Why even insist on that $12K number in the first place, isn't that like approaching the problem from the wrong end?
It's something that always puzzled me about economic policymaking, regardless of which country; Changes seem to happen at a pace of years and only with static values, which makes reacting to our modern volatile and interconnected markets, in any useful way, impossible.
Case in point the basic income: Ideally the amount of money people get could be linked to the general living costs, adjusted to their area of residence, and some national economic index.
Sure the first one could be abused by people registering in more expensive areas while living in cheaper ones, but in the long run, and economic big picture this would only lead to rising prices (and basic income) in the cheaper areas, generated through the spending by the "cheaters".
Imho something really underestimated is how much of an economic boost a basic income would be, it'd be like the government directly subsidizing general purchasing power, and lot's of that will come back to the government in the form of taxes. It's like the opposite end version of corporate bailouts and tax giveaways.
Looking at a number like 7 trillion from that side, suddenly makes it way less intimidating and way more appealing. It's not like money is some finite resource that has to be mined in deep and dangerous caves; When it's about saving banks, Big Whatever or waging wars, against something or somebody, there always seems to be more than enough of it?
Money & markets are a fantastic system for taking the limited resources we have as a society and splitting them up. We haven't found a system that is more effective at increasing the average living standard.
Basic income screws around with some fundamental structures of the markets. It would be easier to reason about if we knew what resources were being guaranteed by the government back in the real world. It happens that physics cannot be legislated into existence; so we will need some planning to be done to make sure that the spirit of the law can be identified and met practically.
Seen in that light, BI provides the opportunity for a whole new economic policy lever, by channeling new money to people rather than banks.
This is not an apples-to-apples comparison since QE (so far) has been "sterilized" so as not to increase the money supply in the same way as you are suggesting BI would:
"Also, the Federal Reserve has mostly "sterilized" its bond purchases by paying interest to banks for reserve deposits. This removes money from circulation previously added by the Fed's bond purchases. The net effect is to raise bond prices, lowering borrowing rates for mortgages and other loans, without an inflationary increase in the money supply"[1]
They will be different for BI, naturally.
It's not the mechanism, it's the scale of it.
Excuse me being naive but why? It would be a unique situation and as such any predictions of what's gonna happen are purely hypothetical.
Your last point is kind of moot as it could be used to argue against any kind of wage or income increase for poor and middle class "They just all gonna spend it paying their landlords".
If the basic income accounts for "average living costs" then ideally the average rent should be calculated too and factored into it, so landlords can't just jack up rents and expect their tenants to "reach through" their UBI.
A UBI would give the poor and middle class at least some bargaining power with employers, that's already progress. The whole situation about affordable living space becoming rarer and protection of tenants are valid concerns, but you can't expect a UBI to fix everything, different issues need different approaches and solutions.
Rent control and protection of tenant rights are ongoing issues, especially in countries where renting is the prevalent mode of living, as such many countries governments are trying plenty of approaches.
The issue with the US being that it's a rather touchy subject to discuss, but its nonetheless relevant because more U.S. households are renting than at any point in the previous 50 years [0]
So a discussion about that particular topic is most certainly needed, but you can't expect UBI to fix every single problem on its own, no solution is ever as simple as that.
[0] http://www.pewresearch.org/fact-tank/2017/07/19/more-u-s-hou...
Automation.
https://www.theatlantic.com/magazine/archive/2009/09/how-ame...
https://www.amazon.com/Competition-Monopoly-Medical-Care-Fre...
https://www.amazon.com/Regulation-Pharmaceutical-Innovation-...
For example, medication is more expensive in the US right?
Alternatively, the free market has failed to work in certain areas forcing the government to get involved to attempt to fix things. If the free market worked for health care, we'd be using it.
I'm a capitalist, I believe capitalism is awesome, however capitalism doesn't work on everything, just most things. It's not a golden hammer that will solve all problems.
Look at Lasik eye surgery for a counterpoint. Yes, this is regulated by requiring licensed practitioners, but it's not controlled by insurance companies, Medicare/Medicaid etc. The cost for this procedure has dropped dramatically, while the procedure itself has improved in the last decade.
At the expense of generating poverty either in the form of people working two or three part time jobs (so that "costs" like healthcare can be avoided) to barely make rent or abroad, in factories where one needs to extend nets to prevent suicides.
As for healthcare, that has not been a free market in the US at least since WW2.
Yet as of the publication date, 31st December 2006, data indicate that more than 12 percent of U.S. residents still live below the poverty line.
For 2006, a family of four was considered in poverty if its annual income fell below $20,444. For a couple under age 65, the poverty threshold was $13,500, and for an individual living alone, it was $10,488.
Before you say "The Marshall Plan" most of the MP money was given to France and Britain.
To see the result of tightly controlled market, check out Venezuela and the old Easter European communist regimes.
She does a decent job of thrashing out, at length, why the dignity to participate in the free market by innovating and bringing those innovations to market is the thing that created the modern world. In her own words she gives a "full scale defence of capitalism."
Note that a social safety net is not inconsistent with free markets.
Yes. Starting with housing, most people's #1 expense (and, complicating matters, many other people's #1 investment).
A "reset" society would have, at the very minimum, something like a 90% inheritance tax and much much higher capital gains tax, as well as provisions on land value tax so high value scarce land cannot be hoarded as well.
I'm honestly not sure how one can look at the countries who are doing well right now and say what you said. It's like opposite land.
The parent comment is referring to the majority of middle and low income families who's children come of age with zero wealth.
All of the countries doing well have a problem, right now, where middle income earners can't afford to buy homes in the cities people want to live in, while the top income earners are saying things like young people can't afford to buy houses because they're blowing all their money on smashed avocado on toast.[1]
1. https://twitter.com/60Mins/status/864065346516377600/video/1
Also, no need to make your children "rich". Just make sure they have things quantitatively better than you had. Just having a home for their children to subsequently live in without worry is definitely attainable for most people if they don't do anything stupid.
I’m against burdening our young people with debt, for sure, but I don’t see generational wealth as a long term solution to that either.
I think profits from productive use of land (rent, farming, logging, tourism, etc.) is fine. It's the speculation on family residences as if it they were an appreciating commodity (like gold or oil) that seems to be the current issue.
Let it find a way to make a profit with allow free people to decide how to spend their minimal viable income.
Then again, I think the minimal viable income needs to be $30k/year to everyone. A reverse income tax if you will. This would spur more economic development than any other program the government has ever tried.
But that than becomes a painful and complex conversation, talking about huge changes in the structure and possibly quality of real-estate, healthcare, transportation and roads, universities, etc and maybe some core tenets of capitalism.
But there's no way for this conversation to be fruitful and have really big changes - until we have a real crisis - because that's how democracies work in general.
but here's a starting point, anyway:
1. Transforming real-estate, from a system largely aimed at profits, into a system that is focused on offering decent living conditions as cheaply as possible.
2. Inserting disruptive innovation and real cost reduction into healthcare. And yes, like all disruptive innovation , it probably means lowering quality, at least for some time.