SS payments are not the same for everyone. Knowing the distribution of pay rates for SS is very important.

Reducing SS payments, perhaps by a dramatic amount, is not going to go over well.

Likewise, giving straight cash versus Medicare/Medicade does not work. You are basically telling people "I'm sorry, but you can either die of a treatable condition, or starve".

(Unfortunately the latter is more palatable in the current American political climate...)

1k per month for the elderly who have multiple medical conditions, is not acceptable.

IMHO the author is viewing this through the lens of someone who is young and healthy.

It is also odd that the author highlights some jobs (plumbing, cleaning) that are likely to be the last that will be automated. A Roomba is a far cry from a proper janitorial service. While eventually we will get autonomous bots that can do such tasks, we are really far away from that goal.

And finally, statements like

> It is not clear to me why it should be significantly different, as a 12 year old needs basically the same as an 18 year old.

Make me wonder what sort of reality the author lives in. (And only further confirms that the author is likely young, and has obviously never had children!)

The price of child care alone is huge. Medical expenses are higher for children. School expenses exist. Children are not cheap.

The idea, from what I understand, is that income tax would disappear and be replaced with a consumption tax. This consumption tax would operate exactly like sales tax in that it would be levied on all goods purchased. The consumption tax means that any time a transaction takes place - eg. any time someone consumes a good - they are paying for this system. This, then, naturally levies a tax bracketed by level of consumption. Exported goods would be sold without the tax. Imported goods would have the tax added to their price before sale.

This is, obviously, a simplified explanation and the implementation in the American system would likely differ widely from this basic model, but it's likely the template from which any such system would start.

For more information I'd highly recommend Basic Income: The Movie http://www.youtube.com/watch?v=ViywrpAyVdY

SS isn't healthcare, so I don't see the connection.

The only vaguely realistic way to generate a Basic Income situation is, frankly, to raise taxes to provide for a good fraction of the benefit [I think you can get to something like 6k of the 12k on spending cuts].

And always will be.

No, its not a "fallacy", its a proposal. It may be politically difficult or undesirable, but that's not what "fallacy" means.

> Reducing SS payments, perhaps by a dramatic amount, is not going to go over well.

So, don't. Take as a short term cost that anyone who has established eligibility for SS (including people who have paid into it already but not yet reached retirement age) remain eligibility established based on their past earnings, but elimimate any future eligibility. However, SS benefits claimed are charged dollar for dollar againt BI -- no one loses SS benefits to BI, but you can't double dip the two. And, over time, SS fades away.

> Likewise, giving straight cash versus Medicare/Medicade does not work. You are basically telling people "I'm sorry, but you can either die of a treatable condition, or starve".

There is a real problem here, OTOH, it could be addressed (thinking of the smallest change from the status quo plus BI situation, rather than necessarily the ideal solution under BI) with an Obamacare-style health insurance purchase mandate, possibly with a provision for default assignment to a qualified plan -- whether public or privately-offered -- if one isn't actively selected.)

> The price of child care alone is huge.

That might actually change with BI; while I'd generally expect most prizes to rise slightly under BI, its at least plausible, intuitively, that BI would lead to a greater drop in demand for childcare than in supply, and decrease the market clearing cost.

How is that exactly? If you think people are going to stop working to take care of their kids, then the arguments about not changing GDP fall apart along with the whole plan.

This doesn't solve any of the problem.

Health Insurance doesn't magically make health costs go down, collective bargaining for prices certainly does reduce prices, but there is a minimum.

Medicare is government subsidized health care plain and simple. If you remove that subsidy, people will end up paying more.

Yes in a sane country health care doesn't cost nearly as much as it does in America, but old people have a lot of health problems.

There are many people who are unable to work due to age and infirmity and have no other savings and who are forced to rely on SS as a total retirement program, but there are very few if any who do so through choice, even if they have earnings high enough to have SS benefits at the high end of what is possible.

> What is the incentive to work under this scheme?

Even assuming that BI provided a standard of living equivalent to minimum wage (which the levels that have generally been proposed don't, even if one assumes no inflationary effect from BI itself, which is naive), people who have the capacity to expend effort to acheive greater than minimum wage incomes frequently do so under the current regime.

The same incentive exists to do some work in a BI scheme that exists to work to get more than minimum-wage in a non-BI scheme. That incentive is called "money".

Furthermore, because BI would be available to all unconditionally (unlike existing means-tested programs), it would mitigate disincentives to work that exist with existing systems that it would replace.

But TFA said it would replace social security payments. Is that more than minimum wage? at $10 per hour and about 160 hr per month that's $1600 per month. I believe social security pays better than that for many people.

The current welfare system tends to provide a disincentive to work, since if you work you lose your benefits. A basic income system would eliminate that. So you have to factor that in too when thinking about how the incentive to work would change. There are a lot of Americans now who want to work but can't because it would cost them way too much money.

Bu, one of the strong ideas behind basic income (or negative income tax currently exists in some places including the US), is that it does allow people to receive it and still be incentivized to work. A person receiving social welfare (or worse, some sort of disability allowance) loses part or all of their benefits if they work.

Social welfare works like a huge marginal tax rate (sometimes over 100%, effectively) on the first dollar earned.

It's not impossible that unemployment actually goes down. What I expect you'd see less of is people working as long for low wages, the proverbial 3 job poverty. Say you make $6 per hour after tax (basic income would probably require income tax to kick in on the first dollar) and you start with $250 per week. The difference between working a 40 or a 60 hour week is $610-$490.

But, this back of the envelop stuff only goes so far. There are a lot of side effects that are complicated in ways even economists will admit we don't understand.

If anything, people would increase their hours spent working, as there would no longer be steep disincentives to working as benefits phase out and progressive taxation steps in. The only people who would drop out entirely are ones who simply are incapable of producing any real economic value for society, and we have to figure out how to deal with them anyway.

Their argument for BI is that it sharply reduces rent-seeking behavior by lobbyists and special interests, which could reduce quite a bit of pork and wasteful spending. It also gives political cover to remove lots of expensive middle class entitlements, like the mortgage interest tax deduction.

It would definitely take a massive compromise bill -- probably a constitutional amendment -- to make sure that entitlement programs are dismantled at the same time BI is instituted.

It was an incentive created by legislators, so they could increase home-ownership in their populace. Wow, way to turn a government-legislated incentivization of middle-class individuals for home-ownership, into an "entitlement".

It is a benefit (tax credit) given to a specific group (homeowners). Whether the goal is worthy or the means effective is another question, of course, but it is CLEARLY an entitlement.

While I think tax breaks for the rich are handouts (a penny saved is a penny earned right?) I wouldn't call those entitlements either.

I don't think I've made any comment regarding the harm/benefit of this tax-credit. Can't say I have a big opinion on it, or have researched it. Why do you say it's harmful and regressive?

I say that it is regressive because the bigger your mortgage the bigger your tax credit (given some small print about AMT etc), which means that people who qualify for larger loans (read richer people) get a better tax rate.

As far as it being harmful there are some disputed studies about US home ownership rates being much higher than the "natural" economic rate, which subsidizes all manner of non-essential middle men (real estate agents, lawyers, title companies etc) and increases the impact of mortgage rates on the larger economy.

My personal problem with it is that I've seen estimates that it costs the government close to half a trillion dollars. This is a very similar number to Medicaid. Medicaid is constantly being attacked yet the mortgage credit isn't, when basic health care seems like a better fit for governmental spending to me than real estate industry subsidies.

And of course, what the government won't do is give them a second stab at that decision after they cancelled their end of the deal. Especially since making this decision will cause a massive drop in home prices as well, so there's very good reasons for most people to want out.

The second reason is that removing this entitlement will, for a huge number of people, effectively be a tax increase of 20, maybe even 30%. Since most people also have a discretionary spending budget of about 15% of their income, this will effectively mean they go bankrupt (selling the house won't work as it'll drop -a lot- in value as a result of the repeal of this credit).

There is no way the banking sector can absorb a 5% drop in house prices, and this policy sounds like it'll drop them by maybe even 50%.

So no, you can't repeal this without an uproar. There are very valid reasons for these people to feel entitled.

I don't think people are going to avoid homeownership in droves because of $6600 per year -- especially people who are in the financial position to own a home. It would, however, remove some of the perverse incentives that make people buy homes who might otherwise be happy to rent one.

The Democrats are never going to be okay with removing federal programs (even if basic income could cover several of them), and the Republicans won't touch something that would be seen by many as socialism.

I think proponents of BI are ignoring just how radical it is. Basic income is a massive change. It would more or less completely change our society (or require our society to completely change in order to even happen). Democrats and Republicans hardly work together on small issues today, what would cause them to work on something which threatens both parties in various ways?

If the general public supports it strongly enough, then the entrenched political parties will either conform to the public demands or face a realignment which replaces them with political parties that do.

While the US electoral system is structured in a way that duopoly at any given time is essentially guaranteed, it does not guarantee that today's major parties will be tomorrow's. The US has for almost its entire history had two major parties, but major parties have failed several times.

In the basic income scenario outlined, the poor and the elderly will still need subsidized health insurance (assuming the current employer-provided health insurance model) or health coverage of some sort.

Social Security is also something of a dicey proposition. While it would be possible to use basic income to reduce social security benefits, it's role as a social insurance scheme to provide for the elderly couldn't be substituted in its entirety by simple basic income. Social security disability and death benefits would also need some more thought.

As for social security, politically I agree that a basic income that was lower than when many were expecting would be a non-starter. However I don't agree that it would fail a social insurance scheme. The social insurance aspect of social security is preventing elder poverty, a universal basic income does that by preventing all poverty. The regressive formula for calculating social security benefits was a canny political move (making it look more like a pension) but it isn't necessary to its social insurance function.

That is, if it is a great value store why won't people horde it, thus decreasing availability. If it becomes readily available, why wouldn't it become worth less?

For an extreme thought experiment, consider if everyone puts half their income into a perfect store of value for a year, living off the other half, then the next year they live off the savings. Everyone would die of starvation the second year even though they supposedly have just as much value available as what sustained them the year before.

What does that even mean?

    >mutual funds

Non-depreciating: The long-term return of stock indices and some bond indices beats inflation.

Attainable: $1000-$3000 minimum to open an account

Liquid: Funds can be bought or sold easily (with no fee), money is accessible via ACH.

I hope you are not suggesting that gold is a better investment than a diverse portfolio of stocks and bonds.

"I hope you are not suggesting that gold is a better investment than a diverse portfolio of stocks and bonds." There are a lot of people that believe a big government/market crash is coming. And they're absolutely desperate for ways to weather it without eating their own toes off.

Those people would be best served by buying ammunition.

Just as a heads up, most finance folks don't consider being able to buy/sell something easily as the only bar to liquidity. Volatility is also a major component. That is, if something can change value dramatically from day to day it can be considered "illiquid". So lots of people do not consider mutual funds "liquid".

Supplemental insurance even for the elderly would still be reasonably affordable by most people, but it remove the current model where hospitals maximize revenue by providing pointless and often cruel care for the dying.

PS: I say this as someone that recently dealt with significant health issues. The ratio of actual costs vs delivered healthcare in the US is stupid and unsustainable. But, so is trying to write an unlimited check for any reasonably large group. Cap costs and you will see organizations operate within those limits.

Edit: Yes, I realise this is one of those things you can't say, but that does not make it wrong. http://www.paulgraham.com/say.html

Even with an automated workforce, I think there should still be social incentives, and incentives require merit-based income differentials and some concept of "earned income".

We've already witnessed the first large-scale social experiment designed to replace the dog-eat-dog nature of conventional human society, and everyone knows how that turned out. But doing nothing while most jobs are absorbed by teams of obedient robots, and expecting society to rearrange itself optimally with no new ideas, is naive.

This is an open problem, and the solution is not obvious.

A properly-implemented basic income barely touches this, on the margins. The majority of social incentives don't lie on the line between starving and subsisting. I don't see how putting a floor at subsistence level (not even enough to buy a TV, e.g.) would somehow remove (or even appreciably affect) the social incentives around getting more money. People want iPods and TVs and Xboxes and decent cars and bigger houses (both to use and to show off), and there's no reason a basic income would change that.

Basic income doesn't eliminate the concept of "earned income"; one of the major things promoted about it is that, as opposed to means-tested programs, it is fully cumulative with rather than replacing earned income (or capital income, which is outside many definitions of "earned income"), and thus, unlike means-tested benefit programs, does not create a disincentive to other forms of income, including earned income.

> We've already witnessed the first large-scale social experiment designed to replace the dog-eat-dog nature of conventional human society, and everyone knows how that turned out.

Pretty well, compared to the status quo ante, and compared to the slightly-later effort to do the same thing that opposed it. (I assume, by the "first large-scale social experiment designed to replace the dog-eat-dog nature of conventional human society", you refer to the gradual implementation of the modern mixed economy in the advanced democracies of the West, which while a continuous, ongoing process, started before, say, the Leninist "experiment" and its successors.)

something like that.

The intent of basic income is to enable a family of minimum wage earners to have a much less stressful financial existence: 2 minimum wage jobs ($9.00/hour in California) + 2 adult basic incomes at $12,000 each = $61,440. By no means a king's ransom, but certainly gives a family of four a fighting chance to live in a less unsafe place, feed the kids a little better and maybe take a modest vacation once in a while.

Lower financial stress across the entire country will free people up to focus more on raising their kids. Many, many social problems subside when families do better.

It can replace those things. Whether it is desirable is a matter for debate (but I don't see you make the argument that its not, just asserting it.)

> The intent of basic income is to enable a family of minimum wage earners to have a much less stressful financial existence

I disagree: the intended beneficiaries of Basic Income are not just "minimum wage earners", further, your calculation of minimum wage + basic income is misleading since many BI advocates advocate eliminating the minimum wage with the adoption of BI. (More libertarian and less liberal BI supporters tend to do so; more liberal and less libertarian supporters tend not to.)

I would say that the intent of BI as a replacement for means-tested welfare is to (1) increase short-run efficiency but eliminating costs and perverse incentives associated with means-testing, (2) provide a system which is easier to scale up as automation reduces the relative demand for labor as compared to capital, and (3) reduce financial stress generally, and increase labor market fluidity.

Of course if everyone has basic incomes, then everyone can bid more for housing and push up the costs of both safe and unsafe housing.

It isn't clear that a basic income would make neighborhoods safer or make it easier for the poor to move to safer areas.

For (1) the thing we hear is that BI will be a way to deal with the increasing automation of labor and progressive unemployment that it will bring. That's a decent motivation but we shouldn't delude ourselves into thinking that it will solve poverty. Whenever people have choices, some will make bad choices. A cheque for 1K a month can be used wisely or squandered immediately. The net effect is that the power-law distribution of wealth will not go away.

For (2), it's easy to imagine our future being something like Star Trek where people don't have to work but elect to. Again, some will and some won't. When people have a lot of fee time, they can opt for self-enrichment and charitable work, or they can sit on the couch all day (every day) and play video games, or they can cause trouble - delinquency/crime. The path people take is really more influenced by culture than economics. Basic Income will take the issue of what people do with their time and make it a pressing issue for society.

I'm liberal, but I do buy the conservative argument that work engenders responsibility. When work is unnecessary, hopefully there's some other social force that helps us stay healthy as a society. I think that Europe would handle a transition to BI better than the US would.

Basic income will be very politically unpopular not because of some conservative rules but because if you enact it suddenly million civil servants that evaluated "merits" will you their jobs and will not vote for you again ever.

Because people are often afraid enough of the "wrong people" getting things they don't deserve that they are willing to accept the right people not getting things they do deserve to prevent it. ("deserve" here being relative to the value system of the person whose opinion is at issue, to be clear.)

Well what else are we going to do with the millions of people that will literally become unemployable due to automation?

I agree. It does not have wide spread acceptance. Or even wide spread awareness. What I'm saying though (and I think we agree here) is that this is happening...whether the public likes it or not...we as humanity are barreling towards this..social factors will force basic income into existence one way or the other. Thats why I'm saying "This is happen".

Oh and this is coming from someone who will be excluded from any basic income criteria...

Looking at raw numbers is very important, and this article seems to do a good job and make a compelling case. But there is very little mention on the internal economics of government, and whether such a system is actually feasible in some specific government, given the incentives that apply to political behavior.

Automation might make many goods and services readily available without requiring extensive labor, but that also means more people will have access to cheaper goods. Who knows what demands might come up in this new society that people with low skills might be able to cover.

The last thing any government want's is unrest. An you can bet that going late on monthly basic income could cause serious unrest.

You could click the link -- the article here is a set of arguments for it. And there are usually more posted in every thread on the subject.

> Make no mistake, no one wants unemployment, poverty, starvation, poor health, etc.

Actually, plenty of people benefit fromt he existence of these things and the insecurity they cause in others, so I think the "no one wants" claim is false.

> People seem to treat basic income like a panacea

Never seen this. I've seen people directly address how basic income addresses particular problems experienced by government programs that exist to address some of the same problems now. I haven't seen it treated like a panacea.

> Why don't we give people money instead of food stamps? Is it because it was politically untenable? No, it was done because giving people food stamps (actually, now debit cards redeemable at grocery stores) is significantly more effective than just giving cash at solving hunger issues.

Evidence?

> I didn't even get to the negative incentives it creates, which is a whole other can of worms.

Basic income eliminates negative incentives inherent in the means-tested programs it replaces.

> For example, subsidizing income on the lowest level generally leads directly to price inflation, which is highly regressive.

Basic income is an across the board increase to income, not a targetted increase at the lowest levels. Further, the regressive impact of price inflation is only an accurate description if you assume it occurs independent of income changes; to be regressive with income changes, the percentage increase in prices would have to be greater than the percentage increase in income at the lowest levels.

A lot of evidence points to this not being the case: http://www.givedirectly.org/evidence.php

People actually do very well when given the power to make their own decisions about where to spend their money. There are, or course, arguments against direct aid, but it isn't nearly as simple as you make it out to be.

From the perspective of someone outside the US, the food stamps program always seemed totally weird.

This is already the case. Except this solution eliminates a lot of the existing opportunities for corruption by generally simplifying the model.

> There will absolutely be people who abuse the system and use this money to not cover their required expenses and use it for a variety of things they don't need.

It's a thousand bucks- pretty hard to live large on 1k. Besides, comparing the issue of poor people abusing handouts to corporate welfare is molehills to mountains. If your concern is abuse having a detrimental impact on the society as a whole, don't look at poor people.

Absolutely, I agree that the corporate welfare is absurd and I was completely against the bailouts. I'm not singling out poor people but rather abusers of the system. I completely understand needing welfare to help you get you back on your feet after being let go from a position. I would also hope that people can budget better in the case of no work for a while.

But you're just assuming that this exact plan gets implemented, and then gets followed.

I am sure that, if it were implemented, there would be many exceptions and special cases. I don't agree that all those exceptions or special cases would be bad or to serve "special interests." EX: severely disabled people may retain the services they used to receive through discontinued social assistance programs as it would be unrealistic to support their increased needs out of the same pool everyone uses (as we've already decided their increased needs should be supported).

I also expect there would be people who mis-managed the money, just as there are those who mis-manage the support they receive through the current US social net.

However, considering how hellishly complex the current systems are, my gut feeling is that both the problems you outlined above would be reduced. The straightforward nature of such a program would make it vastly easier for people to access the services they get for their money.

The question you should really ask is if BI seems like a better answer than the current system.

P.s. I'm not sure how I feel about BI, but I think your objections aren't the biggest worry.

I agree it doesn't look like a policy they would support, but I think they get there using the following axioms. 1) It's better for me if there is a functioning common society 2) People will do anything to survive 3) People without sufficient resources will gain them however they can, often inefficiently 4) I eventually pay for externalities

These assumptions lead to the conclusion that it's in their interests to have an efficient system to fulfill the basic needs of everyone. There's some grim logic that say that killing people would be cheaper, but most people are repulsed by it and it's often not true in practice.

Many libertarians are not.

> Basic income is basically a monetary redistribution

OTOH, for many libertarians, its a more liberty-preserving one than means-tested welfare programs that it would replace.

> which aligns more with socialism than anything else.

While in the US, libertarianism is often associated with right libertarianism, and socialism is often associated with Soviet-style communism and other authoritarianisms, libertarian socialism is a real thing.

Libertarian socialism is real, but does not represent the most popular use of the term libertarian. I'd also say the same thing for anarcho-capitalism, which is also often put under the libertarian umbrella.

Libertarians who are not opposed to basic income are not exclusively libertarian socialists. To understand this, its useful to understand that BI isn't on top of existing programs, it replaces programs that involve government making more choices about who gets benefits, and what form those benefits take.

And judging by any recent history, availability of easy money, specifically, availability of guaranteed easy money will encourage vendors to sell products as "free to you, just sign these papers turning over the next 9 months of your basic income to us".

  > My second problem with this is those who mismanage their 
  > money. There will absolutely be people who abuse the 
  > system and use this money to not cover their required 
  > expenses and use it for a variety of things they don't 
  > need.

Edit (added my thoughts):

Person A works long hard hours to achieve something. Person B does not. Person A subsidizes person B. I don't agree with that. It's called robbery.

It's that simple.

  > Person A works long hard hours to achieve something. 
  > Person B does not. Person A subsidizes person B.

More "detail" added above.

No, you have plenty of company. A basic income that isn't based on merit is a political hot potato for reasons that should be obvious.

> I personally don't trust my government (US) to implement this properly without any special niches carved out for someone.

That's one problem, but a bigger problem is that, for those who have jobs they don't like, or who think working for a living is beneath them, this offers an incentive for narcissism.

> At the end of the month if they don't have any money left how will they cover their necessary expenses?

Oh, that's easy -- more basic income. :)

Yeah, there are still going to be some people who go out and buy beer every morning. You can't fix everything. "Not perfect" isn't really an argument either, unless the person making it has a demonstrably perfect alternative.

If someone is provided the resources they need, and still cannot make their life function, they need some kind of help other than "more resources." Being more able to identify these individuals and provided more targeted assistance is actually one of the positive things about a BI program.

No, it's "we're all paying for it". I'm in a high enough tax bracket that I wouldn't benefit (financially) from a basic income, and neither would the vast majority of my friends and relations. I'm still in favour of one, because I think it's better for society overall.

Voluntary and opt-in programs are ludicrous for taxation. The benefits produced by the spending of those tax dollars are universal; roads, healthcare, public education, law and order, etc. are critical to a functioning society and would fall apart if anyone could just choose to freeload off those of us with sense.

Especially when that piece of earth is on, say, the other side of the country from the person the piece of paper says owns it.

That's a form of government wealth redistribution that most libertarians seem to be a fan of.

In anarcho-capitalism, people apparently have property rights to land that "he occupies and puts to use by means of his body, provided only that no one else has already occupied or used the same places and goods before him", per Wikipedia. Property rights defined on this basis (which is to say, none, as there is no such land in the real world) would somehow be enforced by private courts, maybe with use of force by everybody when everyone agrees with each other, somehow? What.

The solution isn't at all obvious. I will say this -- anyone who comes up with a workable solution that passes muster with the various political forces at work, will deserve his or her resulting fame.

Also, we need to reform corporate taxation. That would reduce wealth disparity and ensure stability of the social safety net.