Re:The Libertarian Case for a Basic Income
by dllthomas on Thursday December 05, 2013 @03:51PM
(#6857125)
The real purchasing power of those just above the break-even point will decline (as will that of everyone else above the break-even point). If the break-even point is chosen to be the poverty line, then we have pushed everyone toward the poverty line, be it up or down, as a first-order effect of the policy. Second order effects might move things up (increased demand from those below the poverty line leads to increased opportunity to meet that demand and "lifts all boats") or down (inflation makes comparable quality of life less affordable)...
The poverty line has been suggested as a break-even point in some BI proposals, but certainly not all.
Re:The Libertarian Case for a Basic Income
by dragonwriter on Thursday December 05, 2013 @06:13PM
(#6858100)
> The poverty line has been suggested as a break-even point in some BI proposals
I haven't seen any proposals that have explicitly targetted a particular break-even point -- most BI proposals I've seen have targetted near-poverty-line levels of BI, which suggests a substantially higher break-even point.
(I've seen a few discussions of targetting a no-nominal-income-effect point considering BI and any necessary revenue measures, typically around the median pre-BI income, but that's not exactly the same as targetting a break-even point as you've described it, as break even is no real income effect, after considering inflation effects.)
Sure, you'd expect some price increase -- anytime a group of people get more income, the maket-clearing price of things they have a non-zero propensity to consume can be expected to increase by basic supply-demand analysis. At the same time, except with completely inelastic demand, the increase in price will not be so much that the amount they are able to afford decreases, by the same analysis.
> would likely hurt those just above that poverty barrier the most as they would no longer be able to afford basic shelter even though they are gainfully employed.
I'd really like to see an argument for this. Since the people "just above the poverty barrier" are going to see the same increase in income as everyone else (basic income goes to everyone in equal amounts -- it isn't a minimum guarantee that is reduced 1:1 with outside income), what is the basis for concluding that the real purchasing power of those just above the poverty line would decline?