that the reason they don’t have money is due to the fact that they’re not financially prudent in the first place, nor have they ever been, nor is there any reason to suspect they ever will be. Is this the case for everyone who’s poor? No, of course not. But it’s also not the case that there’s a Warren Buffet just waiting to jump out of every welfare queen who’s currently on the dole.

          So, let’s be honest about the situation we’re dealing with here. Half the people in society are below average, by definition, in all the ways that matter in a competitive landscape; and giving those people an additional $1000 a month is not going to change the fact that they couldn’t grasp the finer details of consumer math back in 12th grade. I’m sorry to be so blunt about it, but we need to deal with reality as it is, not as we wish it to be.

          • Ray Andrews says

            @D.B. Cooper

            “In other words, people who don’t have money aren’t going to suddenly become financially prudent once they do have money.”

            So, when you were poor did you fit the stereotype of incompetence that you painted so well? My mother and father were both born into poverty, but they were and remained the most financially prudent people on the planet. There is no doubt that the stereotype you reference is at least partially true, but my case would be that the welfare-poverty trap is what makes it true. I married a ‘welfare girl’, I thought I could lift her into a better life the way my dad did for my mum. Nope. The welfare mentality permeated her. Was she genetically defective? Nope, it’s just the way she was brought up. So change the environment and you change the mentality. Bring up a generation with the UBI mentality rather than the welfare mentality, and you have people who believe in a free lunch … but a free lunch that does not get bigger the more food you waste. It will take a generation or two to ‘work’ of course, but the sooner we start the sooner we get there.

          • D.B. Cooper says

            Ray

            So, when you were poor did you fit the stereotype of incompetence that you painted so well?

            Unfortunately, I would have to say that, yes, I was; but I would also like to believe that that is no longer the case. It’s also important to mention that most any claim that I make is in reference to a ‘central tendency’ statistic. Maybe I should’ve chose my words more careful, but I obviously don’t believe that any one thing is true for everyone (within a group) under all conditions.

            There’s more to say on this, of course, but I do stand by my claim that, on average, there would be little social value in giving the poor (who are already on welfare) an extra $1000 dollars a month. As a general rule, they will not be nearly as productive with that $1000 as would the person you (the gov’t) originally took it from.

      • Ray Andrews says

        @D.B. Cooper

        That’s held true from the stone age till now, but some say the coming years really will be different. The reason being that expansion of the economy is soon to become impossible — and is already cancerous. If machines help workers make more stuff, then that only means we have more stuff, which until a few decades ago was almost surely a very good thing. But we already have too much stuff and increasing our demand for more raw materials to turn into stuff is no longer practicable. So this time it will be different.

        • D.B. Cooper says

          Ray

          I must respectfully disagree. Not because I want to, but because basic economic theory compels me to. Rather than getting too far into the weeds on this, simply ask yourself, has it ever been the case that you wanted more (“increasing our demand”) of something you already have too much of (“already have too much stuff”)? That doesn’t make sense economically or otherwise. You also have to consider marginal production costs, which will drastically lower production numbers, if or when, the labor market contracts (83 percent of jobs paying less than $20 an hour will be obsolete).

    • @ga gamba

      I think you’re right , this is Stalinist, really, how can any adult live on $250 a week, so anyone who knows historically how atrocities happened has to pause. We don’t all live in single rooms. And what will the new cost of a toothbrush become?

      One of our prime ministers said no child would ever live in poverty.

      He had a noble plan, every “stay at home mother ”
      Whether she be single or married, would receive the same amount of money to raise her child. I was married with a three month old, I adored him and still do.

      Within five years, we had “The recession we had to have .”

      Zero employment, shops closed down everywhere, when people get money for nothing it becomes too expensive to hire staff , jobs dry up, people are surviving, but not spending. If you can’t afford food you don’t go to the hairdresser ? They were the first to close shops. Barter became the norm.

      People sold furniture and walked away from their houses. I knew several people who said if you were really needed a house. You had to live in a tent for 28 days and you got first priority. That didn’t happen.

      That was from a minor well meant correction to inequality ?

      I still think women with no income, should be paid the same to raise to raise their children, as the subsidy payments towards daycare, for women who don’t work, because they are not unpartnered or unmarried .

    • Martin says

      “Freedom Dividend”

      “Dreamer”

      “Affirmative Action”

      “Religion of Peace”

      “Antifa(scists)”

      Up is down and down is up. These words seem to come from some Leftist version of Orwell’s 1984.

    • Dwight Jones says

      Friedman had it right – a negative income tax – NIT.
      It’s tax reform, not UBI, Only taxpayers with zero to low income are credited.

      Representing it as ‘free money’ for everyone is a disservice to the cause.

    • Optional says

      Sane people said this was economically fine but psychologically profoundly stupid.
      So Sweden went and tried it – because wasting money is what socialist do.
      And it was such a massive failure Sweden terminated the experiment early.
      Because the sane people were always right. Because it was obvious from the very start.

      Guess what?
      Recipients were well drugged and well whored – but much colder and on the point of starving and (shock upon shock) still needed exactly all the same social services on top
      of their free money.

      Rats will happily forgo food for a serotonin hit – until they die.
      It seems Sweden basically just ran that lab experiment on humans.
      And the results are identical. Because of biology. Economics be damned.

      I am sure the next socialist will just tell me that if just they (in their arrogance and
      superiority complex) were in charge – it would just work “this time”.
      They are full of ^%&^.
      They always are.
      When we ever learn?

      • Charleen Larson says

        “When we ever learn?”

        Thank you.

  2. So who will work? Taxation would have to be so high to enable this program, most people in low paid jobs won’t work or pay taxes .

    The Roman Empire tried this, it didn’t end well.

    • dan says

      UBI sounds great on paper, but in reality I don’t think it would work, and would result in less people working. UBI would cause more people to rely on the government and decrease incentives to work. A lot of hard-working UBI proponents think, well if I got an extra $1000 per month I would do this and that. They underestimate how easy it is to do nothing, and after doing nothing for a while (years), how hard it is to start working.

      • Craig WIllms says

        @dan
        I’m not sold on UBI for the same reasons you stated. My take on human nature is often negative because having been alive for over 5 decades I’ve seen human nature.

        However, I could be wrong. There I said it.

        The study done in Manitoba 40 years ago during tough times was slightly more positive than I would’ve thought.The playing field was a largely homogeneous society and I believe that had some bearing on the outcome.(to be kept in mind) The results showed that the extra income helped reduce stress, which in some cases allowed new mothers to stay at home a little longer, reducing family stress, possibly saving families extra medical costs and other side benefits not directly tied to money. Others could upgrade their cars/trucks to reliable vehicles reducing missed work days and repair costs (and less stress). Hospitalizations went down significantly, again probably due to less stress.

        Teen age boys were the main group that actually worked significantly less, well that’s certainly a surprise!!! While far from conclusive the experiment was not without positives. I’m going to try not being so negative about such ideas.

    • Ray Andrews says

      @Anita

      Yes, they will work. The UBI should be enough to keep you from starving. If you want a car or the latest i-pad or designer clothes, you have to work for it, and almost everyone does so almost everyone will. Most of the plebes are not as lazy as is sometimes supposed. They want to get ahead. UBI let’s them move away from a welfare mentality without the hit of having benefits removed.

      BTW UBI also would/could obviate most employment standards and protections. No need for a bureaucracy to make sure than I can’t fire a poor employee — because that poor employee needs the job — since that poor employee has his UBI anyway. So fire anyone you don’t like. Basically, as a century ago, if you don’t want to work here, quit. If I don’t want to pay you, you’re gone. Think what that would do to unencumber the economy?

      • david of Kirkland says

        Until people start having babies to get another $1000. If I got a “spouse” and had “3 children” we’d get $5000/month. We ain’t gonna work.

          • Bill says

            That’ll be GREAT! Until the basement dwellers realize…hey, Warren Buffett got his check for $1000 too! So then it will no longer be “every citizen” but simply a way for Caesar to buy popularity by throwing bread into the stands while the gladiators fight.

        • Ray Andrews says

          @david of Kirkland

          Nope. Sorry, UBI for over 18. Don’t have babies if you can’t afford them.

          • ga gamba says

            And by doing that you have to keep the social benefits bureaucracy up and running for the children. So, no savings there.

          • @ Ray Andrews

            Don’t make comments like that until you listen to him talk on Joe Rogan , to save the country from a 70’s Convoy event, it’s now an emergency to protect the country, from military trained truck drivers.

            How? By paying $1000 per month for anyone who Won’t support this robot replacement, whilst deflecting the obvious demographic replacement?

            Being overwhelmed by people who hate the working class, who are forced to live cheek by jowl, with hatred, he’s dog whistling. But not to US citizens. He’s telling the barbarians (using the Roman metaphor) that he’s got their back against US citizens.

      • Farris says

        @Ray

        If you up your child’s allowance do you believe that will incentivize him/her to find a job and not play video games? If you wouldn’t work at home why would it work elsewhere?

      • OWG says

        @ Ray $1000 per month won’t keep you from starving. That’s equal to $6.25 per hour for 40 hour per week, four week month. It wouldn’t take very long before it would be $2400 per month or the equivalent of $15 per hour. How is UBI not welfare?

        As for influencing employer decisions, only a very few of them worry about how the terminated employee is going to survive. And most states are employment at will, so employees have no claim on the job but might qualify for unemployment insurance unless fired “for cause”. UI amount varies but is about $1000 month plus or minus 20%.

        When are people going to wake up to the fact that if you borrow money for running expenses that don’t provide a monetary return, you will eventually run out of money.

        • Ray Andrews says

          @OWG

          ” $1000 per month won’t keep you from starving.”

          How big the UBI should be is of course entirely debatable. IMHO it should be sufficient to keep you alive and living under a roof. Oh, and forget about UI, UBI *is* your UI.

      • @ Ray Andrews

        It’s funny I was reading about the collapse of the Roman Empire, whilst listening to this guy on Joe Rogan a couple of days ago .

        It seems he’d taken the soon to fall Empire as a template. Give every citizen a large allowance of wine, olive oil, bread and pickled pork.

        They also denied this to non-citizens, they had to work. They did not keep their city walls tight and strong. People within the city gates, opened the gates on several occasions .

        They were also adapting to people who had religious beliefs adverse to their empire .

        I’ve been reading about this event, on and off ,since I was a primary school child.

        The story continues to get more nuanced, but the conclusion never changes?

        • Ray Andrews says

          @Anita

          Sure, lessons to be learned, but at the same time, overly simplistic narratives are part of the problem, not the solution. As I recall my history, the plebes had their grain ration for centuries before Rome fell. I would say Rome rotted out from the top down, not from the bottom up.

        • TarsTarkas says

          Feudalism was the end stage of the Western Roman Empire. Taxation became so bad (if you couldn’t pay in cash, chattel and children would do) that people literally started selling themselves to local landowners wealthy enough to hire mercenaries to defend themselves against the tax collectors and their ever-increasing military contingents. The Empire had to disarm the people to keep the tax collectors alive. Meanwhile the real job of the Imperial government, security, went to hell because the generals either started grabbing all they could or aimed for the imperial throne, letting the mostly German barbarians, pushed into the Empire by the Huns, roam all over the place, looting, destroying, and killing en masse. The Western Empire fell because there was no one left who was willing to defend it.

          ‘I breathe, therefore I am owed a living’ is not a blueprint for the continued success of any society.

  3. E. Olson says

    Is the article serious, because the holes in the argument are so large you could fly a 747 through them. 80+% of the homeless are mentally ill and/or substance abusers. How much of that free money will go to drugs and alcohol? If 30% of people will be automated out of work, will the $12,000 annual UBI be enough to get today’s homeless and tomorrow’s automation victims back on their feet with proper shelter, food, and medical care? Today’s welfare benefits average something like $20-30,000 annually, and in places like NYC the public housing programs alone have rent equivalent values of up to $100,000 annually, do you think people getting $20 to $100,000 in welfare benefits today will be happy to have it all replaced by $12,000 UBI per year? Someone making $20 per hour in full-time work will make $40,000+ per year, will they be happy to get $12,000 UBI in return for losing their job to automation? If you add a substantial VAT it will lead to higher prices on the order of the tax, because companies don’t pay taxes, people do. How far will the $12,000 annual UBI go when prices on everything are increased by the 26% VAT (same as Sweden)?

    The US budget is $4 trillion per year, and about 20-25% is deficit spending. Please tell us how your plan will balance the budget and not add to current deficits? Will you be replacing all the current redistribution programs (i.e. Social Security, Medicare, Medicaid, Food Stamps, VA benefits, government pensions, farm subsidies, etc), that comprise about 67% of the current budget with your $12,000 per year UBI? Will this survive court challenges? What will be the sources of government income to replace all the lost income tax revenues, lost payroll tax revenues when 65% of the population are no longer working and subject to tax (65% = 30% out of work due to automation + 35% already not working)? How much VAT is likely to be generated when 65% of the population are making $12,000 per year?

    You gave the example of Alaska as a shining UBI success story. Why didn’t you mention the recent failed UBI experiment in Finland?

    • Aux says

      First, the recent experiment in Finland wasn’t UBI and it didn’t fail, it was canceled.

      Second, Yang’s plan would replace the other social programs. To receive the dividend you would voluntarily give up your right to participate in them.

      • E. Olson says

        Why would the Finnish UBI program (which is what they call it) be cancelled if it was a success? Government programs are almost never cancelled no matter how terrible they perform, so why would this one be cancelled?

        So if I am employed and not currently getting any welfare, I can sign up for UBI and get an extra $12K per year, but if I am already getting $30K in welfare programs I can skip the UBI $12K and continue with my food stamps, medicaid, public housing? Sounds like a lot of people will start getting extra money, and all those already on the public dole will continue as before – how does that save any money?

        https://nordic.businessinsider.com/Finland-is-killing-its-world-famous-basic-income-experiment–/

      • ga gamba says

        Second, Yang’s plan would replace the other social programs.

        Erm… which ones? Medicare? Social security? SS is 25% of the US fed budget, and people have been contributing it their entire working lives, so they already earned that. Is Yang going to do a hocus pocus and declare SS payments to recipients are part of the freedom dividend?Medicare is about 20% of the federal budget. So, what else will you eliminate? SNAP? Housing assistance?

        325,000,000 people x $12,000 = 3.9e+12. Great! A number so large we’re now using scientific notation. It’s $4 trillion dollars. Excluding SS and Medicare, is the spending on social programs $4 trillion? No, it isn’t.

        Do the sums, people.

        To receive the dividend you would voluntarily give up your right to participate in them.

        Hold on, kemosabe. If we’re going to end the social programs and make the administrators redundant to save on that payroll and non-pay benefit spending, how are the programmes going to exist and be managed for those who decide to stay enrolled?

        Surprise! Those programmes… they’re not going to be discontinued.

        After a few months of many freedom dividend recipients spending their money of flat panels and play stations, they’ll realise they didn’t think about their children when social services comes banging on their door. Brace yourselves for headlines like this: ‘Who’s gonna take care of them?’ asks marginalised parents. ‘White supremacy didn’t prepare to me to budget my freedom dividend and now my kids are naked and hungry.’

        • Thomas Danforth says

          “and now my kids are naked and hungry”

          … hmm, yummy :^)

      • Asdf says

        Most welfare are state benefits. The federal government wouldn’t be able to outlaw state welfare benefits even if you opt-in.

        And what welfare are we talking about? I assume cash benefits…but what about tuition assistance? Health benefits? Etc. What’s qualifies as going away if you opt out?

        I’m not immune to the call of a UBI, but I think these are questions to answer.

        Similar questions about a VAT. People say there will end exclusions, it on what. Is my Honda CR-V to high end to be excluded? What about Whole Foods? Are we ready for bureaucrats determining what is and isn’t subject to a VAT? I’m not against a VAT, but the idea that it won’t mean substantial price increases for goods most people need is absurd.

        • Ray Andrews says

          @Asdf

          ” Are we ready for bureaucrats determining what is and isn’t subject to a VAT?”

          That has been the case here in Canada for decades. It isn’t difficult. In an economy where almost everything is produced in bulk, calculating VAT is about the same as the health people checking on what’s in various foods which are also mass produced.

      • DiamondLil says

        Thanks for the link, JP! Most interesting and changes everything I thought I knew out the Finland experiment.

        • Ray Andrews says

          Yes, thanks, that was most clarifying. Spin doctors everywhere, nice to get some facts.

    • “Today’s welfare benefits average something like $20-30,000 annually, and in places like NYC the public housing programs alone have rent equivalent values of up to $100,000”

      Welfare quality of life, cost of living shopping. I kid you not. Anchor children talk too much. Many will tell us they moved from California to flyover country so welfare would go further. Evidently, it’s a thing.

    • ga gamba says

      The US budget is $4 trillion per year

      And the states’ budget are about another $4 trillion combined.

      Yes, Alaska pays a dividend because it has revenue. Norway could do the same with Statoil’s income, but it decided to salt that away in a national sovereign wealth fund.

      And what revenue does the US government have that’s in excess of expenses? None.

      It could go into the defence business and charge Japan, Korea, and NATO for the defence services provided, but, of course, they’d have to agree.

      • Farris says

        Same old tired idea of spending to create prosperity.

    • ga gamba says

      will the $12,000 annual UBI be enough to get today’s homeless and tomorrow’s automation victims back on their feet with proper shelter, food, and medical care?

      You export them to someplace cheap to live, such as Haiti, with the guarantee they’ll continue to receive their freedom dollars.

      It would be a boon to the Haitian economy until it becomes too expensive for the freedom dollar recipients to live there. Then export them to the next Shitholistan.

    • Ray Andrews says

      @E. Olson

      You seem to be arguing both sides of the ledger at the same time. One the one hand UBI would be too expensive, on the other hand, it would reduce overall payments to recipients.

      “when prices on everything are increased by the 26% VAT”

      Prices on everything would not go up. Canada has sales tax and just about everything you buy in the dollar store is exempt. But the 200′ yacht might not be.

      “when 65% of the population are no longer working”

      But if productivity remains, then wealth remains. Economics is easy to understand if you just zoom out and see the entire thing in one view: Workers produce things. Some of that production they keep, and the rest they give to various classes of parasites: outright thieves, various classes of lords and kings in the old days, various classes of capitalists and economic renters and bosses nowadays. Now, the difficulty is that the latter are usually more or less useful as well as being parasites. But, they do suck as much as they can. They deserve some of the wealth that they siphon off, but they are also happy to take much more. They will inevitably say that they need much more. Much more, and it’s their love of the workers that make them take it, have no doubt about that.

      Bottom line is that we have what the workers (and whatever machines and AI and whatever else) produce. Then we decide how much goes to parasites. Oh! I forgot the welfare parasites, yes they suck too. What is new is the possibility that most people will end up to some degree as ‘welfare parasites’ due to lack of work, and due to no fault of their own. Thus it is time to destigmatize being unemployed. Tho I myself would hope for work-sharing so that most people are still working at least part time.

      • asdf says

        A whole lot more than just 200′ yachts end up being subject to the VAT. Let’s be completely honest about how VATs work where they are. Lots of things that working and middle class people consume that aren’t luxuries are subject to VATs. Anyone that has spent time in countries with high VATs have notices the high prices.

        • ga gamba says

          Yes, this idea that’ll be the buyers of yachts, Ferraris, and Learjets paying for UBI is wrong headed.

          All this data, of both number and value, is findable. In the US about large 30,000 watercraft were sold in 2017. Not all were yachts, but most were. For the sake of understanding, a yacht is vessel that provides many of the same attributes of a home. It has a galley (kitchen), a head (toilet w/ shower), and a closed cabin (a bedroom) – it has to have ample quarters and facilities to accommodate people on overnight journeys. Watercraft less than 27′ commonly don’t have the space to provide all this. So, of the 30,000 large watercraft sold, 21,500 were most likely yachts. Though yachting is a rich man’s interest, 62 per cent of boat owners have a household income less than $100,000. This includes small sailboats, personal watercraft like jetskis, small powerboats, and the like. Middle-class people are more price sensitive than the rich. And if 20% VAT is applied to replacement rigging, sails, marina fees, engine pairs and repairs, and anything else associated with the hobby, and it will be, this may be too costly for some of the middle-class people.

          Annual US retail sales of new boats (of all types), marine engines, and marine accessories totaled $20.1 billion in 2017. Apply 20% VAT on that and it’s $4 billion, or 0.1% of the sum needed for freedom dollars.

          The business jet market in 2017 worldwide was $18 billion on 676 units sold. The US comprised 63.8% of sales, which is $11.5 billion – some are purchased by government entities, and they don’t pay tax. Apply your VAT and it’s 2.3 billion, about 0.06 per cent of the freedom dollars.

          Ray is correct that every little bit counts, but we’re rapidly running out of the high-value items bought by the rich to tax to finance our hopes and dreams.

          In 2017, the US market for luxury goods reached around $179 billion (that’s everything from yachts to jets, watches to leather handbags as well as luxury hospitality). A 20% VAT on that sum is $36 billion. That’s about one per cent of the freedom dollars.

          That other 99% is going to come from somewhere? Who else is left?

      • E. Olson says

        Ray – the dirty secret of Scandinavia that Bernie won’t tell you is that the middle class pay all the taxes. A high VAT on only “rich” products doesn’t raise near enough money to feed a vast welfare state, so Sweden puts a 26% VAT on just about everything.

        UBI won’t work because the politicians won’t have the guts to fire the huge welfare bureaucracies, so we will end up with UBI + SS + medicare/medicaid + housing assistance + veterans benefits + food stamps + etc. The nice article about the Finland UBI said as much, as the politicians couldn’t/wouldn’t let a true experiment play out to see how it would work, so most of the UBI volunteers kept most of their usual welfare benefits at the same time. The other things is most poor people can’t handle money, which is why they are poor. Poor people are the biggest buyers of alcohol, drugs, junk food, lottery tickets, cigarettes – so giving them more cash will just mean they put more junk up their nose and buy more losing lottery tickets, and then well meaning Lefties will say we need to do something – we can’t just let them starve because they blew through all the money we gave them. And any welfare programs that were shut down, will be restarted.

        Giving people free stuff will only possibly work if everyone is prepared to live and die with the consequences. Promise me that you are prepared to let junkies die if they spend all their UBI on drugs, and let gambling addicts (and their kids) starve if they spend all their UBI on lottery tickets, and we can proceed with large scale experiments to see how UBI without any other welfare works.

        • Ray Andrews says

          @E. Olson

          I’m not saying it would be easy or seamless.

          “A high VAT on only “rich” products doesn’t raise near enough money to feed a vast welfare state, so Sweden puts a 26% VAT on just about everything.”

          Sure. As Ga pointed out, luxury taxes alone can’t do it. Ok, VAT on all but necessities. But good bye business taxes, maybe even good bye income taxes?

          “the politicians won’t have the guts to fire the huge welfare bureaucracies”

          No point in starting what you aren’t prepared to finish. UBI means deep changes.

          “most poor people can’t handle money, which is why they are poor”

          That’s at least partly true of course. But it can be exaggerated. The essential breaker of people’s economic virtue is the way the government subsidizes irresponsibility. What if irresponsible behavior paid no dividend?

          ” if everyone is prepared to live and die with the consequences. Promise me that you are prepared to let junkies die if they spend all their UBI on drugs, and let gambling addicts (and their kids) starve if they spend all their UBI on lottery tickets”

          There would have to be one further lower safety net for those who can’t even manage themselves with UBI, but it would be rather harsh, you would not want to go there. You are basically declared an incompetent, made a ward of the state, lose all ‘rights’, and live in a barracks. Kids adopted out. No drugs to be had. Folks would be begging for another chance shortly.

          • Bill says

            I think the courts would find your final paragraph there a bit unConstitutional. You are essentially saying debtors prison which rapidly becomes…tada…slavery! As it is now you have a segment of the prison population who seek imprisonment for the benefits…3 hots and a cot + medical and dental. Can you imagine how the prisons would bloat? Essentially, that is what you advocate with the declared incompetent, made a ward, live in barracks, kids given to DFACs….

      • Farris says

        @Ray

        If $1000 UBI per month is going to end SJWs, affirmative action, hunger, the minimum wage, statism, reduce the numbers of working poor, welfare and so on, why stop at $1000 per month? Think would $10,000 per month could do?
        Throwing money at problems has worked so well in the past. And when it hasn’t worked, it is only because the government didn’t throw enough. This is the latest incarnation of the War on Poverty.

        • Ray Andrews says

          @Farris

          Come on Farris! We’re looking for a balance point. Of course you can take it to absurdity. IMHO, overall the government is already throwing too much money at poverty, but doing it stupidly. The mentality now is that the more you need the more you get — so, naturally, increase your needs and minimize your own capabilities. As Marx so famously said: “From each according to his ability, to each according to his needs” … so (soooprise!) abilities go down and needs go up. UBI says: “We won’t see you starve, but this is all you’re getting. Use it well cuz there ain’t no mo.”

      • Bill says

        Incorrect. If all this AI and automation is driver for UBI it means there are fewer jobs. After all, if you didn’t tax it the money would be going to labor without the reduction from the government pass through. Velocity of money.

        If they do have jobs, then +12k/ea is inflationary and it isn’t truly +12k since this regressive scheme sees that 12k having lower buying power. Why not just make the VAT 50% and make UBI = 24k/year? Or 100k/year? It’s the same thing. It’s just a paper gain which ignores the inflationary effect, the same as minimum wage being set centrally.

      • Sean says

        @RAY
        Actually, most items in a dollar store in Canada are subject to GST. As a general rule, only food “ingredients” such as most of those in a supermarket, prescription drugs, farm equipment, medical devices and services, educational services and financial services are exempt.

        Even most of the snacks in dollar stores are considered prepared and thus subject to GST.

        • Ray Andrews says

          @Sean

          Could be. I honestly don’t check, I just know there are exemptions here and there. Point being that such things can be done, and they might even be done right, so as to help the genuinely poor.

          • Sean says

            I work in government as an accountant. The GST rules are a nightmare (as most taxes are). Despite being introduced in Canada in 1991 there is still much on going litigation around the rules.
            The simplest and most cost effective way to bring in a sales tax is to make it apply to everything and then increase the welfare to the poorest to compensate for the additional cost.
            Unfortunately, democratic governments being what they are, they end up making exceptions for their chosen target groups and the best lobbyists. This is one reason the fees to buy and sell shares is exempt from GST even though people who engage in it are hardly the poorest.
            My experience has told me that politicians are often the least qualified to run a province or country.
            One example of the stupidity is the government was bringing in a new program. An MP of the party announced how the program would affect a certain group of people. This MP was a member of the ruling party and was wrong. I know this because I was involved in developing the program. However, the ruling party didn’t want the politician to be wrong so some convoluted rules were brought in to make this errant MP’s pronouncement correct.

          • Ray Andrews says

            @Sean

            Then your opinion caries authority.

            “The GST rules are a nightmare (as most taxes are).”

            That’s the thing, we aren’t comparing a new nightmare to an old utopia, we’re comparing an adjustment of existing nightmares to maybe make things a bit better. But the GST mechanisms are at least already in place. Removing other taxes and also various social programs thus has to be a net gain.

    • bumble bee says

      I agree this guy is going no where too. He’s just another snake oil salesman selling something that is not going to work no matter how you slice it.

      First of all $1000 is not even close enough for people to survive on. If so many jobs are going away, where does he think people are going to work to supplement their income?

      Another issue never discussed is how is the economy going to sustain itself when no one can afford to buy anything. It will spiral down into no business, no income, no jobs for anyone. What he is really doing is paving the way for people to accept this automation/AI and throwing people crumbs.

      He’s just another pathetic opportunist whose half-baked idea to solve what he calls the inevitable future which sounds more dystopian than utopian.

    • @ E. Olson.

      Of course not! He’s just a non white male. Who has
      done an analysis of Trumps success, and has come up with a dystopian / fantastic solution to save every American?

      Still out of touch, how will $250, a week help a man pay child support ect.,

      Not to mention, here children on welfare, at sixteen get there payment put into their own bank account not their mothers?

      Amoung the working class in my community this drove lots of children to leave home, just to have what seemed like a lot of money at 16.

      They tended to turn back, bedraggled, tail between their legs, and very hungry after a week or two.

      I won’t say “working class “, but rather “welfare class”

      The children (15-16, and younger) who had a hundred dollars + a week. They were the coolest kids in highschool?

      They vote too!

      Votes For Sale.

  4. Sandra says

    I had the idea this time to read the comments first. It spared me from reading the article.
    Thank you to all who posted. Your comments reflect the content of the article as they present an intelligent criticism.
    Quillette, you can do better!

    • David K says

      They didn’t spare you from reading the article, you just chose not to read it in order to have your biases confirmed by reading the criticisms of it. I recommend reading the article before writing comments criticizing said article.

    • DiamondLil says

      Read the article at JP’s link. Brings a lot more light to the topic that this article or even these comments.

    • ga gamba says

      Quillette, you can do better!

      Unfair complaint, I think. Quillette allows all views to be presented. Even bad ones.

  5. Sandra says

    Did my comment just get censored?
    Seriously?

    • Sandra says

      Apparently, it didn’t. Thank you, Quillette.

  6. dan says

    UBI is another way of saying we don’t need more low skilled labor. The US recorded 76000 illegal border crossings in February which leads one to think the US is adding 500,000 to 1 million more low skilled workers a year. Every UBI article I see discusses the coming wave of automation for low skilled jobs, but never discusses limiting the supply of additional low skilled workers. Also it is unclear whether UBI would further encourage border crossings through obtaining some of the UBI benefits directly or through some legal low skilled workers dropping out of the labor force after getting their check.

    • ga gamba says

      You’re darn tootin’ right UBI will be awarded to the immigrants, legal and not, too. “What about their freedom?”

      What a massive magnet that’ll be.

      When will the honest Democratic presidential candidate appear and declare: “Yep, we’re here to destroy the country.”

    • Lert345 says

      Dan

      As I recall, some leftist elements have suggested free IUDs to limit low skill low wage workers.

  7. Steve says

    UBI probably makes sense considering where we are headed but his proposed
    “instituting digital social credits as a local currency.” is just plain scary. A social FICO score?

    • Jackson Howard says

      Sounds a lot like the new chinese mass surveillance powered social score.

      But let’s be clear here : the more the two bottom quintiles lose on income and jobs, the more such ideas will get traction. Low skill workers are getting butchered by :

      1. Deliberately masked inflation
      2. Loss of jobs from automation
      3. Wage downward pressure from immigration
      4. Wages sitting bellow poverty level

      At some point it’ll give. A top heavy society tends to topple. The US is now back to the 1920s levels of income and wealth inequality. When the current asset bubble pops it will not be a pretty sight.

  8. Nate says

    Andrew would convince me if the entire mandatory spending was replaced by UBI. If his $1000 per person was replaced with a negative income tax it could probably stretch even further. However, with only an $800 billion reduction in mandatory spending per his calculation, I am not convinced. It sounds like a lot of big “ifs” have to happen for this to even have a chance of working, and given the effectiveness of Murphy’s Law when applied to government, I’m going to have to take a hard pass on his proposal.

  9. DNY says

    The most interesting thing about UBI is that, at least in intellectual circles, it has as much currency on the right as on the left. The article begins with a quote from Milton Friedman in support of a negative income tax, which is actually a half-way step on the road to a UBI. One of the Austrian school economists (I forget whether it was Hayek or vonMises) observed that a UBI was the only income transfer program that does not create perverse incentives (means-tested programs encourage having small enough means to qualify, since earning more effectively creates a confiscatory tax rate on the poor). Finally Charles Murray has written an analysis in support of replacing all government wealth transfer programs (at all levels, federal, state and local) in the book In Our Hands: A Plan to Replace the Welfare State, which argues that if it really replaced *all* other wealth transfer programs a UBI of $10K/year plus $3K that would be required to be spent on catastrophic health insurance to all citizens 21 years or older would be *cheaper* than the current system. The savings would come largely from abolishing the bureaucracies that oversee all the means-tested programs — and yes, everyone gets the payments, even billionaires, regardless of other income, but they are taxable income, so they are “clawed back” at the recipient’s top marginal tax rate.

    It may not be necessary now, but we’d better be thinking about it — continuing the current model of you have to work to eat and have a home won’t work will not be feasible, unless the elite decide to commit genocide, once advances in AI and robotics make it cheaper and more reliable for robots and AI systems to do not only all jobs that can be reliably done by persons of average intelligence or below (yes, including picking soft fruit and prostitution), but a goodly number of those requiring significantly more intelligence (radiologists are already obsolete and I think if Watson was turned loose on the data of American law for a few weeks, I’d rather have Watson draw up my contracts than the best lawyer in practice).

    But when we do make the shift, really I hope it’s the right that leads the way. The left always makes a hash of everything economic (well, there is an exception — I have tremendous respect for Yannis Varoufakis’s view on economics, but it’s America we’re talking about not Greece). I feel certain they’d come up with a way of combining introduction of a UBI with some sort of attack on capital which would destroy the economic foundation needed to have a UBI.

    • Farris says

      @DNY

      Here is the turd in the punch bowl.

      “The savings would come largely from abolishing the bureaucracies that oversee all the means-tested programs…”

      How many bureaucracies have been abolished in the last 100 years?

      • ga gamba says

        In the US, the Department of Energy. Reagan had the guts to do so, but it had only existed since ’73, so not many constituents around to fight for it.

        The Department of Education ought to be axed because education is a local affair. It’s too powerful though; even Reagan couldn’t kill it though he wanted to.

      • Ray Andrews says

        @Farris

        Few, but perhaps it’s time we started.

        • Farris says

          @Ray
          “perhaps”

          Therein lies the problem. With spending plans the cuts are always to follow but some how never manage to materialize. And forget about the difficult cuts, recall the great wailing and gnashing of teeth when it was proposed to cut funding for the Cowboy Poetry Festival?

          • Ray Andrews says

            @Farris

            Yabut your argument is that we can’t do anything because we never have. But we do tho — we did cut the funding for the CPF. We can make changes and UBI could be the key to a cascade of changes. What I like is that righties and lefties can both see the benefits of UBI. I think it’s a fantastic idea, it would cut the … I was going to say ‘nuts’ off the SJW’s but that hardly works … it would knock Victim engineering off it’s foundations — white, black, green … here’s your UBI cheque, now get lost. If you’re still feeling sorry for yourself cash the cheque and buy some tissues for your hot tears. Government interventionism basically comes down to that one payment.

    • ga gamba says

      The article begins with a quote from Milton Friedman in support of a negative income tax, which is actually a half-way step on the road to a UBI.

      I wouldn’t call it a halfway step. Far from it, actually. First, and most importantly, Friedman’s proposal wasn’t universal. It was limited to those who fall below the tax-exemption line, and as your normal income increases your subsidy income decreases.

      And example:
      Income tax rate is 50%
      The tax exemption is $30,000. The difference between this and a sum less than it is negative income. A percent of the negative income is provided as a subsidy.
      The subsidy rate is 50%.
      A person earning $0 would receive $15k. (30,000 – 0) x 0.5 = 15000
      A person earning $20,000 would receive $5k. (30,000 – 20,000) x 0.5 = 5000
      A person earning $100,000 would receive nothing and pay $35k in tax. (30,000 – 100,000) x 0.5 equals = -35,000

      The tax and subsidy rates as well as the tax exemption sum provided are examples and not a set proposal.

      BTW, the US national debt stands presently at $22.1 trillion and increases by $45,000 per second.
      Son of BTW, don’t forget your Social Security shortfall. Depending on who’s calculating it, it’s estimated to be between $12.5 and $21.4 trillion.

      • Farris says

        @Ray

        “here’s your UBI cheque, now get lost. If you’re still feeling sorry for yourself cash the cheque and buy some tissues for your hot tears. Government interventionism basically comes down to that one payment.”

        With that statement you just created a SJW constituency.

        • Ray Andrews says

          @Farris

          Sorry, please explain. Seems to me I’d do the opposite. All folks get the UBI so anyone for whom special coddling by the Warriors is being demanded is out of luck. Victimhood and Identity would cease to matter very much. Abolish affirmative action, and Victimhood would not be a drum worth beating at all.

          • Farris says

            “All folks get the UBI so anyone for whom special coddling by the Warriors is being demanded is out of luck. Victimhood and Identity would cease to matter very much. Abolish affirmative action, and Victimhood would not be a drum worth beating at all.”

            People don’t stop self pity because it is commanded. Generally they double down and SJWs will exploit that resentment to create a constituency. Currently there is welfare, SNAP, free education and countless other social programs as well as SJWs. SJWs will object that all persons being paid the same UBI is unfair. Recently a SJW made a speech explaining that treating all persons the same is evidence of White Privilege.

          • Ray Andrews says

            @Farris

            “SJWs will object that all persons being paid the same ”

            Gotcha. Sure, they’ll try to keep their ball rolling, but we are stopping it dead. The whole woke world will oppose UBI, as will the entire bureaucracy. Lock and load.

    • asdf says

      Charles Murray paid for it in part by raiding SS/Medicare. Also, a catastrophic policy is going to have a deductible big enough that nobody on UBI could afford it. $3k is a lot less than health insurance costs today.

      • ga gamba says

        Indeed. Workers (and their employers) have already paid into SS (insufficiently due to the shortfall). It’s deferred income. It’s a shell game to shift it to UBI and declare it their new freedom dividend. The maximum SS benefit is $2,861 for 2019, though not all receive that amount. The SSA reports that the average retired worker receives about $1450 per month.

        Any retired people who find their present SS benefit greater than $1000 reduced to $1000 freedom dollars will howl in protest. There are about 47m retired people receiving an income – I’ve excluded those SS recipients who receive disability insurance payments and survivor benefits. If these two groups get hit too with reductions, that’s another 16m people.

    • Compsci says

      IIRC from a Friedman interview on he subject, he stated that “if” transfer payments were to be made, then the negative income tax was the most efficient method. Nothing I heard in discussion promoted such, nor spoke of necessity for such.

  10. Elton H says

    We already have UBI in the form of SNAP, Medicaid, and unemployment payments. UBI might work especially if it has the typical prerequisite of terminating all other forms of social programs.

    The bigger problem for Andrew Yang is that a presidential platform of UBI is not aspirational to make people want to vote for you. His vision for the country is UBI/Medicare for all/Human-Center Capitalism. Candidates with widgets for vision exit after the first few caucuses/primaries.

  11. Stanley Ketchel says

    UBI and dumping everything else like SNAP, AFDC, rent subsidies, unemployment compensation, SSDI and others of the “ragbag” of welfare benefits Milton Friedman talked about is great in theory. I would buy into it if it were presented in this way. However, when people put their UBI up their noses, into their arms, at the slot machines, or the local bar, we will not let them or their children suffer the consequences. A vast bureaucracy will arise (or most likely never be dismantled) to take care of those who are still unable t cope with surviving.

    • E. Olson says

      Stanley – that is precisely why food stamps and housing vouchers, etc. are not cash programs. If you give a junkie cash so they can buy food, they will use it to buy drugs. Give him food stamps and he has to spend it on food, but of course even here the junkies usually find a way to convert the stamps into drugs, so it is always a losing battle. Of course the other benefit of non-cash programs is that they need a huge administrative bureaucracy of highly paid federal workers (who can’t be fired), which makes Congress and the Executive branches feel more powerful since they are managing larger budgets and staffs.

      • Ray Andrews says

        @Stanley Ketchel
        @E. Olson

        There will be some truth to that of course, but how much? Down and outers are as much a product of the dependency system as they are users of it. Food stamps are a good example of the soft bigotry of low expectations. Insecurity causes stress which causes failure. If one knows one will never starve no matter what, one sleeps better, works better, plans better. I’d expect UBI to reduce the number of down and outers not increase it. And I know many welfare class people. Few actually want that life. If the effects of UBI on bureaucracy are what everyone expects them to be, it could be the start of a complete rethink of what bureaucracy is for. We could fire 3/4 of them … because they’d have UBI so no need to worry about them dying on the sidewalk. Imagine an economy where all work is real, necessary, productive work with no one in sinecures!

        But yes, there will have to be some garbage collection for the very very lowest sort of people. Personally I’d favor institutions for those unable to cope with life. They’d be run rather like daycares.

        • E. Olson says

          Ray – you are absolutely correct that most down and outers don’t want that life, but all too many are too addicted to various vices to quit even though they know they should, and others just aren’t smart enough to take advantages of the opportunities that are available. UBI would be worth a good experiment is the welfare bureaucracies could/would actually be fired, but the they won’t/can’t- especially by a Democrat President who gets lots of campaign contributions for public sector employee unions.

          • Ray Andrews says

            @E. Olson

            “all too many are too addicted to various vices to quit”

            I think what the whole of America can learn from that great experiment in social decay that the globalists ran in the Rust Belt and the Coal Belt is that people who have meaningful and secure lives don’t have much use for vices, but those who have lost all hope, do. It is probably the case that recovery would be rare, but what would matter is stopping folks from going down the toilet in the first place.

            An ex girlfriend of mine works with the lowest of the low in Vancouver, and — funny thing since here you see me as the bleeding heart socialist, with her I’m rather the Dickensian Scrooge — but tho my gut feelings are not to subsidize all that horror, she has convinced me through actual case histories how decent working folks end up with a needle in their arm and their pants full of shit, leaning against a wall in some ally ODd on fentanyl. It’s because in their hour of need there was nothing for them. Same in Coaltown Kentucky. Jesus, they say that every day the carts go down the street picking up last night’s dead off the sidewalks. Is this the best you can do?

            ” UBI would be worth a good experiment is the welfare bureaucracies could/would actually be fired, but the they won’t/can’t- especially by a Democrat President”

            But why just declare defeat? May as well turn off the lights and head into the bush. Heck, let’s go down fighting anyway. This Yang fella is at least going to try. I’d vote for him but for not being American. (Canadians should be allowed to vote in your elections, we’d bring some much needed calm.) Trump was a cry for help. Maybe Yang is the guy to actually deliver it.

            What if UBI was the beginning of the end of statism as we know it?

            God damn, I’m having an attack of optimism.

          • E. Olson says

            Ray – do you think your fearless leader Trudeau would ever fire most of the Canadian bureaucracy and replace it with UBI? Trump hasn’t even proposed any serious cutbacks the bureaucracy, and have you not noticed how hard the DC swamp has been fighting back? There is zero reason for optimism – a UBI were only happen if all the other welfare programs and their bureaucracies were kept intact, and would therefore bankrupt an already bankrupt nation.

    • MMS says

      @Stanley: This!

      Mover over does anyone really think the bureaucrats and public unions will allow their dominion to be replaced and go quietly into the long goodnight…

      No bleeding heart will allow a drug addict to go without services because their “disease” caused them to put their UBI up their veins.

      Moderates like me and even hard right people will not allow the government to sit by as children starve because their parent(s) drink up the UBI check again,

      It would be great if i could work but we don’t have the stomach for it…

      • Ray Andrews says

        @E. Olson

        “do you think your fearless leader Trudeau would ever fire most of the Canadian bureaucracy and replace it with UBI?”

        Justin has love, and that’s all he really needs.

        Seriously, no he wouldn’t. But as I said, if any country wants to go with UBI, they should understand that almost every other program will be scrapped. It is a poor argument against UBI to point out that it would be possible to screw it up. Of course it would be possible to screw it up. There is no social policy whatsoever that couldn’t be screwed up with enough incompetence.

        • Ray Andrews says

          Mind …. it is a very good argument (if true) to point out that UBI is very likely to be screwed up. But is it? It seems to me that bureaucratic incrementalism is strangling us and that UBI would be a very pointed paradigm shift and could thus be the start of a new day.

          Or not. Never underestimate the power of human stupidity. But … then we may as well turn out the lights and walk into the woods.

  12. Just a few considerations:

    1 re: life is hard and stressful. Hasn’t this been the case since forever? My parents raised animals at home and slaughtered them to have something to eat. For older generations, it’s even more rough (is an iPhone bill worse than that?). It didn’t stop our ancestors from having children and building businesses and innovation.

    The world has always been a mess. Wars, bear markets, whatnot. You can probably look up a major problem every year. 94? Tequila Crisis. 98? Russia. 99? Brazil. 00? Nasdaq. 01? Twin Towers. And the world is still here. Are you gonna wait until every issue is resolved before investing in businesses and having children?
    To me, this is more of a problem with people not being able to deal with the world as it is. Encouraging this mindset by proposing a program to fix the external environment so they can move on with their lives is the wrong target and likely wouldn’t solve the issue UBI proposes to solve.

    2 The central argument is automation. If the idea is to share the spoils of automation, we’d be better off giving people a currency of exchange for financial shares of such companies they could trade and/or hold. You can’t rid society of risk and reward. This way people can properly participate in profits (and losses) of automated companies by having a stake of ownership in it, maintaining a relationship with real world risk and feasible financial accounting.
    Just redistributing a fixed, arbitrary amount of cash looks like just an idea someone pulled out of a hat.

    • Ray Andrews says

      @Ed

      Sure, but we are all shareholders in the corporation of the whole and the board — the government — should run the corporation of the whole for the benefit of its shareholders without us needing to worry about it too much.

  13. Milo Minderbinder says

    If you are going to give $1000/mo. to every US citizen, then you are going to need to build a really big wall to stop the third world from crossing the border, popping out a kid, and winning the birthright citizenship lottery.

    What is the NPV of a inflation adjusted $12k/yr annuity? Add in free health care and education and then solve for the equilibrium.

    • I need to confirm this, but I recall him saying in an interview that he is for “strong borders”. He’s also not for free higher education, and believes college is being oversold.

      • Milo Minderbinder says

        I agree college is oversold, but I am not talking about higher education. I am talking about K-12 (currently over $20k/yr per student in my state) . I hope he’s serious about “strong borders”, but he’d have to actually implement that before UBI. And given the current political climate, I don’t see how that’s possible.

  14. Farris says

    During the healthcare debate, Americans were told, that the more that were insured, the more money the program would save. Under that rational Americans should have insured mainland China.

  15. Brian says

    “If a man has one dollar he didn’t work for, some other man worked for a dollar he didn’t get”. This isn’t going to change just because some jobs get displaced. What people like Mr. Yang seem to forget is we, meaning humanity, have gone thru EXACTLY this change before in history. Every time people scream the sky is falling and all the jobs will disappear new industries rise and create jobs we didn’t count on and couldn’t have seen coming until they showed up. Turns out humans are really bad at predicting the future. There is 0 reason to believe it won’t happen again.

    On a different level entirely, it is not the responsibility of government to ensure I have money. Or food. Or health care. Or anything at all. That is not and never has been it’s purpose. We need to stop relying on government to ‘fix’ things because the only thing they are good at is screwing things up. I defy anyone to name one thing the United States government has ever done well and without massive waste.

    Let’s not even forget the biggest problem with UBI, it prioritizes empathy over a basic understanding of human beings. Do you think that people who are jobless that receive this UBI will use it to “get back on their feet” and find a new career? Maybe a small handful and that isn’t nothing. What will end up happening for a shockingly high percentage of people is they will A) learn to live off of just that much money, B) start packing into residences like clown cars to try and make the money stretch farther, and C) complain that 1000 a month isn’t enough to live on (no shit) and that the government should start paying more.

    • Compsci says

      The essential problem with looming automation and displacement of workers is that as a society, we increasingly favor products of the mind, i.e., brain, not brawn. Indeed, more jobs (ones than pay a sufficient salary for a decent life) may become available as technology evolves, but less and less of our population will be at a intellectual level to fill them. Indeed, the old saw “learn to code” has been turned into a cruel meme on the internet. And rightfully so. Get the biology right and all is downstream from there.

  16. Kauf Buch says

    What dishonest drivel: Socialist enslavement disguised as mere Leftist verbal diarrhea.
    Left out of YinYangDingDong’s deceptive rant was the key phrase of Milton Friedman’s quote: “welfare…to all persons in need.”…NOT a UBI which pointedly makes slaves of ALL citizens.

    Leftist Liars Gonna LIE.

  17. Lert345 says

    Were the UBI to be instated at $1000 a month, my employer would immediately reduce my salary by the exact same amount.

    I don’t think employer reaction is taken into account.

  18. Justus Eapen says

    INFLATION IS NOT LOW. What a load of BS.

    The gov’s measure of inflation is terrible. Doesn’t include a number of major expenditures for normal people.

    Just anecdotally, have your energy (except gas) prices been stable? Housing prices? How about food? How about higher education?

    Tell me why employers won’t just refrain from giving raises for several years while slowly increasing prices since now anybody will be able to afford it? You think your landlord isn’t going to raise rent?

    Macroeconomic nonsense. Common sense tells you this won’t work. All socialist policies DON’T WORK.

    • ga gamba says

      The gov’s measure of inflation is terrible. Doesn’t include a number of major expenditures for normal people.

      Voilà! Another person who understand that when you control the definition, in this case the goodies that are put into the basket used to calculate CPI, you control the outcome.

      Same too for unemployment. Many other gaming of the systems as well. This is why the military is going to be doing yoga. “The women meet the same (now remarkably reduced) standards the men meet.”

      In America ever goes to war with the yogis, they’d better watch out.

      • Bill says

        Hey boo-boo, I think those US Marines have a pic-a-nic basket! Oops, wrong Yogis, I misunderstood.

  19. Farris says

    Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
    * The first four men (the poorest) would pay nothing.
    * The fifth would pay $1.
    * The sixth would pay $3.
    * The seventh would pay $7.
    * The eighth would pay $12.
    * The ninth would pay $18.
    * The tenth man (the richest) would pay $59.
    So, that’s what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers”, he said, “I’m going to reduce the cost of your daily beer by $20”. Drinks for the ten now cost just $80.
    The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his “fair share?”
    They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
    And so:
    * The fifth man, like the first four, now paid nothing (100% savings).
    * The sixth now paid $2 instead of $3 (33%savings).
    * The seventh now pay $5 instead of $7 (28%savings).
    * The eighth now paid $9 instead of $12 (25% savings).
    * The ninth now paid $14 instead of $18 (22% savings).
    * The tenth now paid $49 instead of $59 (16% savings).
    Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth man, “but he got $10!” “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got ten times more than I!” “That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!” “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!” The nine men surrounded the tenth and beat him up.
    The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

  20. Farris says

    UBI appears similar to farm subsidies. In essence paying someone not to do something or for not doing anything. Farm subsidies keep farm commodities artificially high. So what will UBI do for labor costs. People need opportunities more than money. The old saw “Liberals define success by the number of people they help. Conservatives define success by the number who no longer require help.”

    • Ray Andrews says

      @Farris

      That’s a pithy quote. I like the conservative view, with the caveat that people who no longer need help because they’ve starved to death should not count. Furthermore, in the short term people often do need money more than opportunity.

      As to labor costs, it could be interesting. IMHO UBI would eliminate the need for minimum wage so low wage work should increase dramatically. UBI could be a huge boon to the low wage sector while still letting people have enough money to eat.

      • Farris says

        @Ray

        Time out. Where is it written that UBI would eliminate the minimum wage? To borrow an old quote you are entitled to your own humble opinions but you’re not entitled to your own facts. Be careful or your arguments will soon become pie in the Sky rainbow stew. If we just give everyone $1000 more per month, the able bodied unemployed will rise from their couches like the Phoenix from the ashes and march to these suddenly appearing and waiting new jobs. The deficit will go down, peace will guide the planet and love will steer the stars.

        In two replies you have made reference to starving people. Where are these people in the U.S. or are you referencing 3rd world countries?

        • Ray Andrews says

          @Farris

          “Where is it written that UBI would eliminate the minimum wage?”

          It is written just above.

          https://www.youtube.com/watch?v=_EZCG2Ex8Q0

          https://www.youtube.com/watch?v=z7TnY94x_mI

          Sorry 🙂

          Ah …

          “the able bodied unemployed will rise from their couches like the Phoenix from the ashes and march to these suddenly appearing and waiting new jobs”

          Well, if they want the latest i-pod then yes, they’ll need some more money than UBI. And since minimum wage laws are there to keep workers from starving to death, and since there is no longer any reason for anyone to be hungry, what need of such laws? Or any number of the other protections that workers have? The ones that often just end up buggering around their employers? Imagine a genuinely free economy because the government takes care of the one thing that everyone needs, namely a basic income?

          Yes, sorry, I did say ‘starvation’, I should have merely said desperate poverty. More like, desperate hopelessness tho.

          • ga gamba says

            Imagine a genuinely free economy because the government takes care of the one thing that everyone needs, namely a basic income?

            TL;DR: Yes, it’s do-able under the most draconian implementation and by having a flexible VAT to match revenue to expense – likely at 30% +/- a few percentage points and no exemptions. You’d probably need a Constitutional amendment explicitly forbidding the resurrection of benefits programmes nationally (federal, state, and local).

            OK, let’s play this out. In 2018 the total value of all retail sales was $5.4 trillion. What VAT do you need to apply to that to get $4 trillion, when everyone in America gets UBI of $1000 per month each, or $3 trillion, when everyone 18 and older gets $1000 per month? The $3 trillion poses a problem because a low-income ($18k) single mum with three children still can’t make a go of it with $12k extra and will still demand benefits. So, you have a choice of giving the children UBI too or keeping the welfare benefits programmes running. I’ll take you at your word that the goal of only one thing applies, so the children get UBI as well. $4 trillion it is.

            If you exempt basic items such as food from VAT that’s a retail value of $660 billion per annum that needs to be made up for by higher VAT on everything else. Reduce or eliminate here, increase there.

            The amount spent on services is about $8.8 trillion. Presumably VAT applies here; services with retail sales is the only way you can make this viable. Services are more than what’s paid to the accountant to cook your books and the cobbler to mend your boots; it includes spending on housing and medical care as well as given to and spent by tax-exempt organisations – the non-profits.

            The total value of all retail and service spending, called Personal Consumption Expenditures (PCE), is $14.2. trillion. To get your $4 trillion freedom dollars you need a VAT of 28% applied on all PCE w/ no exceptions whatsoever. This assumes that PCE remains stable. But, because you’ve taken 28% out of the pockets of consumers, I think PCE may take a hit. There is the sticker shock of seeing a whopping increase applied at the till. You can mitigate the psychology of this by concealing the VAT in the price tag – consumer just see the final VAT-included price. “But we put $1000 in each consumer’s hands too.” True, and because genuine UBI hasn’t been applied in the real world, all we have is modeling that projects a variety of outcomes. If VAT revenue can’t sustain freedom dollars, then a higher VAT is needed. Every 1% increase in VAT theoretically should get you another $143 billion in revenue (at present PCE). You have to maintain VAT flexibility.

            To eliminate evasion you’ll have to eliminate cash – think informal retailing such as flea markets, swap meets, yard sales, boot sales, etc. Fortunately mobile phones can be made into a POS terminal with a plug-in attachment.

            The effect on people will be how they are situationally placed. A widowed retiree relying on SS income above $1000 per month and having high medical expenses aided by Medicare/Medicaid gets shafted. A working-class household of 4 with $40k in income now has $88k, but this puts them into a higher income tax bracket. After deductions, assuming these still exist, they have a taxable income of about $73k, so a tax rate of 15% ($11k), which is almost of one UBI. They’re cooking with grease. Or are they?

            It will cost you about $58,906 a year to raise a four-person family in Brownsville, Texas, for example, but if you move to San Francisco that expense more than doubles, to $148,439. Expect the complaints over geo-loco cost of living to be made.

            What this does to investment is tough to say. Having a guaranteed income may allow people to fail to plan for their retirements.

            What this would do to the makers and retailers of non-basic items and the providers of non-essential services, and their employees, is left to speculation. Given much of the West’s competitive advantage rests mainly with the manufactures of value-added (expensive) goods, if spending drops there this hits them hard. More transfer of wealth to China, though. Yippee!

            Income taxes, real estate tax, capital-gains tax, petrol tax, etc. remain unchanged. SS and Medicare contributions could be reduced, but not eliminated entirely for a while because you have to wind down those programmes – more below.

            The real painful problem you have is Social Security and Medicare. You’ve eliminated it. Golly, have you angered the elders and the disabled. And the ill. If there are existing deficits in the trust fund you have to repay those. Brace yourself for the news report of the elders getting tossed from their nursing homes.

            SS claims its administration expenses are $6 billion, and these are paid for by the SS trust fund. Sixty thousand employees will be made redundant, but you have to carry them for a while because as Federal employees they have their federal pensions – are you eliminating federal pensions as well? Remember, these pensions are part of their compensation package, so I doubt this is viable or legal. The cost of SS completes when the last former worker (or his/her dependent) one dies.

            The same holds for the other agencies to be eliminated. Good news! Some agencies that are not welfare benefits administrators, such as the IRS, also provide office services to the benefits agencies, so you can eliminate some of these employees too. Same caveat about their pensions applies.

            Of the programmes not funded by payroll tax, such as SNAP, you’ll find more money. SNAP is about $70 billion. Housing vouchers (Section 8) is about $30 billion. In total the safety net programmes are $354 billion, about 9% of freedom dollars.

          • Ray Andrews says

            @ga gamba

            I love your number crunching, is shows a bent for reality over theory. I can’t follow you but I do know that so long as productivity stays the same, then the wealth is the same, as always it’s simply a question of how it is divvied up. But, any policy which reduces the parasitic drag of bureaucracy is to be welcomed, as is anything that motivates people to produce and discourages them from being dysfunctional while still protecting against genuine hardship. That’s UBI.

  21. Benjamin Perez says

    Yang’s kind of like a “Sanders,” but a “Sanders” who actually knows where actual money comes from (and, and as important, where money doesn’t come from); and Yang’s kind of like a “Trump,” but a “Trump” who’s advocating economic patriotism, as opposed to economic nationalism (and that difference might make all the difference). I’ve watched many an interview/etc. with Yang posted on YouTube (I liked his talk with Tim Black, I liked his talk with Red Viking Trucker)—he’s had some with conservatives, actually (he’s been on Fox a few times now), which I’m pretty sure sets him apart from the other democratic contenders. (We’ll see…) It seems to me that, whereas both Sanders and Trump are offering 19th-century answers to 21st-century problems, Yang is offering 21st-century answers to 21st-century problems. Also, although he’s running as a Democrat, his brand of “progressivism” is not only pre-PC/pre-SJW but non-PC/non-SJW (watch his talk with Joe Rogan), which, if that became the norm, would not only save the Democratic Party but maybe even America. If one finds the whole UBI (“Freedom Dividend”) thing fishy, read his book, The War on Normal People, then ask yourself this question: what, really, can society do to best adjust/adapt/evolve to the very fast approaching new techno-capitalism? (And then maybe ask this follow-up question: after the truckers lose their jobs, what might some of them, maybe even many of them, do—not only with their trucks but with their guns?)

  22. david of Kirkland says

    “To provide 1000 dollars a month to every American citizen today, the headline cost would be about $2.4 trillion a year.”
    There already are more than 320 million US citizens, at $12,000 year is $3.84 trillion.
    The negative income tax doesn’t require this sort of government control of the economy because MOST citizens make enough money to require zero dollars from others.

  23. Thomas Barnidge says

    While working in social services, we would have our clients attend a class where we would demonstrate that by getting a minimum wage full time job (coupled with government programs), they could enter the middle class. You know, new car, savings, maybe buy a house, etc. our success rate? If 25% of our clients in a month got jobs (even if it was just for a few weeks, which it often was), we would get an award from administration. Most often, 90% or more would prefer to live on their welfare payments rather than improving their lot in life. So I imagine if the general public got a “free” money allotment each month, many more would decide to live on the dole. A downward spiral for society.

  24. Strawberry Girl says

    I loathe the idea of UBI. PLENTY of people will sit on their kiesters, like in Wall-E, doing nothing or they will find second or third gigs paying under the table to supplement their free money. Then soon, they’ll start complaining it’s not enough. Cost of living is too high. Not enough money for medical bills or to feed and clothe five kids. So politicians will keep promising more dosh to be paid by those suckers still working at jobs since there are only so many rich to keep stealing from.

    And if we’re automating soon, why the hell do we “need” so many low-skilled workers from foreign lands?

  25. We already have UBI for old people and disabled people: Social Security. This is funded by taking money out of the paychecks, and everyone is fine with this. Currently, large corporations are spending billions of dollars to buy back their own stock. Corporations only care about their own greed, so of course we should tax corporations for UBI for everyone, especially since the cost of living keeps increasing: daycare, higher education, healthcare, etc.

  26. It will never be implemented – at least not as a substitute for the other welfare programs – because there are insufficient opportunities for graft and administration costs.

    The welfare state has a business model. It exists to benefit well connected bureaucrats. They will never sign off on anything that takes income away from the administrative class.

    • Serenity says

      Well said! “The welfare state has a business model. It exists to benefit well connected bureaucrats. They will never sign off on anything that takes income away from the administrative class.”

      “Freedom dividend”? UBI would foster unprecedented in Western World government dependency.

      Independent from government electorate is crucial for democracy.

      On 5th of June 2016 Switzerland has become the first country in the world to hold a nationwide vote on introducing an unconditional basic income. Despite a spectacular pro campaign, there was no hope of it winning a majority.
      Official final results show the proposal winning 23.1% of the vote and all the country’s 26 cantons coming out against.
      https://www.swissinfo.ch/eng/directdemocracy/vote-june-6_basic-income-plan-awaits-voters-verdict/42200378

  27. Serenity says

    “As long ago as the 1930s, the economist John Maynard Keynes was predicting that as living standards rose in rich countries, working hours would fall. We should expect a 15-hour week within a hundred years, he said.

    That clearly hasn’t happened [yet], despite proposals by respected organisations like the New Economics Foundation, a think tank based in London. In 2010, it began advocating a gradual transition to a 21-hour working week.” Timothy Revell “Be careful what you wish for.” NewScientist

    Sharing available working hours – by employing more people for a shorter working week – is a perfect way to address reducing job opportunities caused by robotics and artificial intelligence with gradual transition to Keynes’ 15-hour week.

  28. Farris says

    Herein lies the inconsistency of the Left:

    When it comes to wealth creation it is a zero sum game.
    When it comes to wealth redistribution there is an infinite supply.

  29. Mackilicious says

    Won’t work without strong immigration controls. It won’t work anyway because some people will spend the money poorly, so there will always have to be more safety nets added to help the idiots.

    To say nothing of the massive overnight inflation it would cause.

    • Peter Schaeffer says

      JWatts, I don’t know the correct number for LPF for Europe. However, I would not trust Trading Economics. Much of their stuff doesn’t hold up.

  30. amos farrell says

    This argument would carry a lot more weight if unemployment wasn’t 3.9 % with a steady increase in the labor participation rate.

  31. OWG says

    How about requiring UBI recipients to give up the right to vote in any elections at any governmental level? Would have to be more than federal to prevent UBI recipients in cities and states from gaming the system.

    • david of Kirkland says

      As the UBI is “universal” by its very words, your solution would mean nobody could vote.

  32. I think that Yang’s numbers need some recalculation. That 69% labor force participation rate cannot possibly be taking into account the fact that there are 55 Million solopreneur/freelancers in America happily working for themselves; and this also skews the number of “new businesses’ because most freelancers are not applying for loans or filing for local business licenses so they are not counted in his statistics. Slightly more than 35% of the US workforce is freelance in 2018, and with technology we are doing work all around the world from our homes in the USA. https://www.statista.com/chart/10981/freelancers-in-america/

    • david of Kirkland says

      What, you want people to take risk and think hard and create businesses that contribute to the economy and the progress of civilization? Why do that when you can instead not work and just wait for a check, even have a few kids or roommates so you can be middle class while doing nothing.
      The UBI proposed shows a disdain for work, a disdain for entrepreneurship, a disdain for writing government checks to all who don’t need coerced dollars from others to live their lives.

  33. Tibbles says

    How high would Trump have to build that wall, if this was ever implemented?

    • david of Kirkland says

      Are you kidding, even if they could keep everyone out, there are plenty who will have more babies for $1000/child/month in their pocket.

      • Kauf Buch says

        No, YOU are kidding, if you really think that $1,000 means nothing else changes (as opposed to market prices adjusting, and making $1,000 worth maybe $50-100 in purchase power)…SEE YE OLDE “$15/HR MINIMUM WAGE Leftist fantasy.

        And that’s not even talking about the likelihood of hyper-inflation due to the cost. SHEESH!

        Stop taking those Marxist drugs, Davy; they’re really showing mental damage.

  34. How naive does one have to be to believe a government would stick to an agreement to eliminate other mandatory spending in favor of a UBI? Since when has any government not increased spending and taxation rates? What a joke.

    • david of Kirkland says

      They certainly won’t double/triple taxes and then just give it back without strings attached. Corruption requires that the politicians control matters to benefit the donor class and themselves.
      Government will always strive to control you more. It’s how power works, to control others to meet your objectives. Liberty will always be hard because most prefer authority over thinking, which like work, is harder than not thinking and not working.

  35. Peter Schaeffer says

    “We are in the third inning of what Yang calls “The Great Displacement.” Between 2000 and 2015, America automated away 4 million manufacturing jobs (four times the amount lost to globalization), many of which were in swing states Donald Trump won in the 2016 election.”

    Wrong on every count as it turns out. Was their a great burst in manufacturing productivity from 2000 to 2015. No as it turns out. See Fred series “Manufacturing Sector: Real Output Per Hour of All Persons (OPHMFG)”.

    Manufacturing productivity rose from 69.917 (Q2 2000) to 99.243 (Q2 2015). That is a 31.9% increase. By contrast, manufacturing productivity rose from 44.629 in Q1 1987 (as far back as the data goes) to 69.917 in Q2 of 2000. That is a 56.6% increase in fewer years.

    In real life, manufacturing productivity growth has been slowing for years. In fact, manufacturing productivity hasn’t grown at all in since 2010. Check out the Fred data if you doubt this.

    Of course, total economic productivity has slowed down quite a bit in recent years. The idea that we are in an era of fast technological change is a myth. The actual data shows stagnation. See “Nonfarm Business Sector: Real Output Per Hour of All Persons (OPHNFB)”. What is striking about this data is not growth in recent years, but the collapse of growth.

    Of course, “four times the amount lost to globalization” isn’t true either. Take a look at “All Employees: Manufacturing (MANEMP)”. Employment crashed after Bush took office. Productivity didn’t exactly soar. What really happened? The trade deficit exploded (Bush, the gift that keeps on giving). See “Trade Balance: Goods and Services, Balance of Payments Basis (BOPGSTB)”.

    Wow, a long list of serious factual errors in one paragraph. Is the rest of the argument any better? No as it turns out.

    • david of Kirkland says

      You can increase manufacturing output using fewer workers, which is precisely the point he’s making. It’s not that less value is manufactured, just that it takes fewer workers who are paid less to produce more.

  36. Peter Schaeffer says

    “1000 dollars a month to every American citizen today”

    The population of the U.S. is 325.7 million. That’s $3.9 trillion, not $2.4 trillion. Of course, not all of those 325.7 million are citizens. However, the notion that UBI would be limited to citizens and not include lawful immigrants (LPRs in legal terms) is far fetched (and probably unconstitutional).

    • david of Kirkland says

      What’s even the point of giving such benefits to those who are able to lead productive lives and thus have no real need for cash coerced from other people’s pockets?
      Once you give to everyone, it’s worth $1000/month just to have a kid. Have 5 kids and you’re making $60,000/year just for breeding.
      People are kinder to wild animals: 1) they don’t feed them; 2) they put them down when sick/injured. With people, we want to feed them and keep them alive at all costs. Of course, you can misspend your limited resources this way, but you are making society sicker and worse off pretending to be caring.

  37. E. Olson says

    Thank you Ga Gamba for all your research and calculations with regards to the financial implications of UBI, VAT, taxing the rich, etc. Very well done – too bad Yang didn’t have you on his staff before rolling out the idea.

  38. Peter Schaeffer says

    I wrote the following about a proposed UBI in Switzerland…

    I would be the first to agree that we are going to hear more about UBI over the next 5-20 years. Indeed, the winning coalition in the recent Italian elections promised to introduce a UBI program in Italy.

    However, the truth is that UBI implementations are likely to be few and far between. There are a couple of huge problems.

    1. UBI is unaffordable. Switzerland has 3.5766 million households. At 2500 SF per month, the program would cost $110.517 billion per year. Switzerland has a smaller number of families (2.2213 million). Even just including families would cost $68.638 billion per year.

    To put this in perspective, the GDP of Switzerland around $659.8 billion. However, a more useful number is tax revenue. Total tax revenue for Switzerland (all levels of government) was $186 billion. Total income tax revenue was just $81.63 billion. A UBI system would cost more than total income tax revenue for the entire country.

    For the U.S. $1,000 per month, per person, would cost $3.8 trillion per year. Total income tax revenue for 2017 is estimated at $1.844 trillion. Corporate tax revenue is estimated at $430 billion. Social Security is estimated at $1.218 trillion.

    2. UBI is incompatible with reality. In the real world, society needs people to work. For a society to function, essentially all adults must work. The relatively successful nations of Northern Europe have very high LFP rates. Essentially all adults works. Many jobs are not fun. They still have to be done. This is a/the core truth that UBI conflicts. Giving people a choice about working isn’t sustainable.

    The current UBI craze is a (partial) reflection / consequence of the emergence of a new cosmopolitan class detached from reality. To state this directly, if you get a liberal arts degree from a liberal arts school you are going to end up working as a barista with a ton of debt. The fact that society forces you to work isn’t going to make you like it.

    Traditionally, kids from upper income families got liberal arts degrees and then joined their class. Apparently, a liberal arts degree from Harvard was considered to be an appropriate qualification for a senior executive (at one time).

    Social realities that “force” people to work weren’t even questioned historically. Everyone knew that work had to be done and people had to do it. In real life, reality hasn’t changed, but the necessary coercion is no longer PC.

  39. Paul Deuter says

    A job is “work for pay”. Sometimes a job goes away because the work goes away (automation), but much more often, the job goes away because there is not enough money to pay for the work.

    Every company, every industry, every sector has much more work than they have money. Examples: hospitals are chronically understaffed, schools are understaffed, police forces are understaffed, mental health services are understaffed… Literally *every* institution is understaffed.

    So, if we have extra money, we should not give it to folks to do “nothing”. We should use that money to pay people to do all the work that is currently not being done.

    We should favor the EITC instead of UBI.

    • Ernest DuBrul says

      Mr. Deuter–
      “We should favor the EITC instead of UBI.”

      Absolutely! Increasing the EITC is the only “social net” policy that works to allow individuals to advance in their lives.

  40. Peter Schaeffer says

    Various folks (all liberal/left) have looked at the UBI and come up with some strikingly negative conclusions. Here is why.

    If you take the money currently going into Social Security, Medicare, Medicaid, food stamps, etc. and give it to everyone (as in Universal), then the folks currently benefiting from Social Security, Medicare, Medicaid, food stamps, etc. would get a lot less per person. That’s a huge problem.

    If you fix that by spending a lot more money, you get a UBI that costs roughly 20% of GDP. To put this in perspective the entire income tax (individual, not corporate) is just 9.3% of GDP (2017). Total Federal Receipts are 17.5% of GDP according to FRED or 18.9% of GDP according to the tax policy center.

    The liberal/left is (sharply) divided about the merits of the UBI. The traditional liberal/left is opposed for the reasons stated above. The more contemporary left (and some of the right) is much more supportive. The idea that everyone (all adults) must work doesn’t offend traditional left-wing sensibilities (“He who does not work shall not eat” is a quote from Lenin). The contemporary left regards this mindset as coercive and offensive.

    I common argument (from the contemporary left) is that

    “everyone should be able to develop their artistic and expressive talents free from the necessity of earning a living”

    To me, that’s crazy. Very few people have any talent at all (in my opinion). However, I am not a liberal-arts guy.

    • david of Kirkland says

      PS – If you tax highly but then give that money back to the citizens (redistributed, of course) to spend as they see fit, you are not taking money out of the economy, just shuffling it. That’s quite different than taxing and spending on government alone.
      A negative income tax is much better. It requires that citizens identify themselves via taxation, show they are not making “enough” and so get some money to help their cause. It means that all who do not need government funding won’t get it and there’s no need for the collection and re-distribution through the government.

  41. Larva says

    It’s like admonishing socialism by adding your least destructive socialist fiscal policy.
    Let’s just set the baseline of poverty to $1000 a month so morons can buy their Chinese government surveilled tech toys. It’s not like the market won’t adjust.

  42. Daniel says

    “… along with the tax revenue generated from the extra $1000 a month circulating back into the economy …”

    So, they wouldn’t be getting $1000 a month.

    The author also mentions the decrease in welfare that would be possible with this plan. So poor people wouldn’t be getting $1000 more a month, they’d just be getting financial help from a different place.
    What this is, then, is a stimulus for the middle class, and latte money for the Bernie Sanders’s of the US. (BS is top 2% in the US in income, according to his 2013 reported income — ever wonder why he hates the 1% so much?)

    But do the middle class really need $1000 more a month? Nobody would complain if everything else stayed the same; but how much would change? What societal changes would actually come at the expense of UBI?

    Not convinced.

  43. Watch Yang on Joe Rogan youtube podcast. Yang changed my thinking on this. He addresses most of the issues talked about here. What should happen to the millions of “useless people” (Yuval Harari’s term)? To my mind, Yank is the only candidate who has rational ideas on economics. And he’s good at explaining them. He’s a long shot, but so are the libertarians whom I might otherwise support.

  44. Eugene Gwynn says

    -There is a reason that rats become caught in a trap. It is that they do not understand just why the cheese is free.

  45. Kunal Balooni says

    Taxes of any kind are a violation of property rights since citizens are not given the option to opt out of using services provided by the government. Taxes are coerced from citizens and should be opposed by anyone who supports (life, liberty and) property rights.

    Modern civilization, which enables us to maintain four billion people in this world, was made possible by the institution of private property. It’s only thanks to this institution that we achieved an extensive order far exceeding anybody’s knowledge, and if we destroy that moral basis, which consists in the aggregation of private property, I think it will destroy the sources which nourish present day mankind and create a catastrophe of starvation beyond anything mankind has yet experienced.
    – FA Hayek

  46. Ernest DuBrul says

    Let’s be very clear about the key point: What Mr. Kronen says Andrew Yang is offering is NOT in any way Milton Friedman’s brilliant idea of a negative income tax. As Friedman is quoted as saying in the initial sentence of this article: “We should replace the ragbag of specific welfare programs with a single comprehensive program of income supplements in cash .”

    Friedman’s idea is a REPLACEMENT, not a supplement. As such, its cost would be negligible because it would replace Social Security, Medicare, Medicaid, SNAP, and ALL other social safety net programs and their bureaucracies, except perhaps those programs for individuals who would be too mentally impaired to care for themselves.

    The idea of total replacement is what makes the concept of UBI anathema to liberals, and the idea of partial replacement makes the concept anathema to conservatives. Too many people have too much invested in the current “ragbag of specific welfare programs” for Friedman’s idea to ever be taken a a serious political proposal.

  47. Marilyn Krzus says

    It’s sheer nonsense. Every couple decades technology changes. People adapt and learn or are out of jobs. It’s life. When my mother had to get back into the workforce, she took a class in keypunching, as that’s what the technology at the time offered. I learned copying on mimeograph machines and sending data to Europe on telex machines. Technology has and ever will be changing.

    WE (of old) adapted—what’s wrong with humanity today that they are unable to???

  48. Roger Barris says

    Perhaps others have already made this comment, but Andrew Yang, do not quote Friedman in support of UBI. A negative income tax and UBI are NOT the same thing. The difference is that a negative income tax bumps up the income of low-earning employees – it actually encourages more work by making it more remunerative. A UBI pays people regardless of whether they are working or not – this discourages work. Big difference, particularly when every study shows that working – instead of just getting a check – is enormously important for self-worth and a whole series of other life outcomes.

  49. Here’s a funny coincidence…

    The U.S. Federal Government spends about 3.9 Trillion per year.

    UBI Math:
    Population 330,000,000
    UBI/year 12,000
    Cost 3,960,000,000,000 (3.9 Trillion)

    So, doubling the spending of the Federal Government.
    FedGov can’t pay the current 3.9 from taxes! They have to borrow a trillion!
    Now they will have to borrow five trillion.

    Oh, I forgot, FedGov is going to raise taxes (and supposedly close out other welfare projects. Right.) under various schemes to “pay for” UBI, so don’t worry, we will only be incurring the normal trillion in debt each year, not five trillion. Whew. I was worried there for a moment.

    Insanity.

    • Kauf Buch says

      So true! When you strip away the FAUX-ECONOMICS jib jab, all you get is:
      “If money doesn’t grow on trees, why do banks have BRANCHES?!”
      YES, these insidious Leftists are that stupid…and devious.

  50. Mitchell Chanelis says

    The only economically and socially equitable, and morally just, basis for Guaranteed Income schemes is to have them come from the vast pool of unearned (‘rentier’) income which constitutes about 40% of national income.

    Rentier income (from, let’s say, automatic increases in the value of real estate) is ‘unearned’; because unlike ‘earned’ income, the ‘economic rent’ which attaches to LAND values, comes not from the provision and exchange of goods and services (products of human LABOR and economically productive CAPITAL investment), but from social demand for a fixed resource.

    Rent is a social product and therefore belongs to society. If, indeed, the full 40% of socially generated national income were returned to ‘we the people’ who created it, there would likely be a huge surplus for aliquot distribution as a Citizen’s Dividend, even after legitimate expenses of governance were generously met.

    • The reason real estate goes up in value is inflation, which is a creature of the ProgressiveProject. If you hate “rentier income from inflation” then just dismantle the Keynes/Progressives system.

  51. So basically, we all get taxed more so we can be sure everyone gets a universal dividend. Surely you jest? I can guarantee there will be billions skimmed off the top by insiders before any forced redistribution begins. Thanks, I will continue to support my local church and charities and help out my family members and neighbors who are less fortunate. On my terms.

  52. The Citizen’s Dividend Party brings a similar philosophy/policy to Australia.

    citizens-dividend.org

  53. Geary Johansen says

    Since seeing Andrew Yang on Joe Rogan, I have been watching his interviews- and I have to say I am very impressed. Unlike other politicians, on both sides of the aisle, he both understands and is addressing the real problems that underlie revenue systems in the US and the West.

    When trying to counterbalance a viewpoint on economics derived by watching Yaron Brooks and Johan Norberg, I came across the political economist Mark Blythe. No-one explains the reasons behind the financial crisis better and his testimony to congress elucidates the problems of the US revenue systems clearly and concisely. Simply put, the software we are running within laissez-faire economics has a tilt against labour every bit as steep as the tilt against capital, run under Keynesian economics, and America’s tax policy for corporations can best be described as BOTH minimal AND possessing all the tax loopholes Reagan sought to reform when he lowered income tax.

    The UK’s Inland Revenue has suggested in the past that the best way to remedy the tax avoidance schemes used by multinationals, is to run a dual-track tax system adjacent to corporation tax, with which corporations pay a minimum of 2% of turnover if their corporation tax falls below that level. Obviously no american candidate for President is going to make that a part of their manifesto, as they would face too much of a political headwind from the mainstream media.

    But, of course, UBI can only really be described as a stop-gap measure to a far more persistent and threatening problem, the problem of labour. The very first page of the Wealth if Nations, discusses the necessity of useful labour, and in a modern sense we have to start viewing capital and labour, as a coupled system or as a mutually dependant beneficial relationship. The whole reason why capitalism and the market work so well is because a business can act as both a source of profit and as a labour-utilising distributor of income to the broader economy. Those profits can then be used to either purchase goods and services or invested to generate more labour, hence the invisible hand and the virtuous cycle derived from the vile maxim.

    There are several problems inherent to modern economics, especially in relation to the US. The first is over-corporatization- only with a thriving economy of small businesses becoming medium-size businesses, do you get both competitive pricing and high quality niche goods and services, as well as crucially important higher rates of labour utilisation. Second, is the way technological disruption, in addition to automating jobs, is dislocating price from value- with many common goods (such as the healthy functioning of a fourth estate), having their price lowered, or rendered non-existent, whilst their value remains. Third, and most importantly, their appears to be an increasing extent to which the highest rates of return on capital, require little or no labour inputs.

    To put this in perspective, in the first few chapters of Len Deighton’s book ‘Blood, Tears and Folly’, he makes the observation that by the 1890’s, Germany’s manufacturing output outstripped mainland Great Britain’s by a factor of 5 to 1. This was due in principle, because investors could make money from both an overly financialised stock market in which the financial analyst almost always won, and the dual-stream of capital gains and rent-seeking possible by investing in property and charging exorbitant market led rates, which all but ensured stifling over-occupancy for the poor. America’s manufacturing output is now a quarter of Germany’s, with a greater and greater proportion of wealth being invested in speculative assets, with all the economy-damaging volatility that this implies.

    Fundamentally, the British Empire was undermined well before the Second World War, by the movement of capital from healthy revenue producing industries to property and casino economics. It was the corrosive emphasis of financial wealth over productive wealth, over a sustained period of time, that left Britain incapable of meeting the demands of both a newly instituted welfare-state and war debt and, ultimately, meant that Britain took so long to recover- especially by comparison to West Germany.

    Congress has tried to get corporate america to employ more people within their own businesses, but this is doomed to failure because it works counter to maximising shareholder value. Share prices go up, when profits go up, and this is usually achieved by greater efficiencies and laying people off. A far more effective system, would be to tax fairly to begin with, and then allow corporations to offset their tax by setting up arms-length management companies dedicated to angel investment and venture capital, aimed at investing in and growing small businesses.

    One of the most successful companies in Britain in the nineties, was Rentokill. The reason it worked so well, was because of the realisation that they couldn’t really achieve cost-savings by sacking the bloke responsible for the actual pest control. Instead, they instituted a continuous system of top-down, rather than bottom-up, redundancies which made the business leaner and more efficient, in terms of coprate management.

    By separating corporate management, into two strands of leaner, softer management, and harder, problem-oriented external management, Corporate America could not only achieve greater cost-saving, and tax benefits under a reformed system of corporation/turnover tax, but also utilise their hard management resources to repair America’s productive economy. This is, effectively, what forward-thinking companies like Amazon and Alphabet are doing already, without the benefit of additional tax incentives. Of course, one would hope that in this ‘new system’ eating and absorbing the businesses you are helping would be prohibited.

    Geary Johansen,
    carol_in_norfolk@tiscali.co.uk

    • Kauf Buch says

      Save everyone the trouble of reading that painfully long blather and just MOVE TO CHINA, where you can enjoy the beloved government-controlled economic system of your fantasies.

  54. GRW3 says

    The fundamental truth is that you can have a social safety net or you can have unfettered immigration. You can’t have both, not successfully.

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