What's the incentive to start looking for work if there are no strings attached on how you can spend money? Is Finland the only country in the world that has 0 junkies, 0 prescription addicts, 0 dads paying child support?
I agree with @aswanson, this is headed for inflation, or an even worse financial disaster.
Side Note: Is it easy to immigrate to and naturalize as a Citizen? I'm buying my ticket.
Why would distributing money per se cause inflation?
So-called "helicopter money" is very good at inducing inflation, because it shifts the equilibrium between "holding money" and "buying stuff". This is the principle behind quantitative easing. But basic income isn't simply a matter of distributing money; the money also has to come from somewhere, and raising taxes (or cutting spending elsewhere) in order to fund BI has a disinflationary effect.
That said, the inflationary and disinflationary effects are likely to not apply equally across all goods; if you raise income taxes in order to fund a basic income system, you'll likely see increased inflation on low-end goods (since the people who purchase them have more money to spend) and decreased inflation on high-end goods (since the people who purchase those have less money to spend).
> That said, the inflationary and disinflationary effects are likely to not apply equally across all goods; if you raise income taxes in order to fund a basic income system, you'll likely see increased inflation on low-end goods (since the people who purchase them have more money to spend) and decreased inflation on high-end goods (since the people who purchase those have less money to spend).
This is true, but it's worth pointing out that it applies equally to anything that transfers wealth from the rich to the poor. You get the same effect from a significant increase in charitable giving from the rich, or a reduction in apartment rents, or an economic boom that reduces the unemployment rate.
And it's assuming that a basic income would actually do that. You could have one that simply replaces the existing tax code and welfare system without inherently being any more or less progressive on net. You could have one that does the opposite -- you could lower the effective tax rate on the rich and have a very small UBI.
How progressive you want the government to be in terms of income redistribution is completely independent of whether a UBI is preferable to means-tested welfare.
Right, I was just taking raising income taxes as an example to illustrate that policies could create zero net total inflation while still resulting in some people seeing an increase in inflation and other people seeing disinflation.
I think the inflation argument is that distributing more dollars would mean more buying power overall, increasing demand, and therefore cost of living increases.
That only makes sense when supply is inelastic, which is not a valid assumption, imo. I can imagine certain things, though, like housing, might be more successful as extracting additional rent from across the board income bumps.
That only makes sense when supply is inelastic, which is not a valid assumption, imo.
No, it makes sense whenever supply is not perfectly elastic. And time scales matter -- most supplies are inelastic over the short term but elastic over the long term, so "helicopter money" will tend to produce a short-term spike in prices due to more money chasing a limited supply, which then levels off at different rates depending on the goods as the supply catches up.
It's fine to argue the economics, but you started from a false premise. Basic income is not a tool for forcing people to work.
Our modern society has the contradiction that many people are expected to work for money, with poverty or death as the punishment if they don't, but there are not enough jobs for these people to do, so poverty or death results.
First-world societies already have people who don't work for money: children, the elderly, new parents, homemakers, the disabled, and the filthy rich. It appears that there is room for more non-working people.
It's hard to know what would happen under universal basic income in a capitalist society, though localized experiments have been promising. But some questions you posed seem to have straightforward answers:
- You make it sound like drug addicts get unlimited money. They get the same basic income as anyone else. Good luck sustaining a drug habit without a job.
- Child support is derived from the premise that fathers are obligated to work and mothers will suffer if they don't. It would be nice to change this state of things.
- Is it easy to immigrate to and naturalize in a country with UBI? Obviously not. It should be incredibly expensive.
> Child support is derived from the premise that fathers are obligated to work and mothers will suffer if they don't. It would be nice to change this state of things.
No it's not. The premise is that a child should be receiving a lot of time and/or money from both parents if it's at all possible. More time means less money, and less time means more money. There's no inherent gender bias.
We're also greedy and want comfort. There's bound to be some people that will use a basic income scheme to not work, just like there's already people in European welfare states that take advantage of the system and avoids work.
Politicians keep trying to tighten the law that regulates unemployment benefits, pensions and other welfare benefits. It only hurt those that who are in actual need, those that try to scam the system are still doing fine. The Danish politicians change the rules for some benefits last year, claiming that it would force people to take jobs. The new law affected more than 30.000 people and managed to get only 400 people to take a job. Most of the people simply aren't able to find jobs or aren't physically able to.
My point is that most people will work, even if it's not fulltime employment. People want nice things, and they aren't going to get that on basic income. That amount of people who will not work don't change, at least not much, and there aren't enough of them that it's worth the effort and cost to try to force them to work.
The trial aims to discourage people's fears "of losing out something", he said, adding that the selected persons would continue to receive the 560 euros even after receiving a job.
So if you get a job, you'll still be receiving the 560 euros. That actually will make recipients go get a job.
What's the incentive to start looking for work if there are no strings attached on how you can spend money? Is Finland the only country in the world that has 0 junkies, 0 prescription addicts, 0 dads paying child support?
I agree with @aswanson, this is headed for inflation, or an even worse financial disaster.
Side Note: Is it easy to immigrate to and naturalize as a Citizen? I'm buying my ticket.