But "UBI or stfu" was pure flamebait and obviously against the site guidelines, especially since UBI is one of the classic generic flamewar topics. (From https://news.ycombinator.com/newsguidelines.html: "Eschew flamebait. Avoid unrelated controversies and generic tangents.")
"Time to try some trickle up economics" is just ideological rhetoric, which is flame fuel. And "for the love of God" is more internet flamey tropiness.
All in all, that makes for a bad HN comment.
The reason is simple - we are not in a post-scarcity society. I don't know why people think we are. Desirable apartments, land, products and myriad other things still follow supply and demand. If you increase demand, and supply stays the same, you will get higher prices. And no, UBI will not encourage companies to increase supply - with what workers will they do it?
I don't think you can blame that on the stimulus. There are tons of other forces driving up prices, including iBuyers and the lack of affordable new construction. The stimulus barely paid a month of rent for most people.
My preferred policy would be to adjust interest rates to control inflation, and adjust UBI to control interest rates to keep them a healthy distance from zero.
But UBI absolutely will increase demand - and therefore prices until the same equilibrium is met but at a higher price. Basically, the poor will still be poor, but the rich will be poorer too. If a race to the lowest common quality of life is what you want, UBI is the answer. For any other scenario keep looking.
What would you do instead? Continue existing trickle down policies? Use weird neoliberal tax breaks that require an accountant to utilize?
If we continue down the path of the top 10% in the US owning 89% of stocks, we’re going to have bigger problems than slight price increases on essentials.
So what was the big secret? You won't want to hear it. First and foremost it was the tax cuts and jobs act. Yeah yeah, a giveaway for the rich the media says. Nonsense. Second it was getting the government out of the way of the economy and business. Removing regulations was absolutely a factor in the success. And finally it was using our influence to benefit the US first and foremost (tariffs, foreign policy etc). Of course the media has poo pooed all these things, particularly because of who was at the helm when they happened. And I don't expect anyone on HN to agree with me.
The bottom 10% barely got anything: https://upload.wikimedia.org/wikipedia/commons/c/ce/1-Distri...
It just sounds like you just don't know about what else has actually been done? Here's one link; you can find more if you Google: https://ssir.org/articles/entry/is_universal_basic_income_th...
"There are 175,000 24-year-olds in Gyeonggi, and for one year, each receives the equivalent of $220 in a locally negotiable currency per quarter via a credit card."
So 1000 bucks a person for a year. COVID stimulus plus child tax credit went to millions of people... and even the smallest amounts were more than this experiment in SK.
Like... what else ya got?
No, it's the first more-controlled experiment (more controlled than a pandemic!) I could think of off the top of my head. I don't know how to argue this when you seem to have no regard for the idea of controlling for other variables. Nor for the manner (like frequency) in which the funds are distributed. Nor for anything that I can see, other than the sheer amount of money dumped into the experiment. As if you can gauge accuracy by just looking at the amount of money dumped into the experiment? Aren't there a ton of other factors at play that can mess up the results (like the pandemic itself)?
> Like... what else ya got?
Like I said, you can find more if you Google, e.g.: https://en.wikipedia.org/wiki/Basic_income_pilots
But again, I'm not sure what else to cite when your only metric is the amount of money. I'm not claiming there was any other UBI experiment that spent this much money. If/when you consider other factors then there would be much more room for discussion.
>> You sure like to be condescending.
this place gets more and more like reddit every day...
Fewer workers. That's the whole point.
For years, companies have been investing billions into automation and efficiency improvements. Less and less humans are required to do the same work.
Of course, we aren't at 0 yet, but it's trending lower and lower. It doesn't take doubling a human workforce to double output anymore.
If you think of people working in the service sector, like fast food, or retail, I don't think most of them would cut it as a mason.
Aside from that anyone who has a way to make similar money another way would probably do so instead, I certainly would.
So my 20 second research shows the average salary for a plumber is around $50,000, with 90% making under $75,000. I bet more would be willing to be a plumber for the kind of money you mention, but that's not standard.
To be fair, I at least agree in the sense that we need to reexamine this idea of creating/saving jobs as something virtuous in and of itself. I just don't see how there's a lick of chance in overriding human behavior that turns the powerful into opportunists.
2) Wealthy elites will end up just as poor and desperate if there's no one to buy the output of their companies, rent their properties, or do the real work that keeps civilization running because we fall into a social death spiral as more and more people get left behind and the rumblings of violent revolution grows.
https://www.atlantafed.org/economic-mobility-and-resilience/...
A UBI, instead, eliminates these problems and ensures there's always a reason to increase your income. This in turn removes deadweight costs, improves economic efficiency, and can be expected to produce gains that will compound over time.
Yes, letting the poor starve to death might be more fiscally efficient, as long as they don't riot or anything. But most don't view this as a reasonable policy option.
At what point do they have "enough" income? At what point can we stop chasing more money? The USA already has a really high average income. Why do we need more?
You get a subsidized apartment that’s fixed too 30% of your income so long as you make under 150% the federal poverty level. In 21 that was $12,880 for an individual meaning they would pay $322/mo for rent. I’m virtually every area of the country an apartment at that rent is impossible to find. Should this person really make themself homeless to earn more money doing abullshit job?
This is a welfare cliff and they’re everywhere. Healthcare, insurance, transportation, housing, food, clothing, charity, etc.
Housing and meals have natural economies of scale. Even tasks like fetching medicine while you’re sick or waiting for package become easier.
It’s a travesty how many people these days think the standard course of action is to try to live as an island.
Well, parents aren't legally obligated to provide support past age 18, which means many don't. And youths that are wards of the state because of abuse or their parents becoming incarcerated, dying, etc, are not supported beyond age 18. So this is at least a frequent corner case we'll have to deal with, even if social norms change so that more parents support kids past 18.
If you require public assistance for housing and food, I think you don't have enough income.
But public benefits can phase out, leaving you in an awkward place where you have more income but less household resources and become unable to feed your family by virtue of making more.
Public assistance? Like UBI?
By using your definition, it is BETTER if we stop giving people money. I'm pretty sure that is not the intended direction
I think it's important that to whatever extent we decide that some people need assistance, that we do it in a way that doesn't have a cliff and preferably doesn't have any phase-out at all, for the reasons I described.
Yes, the assistance is still economically distortive, but less so than otherwise. Everyone still has an incentive to increase their income and economic output.
This idea came to me from none other than Milton Friedman, in the form of the negative income tax.
For instance, the income distribution of people within Beverly Hills is probably pretty OK - no need to redistribute anything there!
But if you zoom out, you can look at the entire world and realize that the poorest of the USA are richer than many people around the world and should pay their welfare
"realize that the poorest of the USA are richer than many people around the world and should pay their welfare"
Why should us taxes subsidize world welfare (not that it already doesn't)?
And, further, beyond the balance of transfers in absolute dollars-- $1000/mo in California impacts resident life less than $1000/mo in Wyoming.
I don't think this is a strong reason to not do UBI, but it's a confound.
Besides which, the median is a much better measure than average.
If UBI proponents ran on the platform of "eliminate all welfare and replace it with UBI" I would probably support them. But they don't, and they won't, because that's not politically tenable. I don't see a patronage angle where you can buy anyone's votes with that scheme, so it's never going to happen.
We already have the massive wrench in the form of benefits programs and EITC, etc. I say: restructure them to be UBI instead.
Milton Friedman advocated for a negative income tax which is much like a UBI, and most economists agree that giving out welfare in this means-tested way is extremely distortive. Maybe all these economists are "extremely credible": https://mitsloan.mit.edu/ideas-made-to-matter/negative-incom....
> If UBI proponents ran on the platform of "eliminate all welfare and replace it with UBI" I would probably support them.
I favor not quite this. I favor "eliminate most welfare and replace it with UBI". It will cost more, but it will also benefit a larger slice of people.
The proposals from the farthest left generally have UBI mutually exclusionary with receiving other benefits (from Yang et al.). So even there, we're talking about mostly eliminating other welfare.
In any case: refusing to discuss good ideas because we don't think they'll be politically tenable is a recipe for them to remain politically untenable forever.
> Every extant welfare scheme is a vote buying program which you're now nuking.
While some peoples' votes will be bought with welfare money, others will support it because they don't think it's OK to let the poor starve or don't want the poor to riot. E.g. me: I don't receive public assistance. I think welfare programs are necessary (though it's better if most of them are implemented in the form of a UBI).
If I were such a person, I would prefer UBI cash to welfare with strings.
Are you saying you'd prefer to receive benefits in-kind as e.g. housing assistance instead of cash?
Don't conflate "more economically efficient" with "gives recipients less".
Look, well-minding paternalistic peeps are behind the current system of "you can only buy some kinds of food with SNAP" and "you must spend this particular money with only certain providers of housing!" It's not the benefit recipient demanding that they be restricted in how they spend their benefits.
Less strings on the money is A) cheaper, and B) nicer for the recipient. I have no doubt that if you offered any poor person the choice between $600 in cash each month and $600 of section 8 credits, they'd take the former.
But, you know, you might deal with someone spending it all on crack (which is why we currently restrict the usage of funds). At least it'll be economically efficient, instead of them selling their SNAP card for crack for 50 cents on the dollar, like is the current outcome.
It takes entire agencies scores of hours to receive, verify, investigate and cure deficient applications, handle appeals, and execute wage garnishment orders due to their own overpayment/accounting errors -- not to mention approvals.
"Oh we just figured out you made too much money 5 months ago. Sorry bub, you gotta pay back The State the past 5mo of benefits, and re-apply" (with a 90 day waiting period... && Watch out kid, next time this happens it'll be a 180day wait.)
After that's done, they then turn around and do it all again every 6 months because they're forced to re-collect(and vet/process/cure) the same information again via a mandatory "beneficiary 6mo survey".
Sure-- not sure if you're agreeing with me or arguing? It is more costly to give aid with strings attached and complicated qualification requirements, and it is worth less to the recipients.
[Not to mention the costs that this bureaucracy imposes on the recipients. Time that they spend jumping through hoops in a bureaucracy is time and attention they can't spend on bettering their situation].
For example, a dollar spent on healthcare keeping a chronically sick person alive is a dollar that could instead have improved the welfare of all future generations.
Is there a version of this argument that doesn't throw grandpa under the bus?
There's a little bit of "spherical cow" involved though. A more detailed model would recognise that R&D spend is not pure investment, and UBI would not be pure consumption.
Whether non-zero UBI today would good policy or not depends on an enormous number of facts about the world that I think it would be very difficult to come to an agreement on.
For example, at what level diminishing returns from R&D spending kick in, and whether UBI apart from increasing immediate welfare has any compounding benefits (human capital, civil cohesion, education, business starts, citizen science) vs mostly benefiting landlords and netflix.
I expect our priors are quite different.
I think there is a pessimistic utilitarian argument for welfare just because people have concave/risk-averse utility functions (of wealth) and it's possible that the dollar-cheap utility gains for people close to zero might outweigh the higher-order costs, but it strikes me as somewhat fantastical to imagine that there might be meaningful financial gains from a welfare scheme, because people with more welfare money might use the money to read a book or start a successful business or something.
Think of it as a dividend on your citizenship.
Every person a shareholder of the nation.
If you set up a country with this idea from the start (a profit-seeking corporation with transferable shares), it might be a good idea, but probably no net beneficiaries of UBI would have shareholder status.
As the nation gets more productive, everyone's effective UBI goes up.
If the real value of the UBI gets to be too high and too many people stop working in balance with automated labor, then GDP starts to decline and people start getting worse off and increasingly incentivized to find some productive work to do.
Seems like it could end up being a self balancing system.
Common sense. Half of everyone and 95% of beneficiaries of UBI will use additional marginal cash to do things like smoke weed and watch cartoons. Being a beneficiary of UBI is already extremely compelling evidence of inability to efficiently allocate capital (personal or monetary).
> which could have a much higher return than the centrally-planned kind.
I guarantee that forcing me to ""invest"" my labor by giving it away to random people will have vastly lower returns (personal and social) than letting me invest it myself. My suggestion is not to increase taxes and give the money to R&D departments - my suggestion is to not take more of my money at all. The fact that R&D is better than UBI only tells us that if we were to increase central planning at the margins, UBI is almost certainly not the utilitarian way to do it.
> Being a beneficiary of UBI is already extremely compelling evidence of inability to efficiently allocate capital (personal or monetary).
The whole point of UBI is that it's universal and everyone is a beneficiary.
> I guarantee that forcing me to ""invest"" my labor by giving it away to random people will have vastly lower returns (personal and social) than letting me invest it myself.
The fact that organised societies have been much more successful historically than unstructured ones suggests you're wrong.
If I get a check for $1,000 every month and I lose $5,000 on taxes every month, I'm not really a beneficiary.
This is a wealth redistribution scheme. The wealth is being redistributed from people who are self-evidently efficient capital allocators to people who are self-evidently not. (That's a Bayesian judgement, not an absolute one.)
> The fact that organised societies have been much more successful historically
Please, I'd love to hear how "organized society" is synonymous with "welfare programs".
At first order it is, but at first order virtually any policy involves moving wealth around, and at first order any such thing is zero-sum.
> from people who are self-evidently efficient capital allocators to people who are self-evidently not.
Given that the biggest factor affecting income is parental class, that seems far from self-evident. More importantly, if we want to encourage the kind of higher risk tolerance that increases overall productivity on average, taking a chunk of upside to eliminate the downside makes sense. Putting $1m into a 50-50 chance that will produce $10m of value if it works out but leave you destitute if it doesn't is a positive for society, but irrational at an individual level; a tax system that leaves you with $5m if it works out and $50k if it doesn't aligns the incentives better. We already see that people who are lucky enough to have that kind of safety net by coincidence (e.g. rich families/friends) tend to be more entrepreneurial and willing to take the risks that do pay off than people who don't.
> Please, I'd love to hear how "organized society" is synonymous with "welfare programs".
I mean you can go right back to the Roman Empire and "bread and circuses". Organised society has always meant some level of support for those on the bottom.
This isn't actually true; it's one possible explanation that seems OK under cursory examination of the evidence, and it's compatible with American university social "science" dogma, but it falls apart under careful inspection. The overwhelmingly more likely (but incompatible with field political dogma) explanation is that income is most strongly mediated by intelligence, which is mostly genetically heritable. This is why people tend to have similar incomes to their parents. (This persists through adoption; try to explain that as a socially mediated effect.)
Now, that said, this has nothing to do with the fact that people who would most benefit from welfare schemes are the least likely to be efficient capital allocators. We can make the observation that they are not allocating efficiently independently from asking why they are not allocating efficiently.
> Putting $1m into a 50-50 chance that will produce $10m of value if it works out but leave you destitute if it doesn't is a positive for society, but irrational at an individual level
The market already efficiently addresses situations like this which actually exist, using schemes like business loans and outside investment. There is no way in hell some financial knob the government can blindly turn would do as good a job at performing this function as banks and investors who are actually making a conscious decision and putting their own money on the line. In other words, for every marginal good bet this scheme enables, it's going to enable 1000 marginal stupid bets.
> (e.g. rich families/friends) tend to be more entrepreneurial
You've made the same (understandable) inversion of causality as before. In reality, the latter tends to drive the former. Obviously the causality is bidirectional to some degree, but I think people tend to vastly underweight the primary direction.
I agree that society could do a better job enabling outsized performers without means to get access to capital, but we already do a pretty good job and there is no way that some simple welfare system would do a better job than the intentional systems we have now.
> Organised society has always meant some level of support for those on the bottom.
This may or may not be true (I'm not much of a historian), but I do know that "some level of support" doesn't mean "far-reaching government welfare infrastructure". It can mean churches, waqfs, and so on.
This can't explain the whole effect, because:
- The effect of parental income on later income remains even after controlling with standardized test scores.
- Further, parental income seems to increase child IQ a little bit, even after controlling for parental IQ scores.
(Formal, registered) adoption is virtually impossible for lower-class people, so studies have very little coverage of that.
> Now, that said, this has nothing to do with the fact that people who would most benefit from welfare schemes are the least likely to be efficient capital allocators. We can make the observation that they are not allocating efficiently independently from asking why they are not allocating efficiently.
But we can't even begin to talk about capital allocation if we're only looking at the output side and not the input side. The people who would benefit most from UBI would be mostly those who have seen little benefit from capital yes, but the overwhelming majority of those are people who never had much capital to allocate in the first place.
> The market already efficiently addresses situations like this which actually exist, using schemes like business loans and outside investment.
Access to those things is extremely class-gated.
> You've made the same (understandable) inversion of causality as before. In reality, the latter tends to drive the former. Obviously the causality is bidirectional to some degree, but I think people tend to vastly underweight the primary direction.
There are probably real effects in both directions, but there is certainly a significant difference from having a safety net. E.g. see the bump in people starting businesses once they hit the medicaid eligibility age threshold.
> There is no way in hell some financial knob the government can blindly turn would do as good a job at performing this function as banks and investors who are actually making a conscious decision and putting their own money on the line.
> I agree that society could do a better job enabling outsized performers without means to get access to capital, but we already do a pretty good job and there is no way that some simple welfare system would do a better job than the intentional systems we have now.
Maybe. Simplicity, transparency, and reliability can be a real gamechanger. At one point in the pandemic the government was trying to literally give away money to certain categories of small businesses but found it difficult, because the businesses that most needed the support were also those that were least efficient at navigating bureaucracies and processes. For an older example, Ramanujan won a scholarship to an elite school that was intended precisely to support cases like his (intelligent people from poor backgrounds), but lost it because, despite his mathematical brilliance, his grades in other subjects weren't high enough to meet the requirements.
> This may or may not be true (I'm not much of a historian), but I do know that "some level of support" doesn't mean "far-reaching government welfare infrastructure". It can mean churches, waqfs, and so on.
Sure. But that style of non-guaranteed social support increases the pressure on poor people to live in a conventional, legible fashion, avoid downside risks, and conform. We gain little and lose much from encouraging the poor to be (literally and metaphorically) sober and miserable because it would be not costly but merely unseemly to enjoy themselves (especially - though far from only - when that enjoyable thing is potentially productive, but in a way that's not necessarily understandable to those in charge of that welfare infrastructure).
We saw this with the 2009 mortgate crisis - banks got bailed out and evicted homeowners. Had we paid the homeowners, I suspect most would have just brought their mortage current.
The tenants no doubt received direct stimulus payments and never paid a dime of it in rent. There’s a reason why section 8 et al are paid directly to the landlords.
Hell, it’s the rationale thing to do anyway. If there’s a rent moratorium, you’re getting checks from the government, and you don’t have a particular large security deposit, why wouldn’t you skimp on the rent?
The landlord cannot evict you. Cannot call the police. Cannot really do anything. In fact, the landlords only chance of getting paid is to cajole you into signing up for rent forbearance.
One way to alleviate this problem is to have a harsher tax on vacant properties to punish using housing as a store of value and creating artificial scarcity in the market, e.g. like how the DeBeers corporation made diamonds artificially scarce and scammed the world for the past century selling a shiny rock.
https://astralcodexten.substack.com/p/your-book-review-progr...
And if it's done similar to an appraisal they see what market price is for a sale (which combines the value of the building + land). Then they can estimate how much it would cost to rebuild that building if it were completely destroyed. That's the value of the improvements. The remainder is the amount someone implicitly paid for the land.
Someone can always come up with a contrived example to find a short coming in a rule or law. That doesn't make the law not sound or wise.
"Speeding shouldn't be illegal. What if there is a tornado behind you and you need to rush to get away from it, but you go faster than the speed limit to save your life? See, we can't have laws for speeding."
So I'm going to try to say something different.
1. Here is the article that convinces me it is very possible to assess land separate from improvements. It details several strategies for doing so. Also properties are assessed in these ways already in many places. https://astralcodexten.substack.com/p/does-georgism-work-par...
2. Accuracy of assessment does not need to be super high for this idea to work. You just need an assessment with the intent of assessing unimproved land. The tax does not need to be literally 100% of unimproved land value, it just has to be a high percentage. Let's say there is a +/- 30% accuracy of unimproved land value assessment. We can have a 70% tax on that assessed value. Some people would in actuality be taxed at 97.5% of land value, and some people at 52.5% of land value. Perhaps the unfairness of this discrepancy is a true downside. However, one could argue the same about property taxes now.
The bigger issue is with vacant properties being used as cash stores.
Sure you can. Unimproved value of the land is simply the value of the lot as a whole minus the value of building that sits atop (well, improvements aren't always buildings, but that's a simple example). You can approximate it by comparing it against the transaction prices of nearby lots that aren't improved, or by taking the construction cost out of the purchase price of the lot.
> is popular with politicians
Land value tax in general isn't that popular around the world, and Henry George's version of it, where all tax is replaced with just a land value tax, even less so. As far as I'm aware, there is literally no jurisdiction in the world whose sole tax revenue is from LVT. Economists and idealists like land value tax; politicians, who derive a lot of power from the wealthy landowning class (who in turn would be the most hurt by LVT), not so much.
> The bigger issue is with vacant properties being used as cash stores.
Land value tax would be an excellent way to curb real estate speculation.
https://en.wikipedia.org/wiki/Taxation_in_Denmark#Land_value...
Well...kind of. It's pretty bad in a lot of places. There aren't enough homes in the places people want to live.
It has nothing to do with supply - there are more houses now than can be occupied in the US. It has everything to do with misusing the supply we have.
It has everything to do with the supply of housing and how it's been severely constrained over the years.
At some point, enough is enough and you have to accept that there’s no room for more housing without ruining the city. You could focus on reclaiming AirBNBs and vacant housing and you might be able to make a dent in the problem.
Just announce that your city is full and tell everyone to move on. Ruining the city will make landlords money and everyone unhappy.
So Manhattan isn't worth anything to anyone? Funny, I thought it was one of the most valuable and productive places in the country and there were still swarms of people wanting to live there.
This is accomplished by some clever technology the Italians use: they are able to stack dwelling units on top of one another.
In many ways, it was a more pleasant place to live, since I could walk or bike to so many places.
???
There's no need for 'collusion' - term is 'inflation' - which will 100% happen when we start printing money at that scale.
It's unavoidable, almost by definition.
Housing costs are already skyrocketing and this is moving into rents already, at least largely in part because of of massive Fed Stimulus. In the short run it might be better to just give some cheques to people, but not over any period of time.
So you get 0% inflation when we give money to the rich and bail out the banks, but as soon and you give a hobo $50 the entire economy crumbles and inflation spikes, right? Very conveneint ideology
You fabricated a bunch of ideas which have nothing to do with what I said.
'Very convenient fabrication'.
--> If you put a lot more dollars into the real economy by direct distribution, then rents will go up via systematic collusion. Most of that money handed out will be captured by landlords.
That has nothing to do with with what may or may not happen if you concentrate money in the financial sector via whatever means.
The fact that housing is in such tight demand in certain areas is not an argument against UBI. To solve that problem we need to build more houses.
https://www.motu.nz/assets/Documents/our-work/population-and...
That said: "Larger rent increases were observed among those who received larger increases in accommodation payments."
We're talking about a mortgage on the rental property itself not on the landlord's personal residence.
Yes. Everyone in this conversation understands that. There's no relation between the amount and terms on your mortgage for your rental property and the market price to rent a given unit.
If I take a 20 year mortgage does that mean I should charge more rent than if I took 30 years because my payment is higher? Should I drop rent by half when I'm done paying my mortgage since I no longer have a payment? It's nonsensical.
There's especially no reason to expect that rent should cover 100% of the principal fraction of your mortgage payment. Taxes, maintenance, interest, etc. are pure costs which are understandably passed on to tenants. The principal fraction of a mortgage payment is not a cost, it is building your equity.
If rent is covering all costs and "only" 50% of the principal fraction of your mortgage payment you're still making a profit. Because you're paying, let's say, $1000 of the mortgage payment with your own money, but you're getting a $2000 increase in equity.
I know other landlords with multiple units. If they don't think something will be an income producing property, they won't buy.
Price to rent ratio varies very widely between different markets. If you don't want to buy in a market with a high price to rent ratio that's fine. There's simply no rule that guarantees a price to rent ratio such that rent covers all costs plus the full payment on a 30 year mortgage in all markets at all times.
By renting instead of buying, you don't incur any of the costs or headaches associated with with home ownership or repair. There are also plenty of people who are only living in one place for a limited period of time, and additionally, plenty of corporations will rent out homes in decent locations if their employees need to be there for extended projects.
Maybe it doesn't work that way in other markets, but you'd have to be nuts as a renter to pay enough to cover your landlord's mortgage.
A 3 bedroom, 2 bath home in a decent but inexpensive part of the DFW where I live will run you $2K per month. These prices will skyrocket as rental prices catch up to the mortgage market. But just for comparison, 2 years ago that same house would have been on the market for about $220K and would have had a monthly mortgage of about $1200 a month on a 15 year loan or $800 or so on a 30 year loan.
Also I’ve never rented anything for less than what I could own something comparable. Maybe you can in some markets. But generally I expect to pay more monthly. It’s a trade off for avoiding everything that comes with home ownership. Down payments, maintenance, and the overall commitment. It’s hard to just pick up and move when you have to go through the process of selling, making contingent offers on another place, multiple closings, all that.
I have been a renter in NYC, Seattle, and the Bay Area; every single time, I looked up how much the property last sold for and calculated how much a mortgage on it would cost me per month. My rent was normally 70%-80% of the expected payment on a 30 year mortgage.
I was never paying below-market-rate rent, either! Maybe it doesn't work out this way if you're renting in an area with lower average property values?
That is a reason why you invest in the first place.
Property ownership is a market barred from entry by a high buy in cost to account for some risk - but the risk is rather minimal and most properties are going to be value accruing over time. We can observe this by looking at how cheap general property insurance tends to be (unless you're in a really risky area - i.e. building a house in a flood plain).
It is, but I think I would find reasonable getting a mortgage if it does not impose a load on my finance by having it rented.
I paid $1400/month for rent on a place in Alameda, CA. The last recorded sale of the property was for ~$400,000 a couple years before I moved in. That mortgage would be ~$2400/month given average interest rates at the time.
It's a fair point that UBI would result in some shift in market dynamic. But ultimately, most people will still want to get a job to supplement the UBI income, and high demand areas will remain high demand.
Anyways, it'd still be better than quantitative easing, the current approach to keeping the economy running now that they can't lower reserve ratios or interest rates anymore, wherein (roughly) the government prints money to shove into the stock market so people who are already rich keep getting richer.
Traditionally, humans have to live where they can find a flow of capital via the jobs available. If every human has a baseline flow of capital attached to them specifically, regardless of where they live, it potentially opens up a ton of possibility in where people can live, because they can do less well paying jobs but still live a good life.
The reasons for this are complex, but in short it is likely due to a mixture of cost of living (disability benefits go farther in LOC areas), economic opportunity (disability is "more attractive" when job opportunities are scare), and demographics (older, more blue collar, etc...). But regardless of how or why these discrepancies exist, we have essentially created a system which incentives our population to self-sort geographically based on their ability to contribute economically. That is of course problematic in and of itself, but this also means we have a real life pseudo "UBI experiment" that we can evaluate. And if you look at the data, nearly all of the states with high disability percentages are low cost of living states, particularly when it comes to housing prices.
So anyone who complains about how UBI would increase housing costs needs to first account for the fact that large swaths of the working age population are already receiving benefits similar in level to a UBI (disability is about $1600/mo). And despite the higher concentration of beneficiaries in areas like WV, we haven't seen much of any impact in real estate or local inflation. If anything we have seen the opposite.
[1] https://www.mathematica.org/dataviz/state-disability-maps
I'm still not sure whether or not UBI will be a success, but there are some reasonable arguments in its favor.
I have noticed an unfortunate tendency towards fanaticism on the part of many UBI advocates.
This fanaticism does not do the cause of UBI any favors - it just gives it the patina of a policy supported by mentally unstable crackpots, when in fact, a lot of excellent, well-balanced minds have advocated for UBI.
> a lot of excellent, well-balanced minds have advocated for UBI.
results in:
> tendency towards fanaticism on the part of many UBI advocates
In a supply-constrained environment, it's true that a higher capacity to pay would lead to higher prices, but that's not some general truth. If it were, you could say the same thing about wage increases. Any policy goal seeking higher incomes would be useless: it will all just go to homeowners.
Why bother with public education? Sure, it will increase incomes, but it's all just going to go to homeowners.
UBI is a handout. It takes zero effort you might as well lie down and be a rock.
Direct payments to people let them squander it while businesses failed, leaving people unemployed.
UBI feeds consumption, not production, and they are not the same thing. Lots of production is B2B and other aspects far removed from the consumption of the pipeline.
Throwing a few trillion directly at people is popular but demonstrably not as well spent as other countries showed.
"Many governments staved off damage by paying businesses to keep workers employed"
US (growth 2.2%) is 119th out of 202 countries, with Timor-Leste at 19.5% at the top.
Lots of big countries also outgrew the US over this period: Vietnam 7%, China 5.9, Ireland 4.9%, Poland, Hungary, India, Israel, UAE, Luxembourg, Ukraine, Latvia, Peru..... It's not like the US was anything special for growth.
Did you think the US was the country with the best growth? Or even near the top?
[1] https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2...
The people who've finally managed to increase their wages and take-home pay thanks to the full-employment conditions that started in ~2019 or so might have something to say about that.
"for the love of god, let's stop prioritizing saving "jobs" th"
Printing money does not create value and we will generally suffer reduced standard living, some worse than others at least over time.
In the long run, the real economy creates vast consumer surpluses which are generally not even really accounted for. We are actually quite a bit richer than we were a generation ago.
'Direct Stimulus' might be better in the very, very short term to stave of serious harm, but in the 'mid term' it can be destructive, and in the long term it will absolutely be destructive.
Since the first wave of COVID in Canada, a lot of industries have been trying to open, but people have preferred to take their 'CERB' (direct payments) than work, which has accounted for reduced service and is one of the key drivers of inflation.
UBI payments are worthless if there's nobody to stock the shelve and nothing to stock them with.
Don't conflate a policy debate about how we spend the commonwealth with the policy debate about how we collect the commonwealth.
Because that's how UBI will have to come into fruition i.e. under the auspices 'MMT' or some other made up term.
It's 100% politically impossible to raise taxes on the middle and upper 1/3 to to the extent necessary to pay off the bottom 1/4-1/3 of the population to (mostly) do nothing and that's not even starting to consider the instantaneous shock of inflation that will hit the moment it happens.
0% chance of this happening in any country, any nation, any situation - can't happen.
Ergo, the policy has to be hidden into some kind of 'magic money' theory or policy, which will invariably involve a lot of money and credit creation.
We're already seeing the effects of this today.
That's not to say we can't improve a lot of issues with regards to equality including possibly raising taxes and many other things - but it's far more effective to have people work on doing things of value, like attendants in retirement homes, making meals, then it is to give them free surpluses and have them mostly stay at home. UBI is much like Crypto, an interesting idea that does not add up in any meaningful way in our current context.
That's not the idea or reasonably foreseeable effect of UBI.
Rather ambitious near-term UBI ideas aim it right around the Federal Poverty Level, which is the income at which only about 13% of the population would be at or above their current real income if they had no other income, and those people are already largely getting some means-tested aid that would be replaced by UBI.
And, compared to existing means-tested aid, UBI reduces the disincentive to outside income.
You aren't paying the bottom 1/4-1/3 to do nothing.
> but it's far more effective to have people work on doing things of value
That's the central idea of changing to UBI (which allows people to work on things of value without immediately losing side) from classical means-tested welfare (which does not.)
Important point.
Especially people currently on disability are actively disincentivized from doing any amount of work. Worse, they're even disincentivized to do volunteer work out of terror that someone might report them as able-bodied and they lose their benefits, even if they are legitimately disabled and merely trying to contribute the tiny amount that they can.
1) Unions will not permit the dissolution of the systems in place.
2) 'Means testing' should not theoretically be hard - and - it's actually a rational thing to do (so long as you point out the disincentive is not there) - ergo a reform of these programs should yield much the same benefit. But they won't and they don't.
So the first fallacy is to not recognize that the means by which these things are organized has less to do with economic theory and more to do with organizational competence and efficiency - which we struggle with.
But on the other side of the equation:
3) We don't understand the nature of work, poverty etc.. Everyone thinks about homeless people as though they have the same life motivations as the rest of us, grinding away in the system, and that's wrong.
People in tent cities are already mostly opting between 'tent city squalor' and 'Amazon factory drudgery'. Yes, it's hard to get a job from a tent, but even they had the chance to work at the Amazon / Waffle House, they just won't want to do it.
Those people will not come out of tents for $500 a month even with the opportunity to earn more. In an absolute free market situation, they would live in tiny, semi-permanent structures and chill out.
When you mix drugs into the equation, incentives are more perverse. Where I live we have $1K a month means tested welfare, and many homeless opt for living rough during the summer (and taking a flat in the winter) because they'd rather spend it on crack. That dynamic is only exacerbated with more money.
Students fresh out of College, in the area that I live in all have a lot of side interests. I know many of them and I believe the average choice among them would be to take UBI, work on their documentary (which is not very good), go to the gym, and maybe work a few days now and again (serving coffee) for some money for the trip to Africa.
With free Uni, free Healthcare, almost free childcare (this is Canada), you've subsidized the entire cost of living and externalized all of the difficult work, ugly work, and especially the kind of work that takes a lot of time and professionalism to develop. Esp. those 'late stage career people' with significant responsibilities upon which we depend a lot aka 'the legitimate elite'.
Which is where the reality of the economics comes into play ... even if someone could make the argument that UBI 'is affordable' - which I would totally disagree with other than for a paltry amount, say $500 a month, the loss in productivity at the lower end would be substantial, to the point wherein we'd see large swaths of value evaporated, the cost of labour would rise significantly and incentive structures would start failing.
If we're talking just 'economic incentives' than probably just better taxation at the higher (getting rid of loopholes and higher rates on the ultra-rich), and a bump in mimimum wage would make a big difference because the allocation of that 'extra capital focused on the lower end' would still have some market efficiency and it would be oriented towards productivity.
That - and basic, communitarian social measures would work.
I believe UBI is like Crtypo or Bitcon - utopian solution that fails for fairly obvious reasons, like a kind of 'solve the equation' thinking that we technical people have that just doesn't work once you account for the more obvious social features of society.
I don't think there are any magic solutions. We have to raise our kids well, provide some kind of quasi-level playing ground, and accept some people will fall of the edge and have some way to help them and to try to minimize that.
Are people who produce alcohol, cigarets, runs casinos and homeopathy clinics or lobby politicians in behalf of oil companies 'doing things of value'?
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UBI or stfu.
Time to try some trickle up economics.
Also, for the love of god, let's stop prioritizing saving "jobs" that may or may not be necessary for civilization and start prioritizing real people's well being.