Universal Basic Income

[connieb]

Could be. I'd be interested to know how this has worked out in practice when/if something like it has been tried. Do the poor, no longer being so poor, develop smarter spending habits? It's possible. Under the current system, with food and housing essentially handled separately, it encourages odd budgeting behavior. The poor can basically act a lot like kids, whose basic food and housing needs are covered by their parents, so they spend extra money on things that may seem frivolous (designer sneakers, concert tickets, etc.) Yet most of those kids, when they get older and handle their whole budgets themselves, don't respond by spending all their money on the frivolous stuff and wind up homeless and starving. Most, once in control of their full budget, step up their game. Would the poor do the same?

Arkady,

Obviously you don't spend a lot of time looking at people's financials and bank accounts. But, I do. I can tell you that for many people - even those making well in the six figures they will spend all the money in their bank accounts and still be wracking up the credit card charges month after month after month. The "responsible" ones have at least figured out that if they have automatic deductions taken out for savings - or 401K's that that at least stops them from ALSO spending that money.

Yes, many times when kids leave home the end up spending their whole checks on frivolous stuff and end up going back home. As evidenced in that blog EVEN when you know that the money will be there - you make bad choices. That family knew that the SNAP beneifts would still be there - but yet they still made bad food choices or didn't make decisions like stocking up on meat on sale and putting in in the freezer or stocking up on fresh veggies in season and putting them in the freezer. Afterall - they were going to get SNAP the next month too - they could then stock up on other things not on sale this month... but they didn't do that, they didn't think like that.

People in general in my experience do not make good long term financial decisions. They do not think ahead - they do not plan for what they want. They buy what they want when they have it, if they have the money, or as soon as they get the money. This is only exacerbated by the poor when they see this as an extra luxury. But, average income people ALSO spend like this. They just happen to have enough money coming in to not end up homeless. But, why is do you think a person who is a middle class worker and who looses a job could very well be homeless in two to three months? Because the average person is a horrible saver. They are horrible at seeing the big financial picture, they are horrible thinking ahead, they are horrible at going without so they can put some away.

I can not tell you - how many times I have walked into a company or walked into a meeting with an individual in financial distress and said - OK.... well where can we start to tighten the belt and the first thing you hear is that - "there isn't anything - we live on a shoe string as it is......" And, yet, in the end there are always spending habits to be modified. There are always ways of finding some savings from creating from what seems like nothing more money than they thought. But, as a rule humans do not like deprivation. And in my experiences most will not voluntarily decide against the short term high of enjoying a nice dinner out over financial security down the line.

connie

 

[Sunset Rose]

Mr. Arkady,

Only trouble, by the 15th of the month, a good portion of the population, having spent their money on malt liquer, menthol cigaretts, junk food, drugs, gaudy bling, rap CDs, and other cheap crap they don't need would be broke again and asking for more handouts.

At least they won't be spending the money on hookers like you do.

 

[worldlymrb]

Milton Freedman argued for such in the late 70s. Whereas anyone below the poverty level would get a monthly CASH check of 50% poverty level (handicapped/disabiltiy would be higher). So that there is also a incentive to work even a part time job to supplement your income.

 

[Sunset Rose]

An idea that some progressives have been pushing, lately, to try to meet conservatives half-way, is a universal basic income, in lieu of welfare. The idea is that rather than things like food stamps, with all the rules about what people can buy with it and what they can't, and other things like subsidized housing, etc., you just have a simple cash payment the government hands to everyone, with which people can do whatever they want. Traditionally, this has been seen as a conservative alternative to liberal jobs- and welfare programs. Some conservatives like it because there are very low costs: no auditing for eligibility, no overhead for jobs programs, no policing what the money gets spent on, almost no bureaucracy, etc. And the distortions to the market are minimal, since government isn't trying to dictate where the demand and investment will be.

Switzerland, which is an arch-conservative nation by Western European standards, is considering a monthly basic income of around $2800 for its citizens.

http://www.bbc.co.uk/news/business-25415501

For practical purposes, Alaska, one of our most conservative states, already has something like this (although it's quite low, relative to what Switzerland is considering). Fans of the minimum income concept include arch-conservative economic godfather Milton Friedman, and Austrian Economic god-to-the-libertarians Friedrich Hayek.

Of course, in the US, implementation of this conservative-friendly idea would be confounded by the nature of our partisan politics. The moment some major Democrat starts pushing it, it will be labeled "socialism" and the Tea Party crazies will all go around screeching like little girls who got their hair pulled. Before long the very conservatives who promoted the idea will be leading the charge to attack it, and every ninny dittohead on the Internet will memorize the new talking points so they can provide the obligatory denunciations in chat forums. We saw that happen already with Obamacare, which started life as a conservative pet project, designed by the right-wing think-tank the Heritage Foundation, and championed by Mitt Romney. We've seen how quickly support of something by leading Democrats can cause conservatives to turn 180-degrees on their prior convictions. But it's an interesting idea, nonetheless.

I think this is a great idea.

 

[Dawg]

I guess they have a lean couple weeks and, hopefuly, learn to budget better in the future. Someone who blows his check installing a new gun rack in the back of his pickup truck, and then spends the next two weeks eating nothing but rice for every meal because it's all he can afford, will maybe think twice, the next month, about blowing his check on NASCAR tickets rather than budgeting more wisely.

Another interesting idea would be to have this work as a debit card, with money trickled in, electronically, every day. That would naturally tend to favor saving up for purchases, and learning good budgeting habits, since it would give people a very real sense of how much they're allowed to spend every day. It would also make it less likely people would starve, since no matter how dumb you are with your money, when you get hungry enough that the food budget starts to take priority, you'll soon have enough of a trickle of money to more than get you through the day.

"new gun rack"...........they are not very expensive and if they have a truck it more than likely they as well have a job.
"NASCAR tickets"........evidently another thing you have no knowledge of and just wanting to continue posting your bigotry.........if you'd ever attended a NASCAR race, you'd have the knowledge SNAP didn't get them to the race or was needed......OMG, I've even seen lawyers at those races............might, I say might be some welfare folks setting in the 'chicken-bone-seats'........can't say, never set that low at a race.☻

meant to ask.......if these folks try to hire you, do you charge accordingly, or your normal fee?☻

 

[Sunset Rose]

The reason we give section 8 and have SNAP instead of just giving cash - is because people will not use the money they are handed wisely and will instead NOT pay rent and will not buy food - but waste it on all manner of other things.

At least when you pay their rent they have a house. At least when you buy their food -they can eat and even then many don't make good choices which allow them to get through the month and additional decided that instead of being "supplemental" their "snap" is the only money they will use for groceries.

Now, if you want to say give 2800 and say that-s it - that is all you get - there are no free or reduced price lunches at school - there will not be another cent - I could maybe get on board. But, what will happen is that people will be irresponsible with the money they get and then people like you will be right back asking for something else for them and crying for more.

Here is an interesting insight into the spending habits and spending thinking of the poor. http://www.cracked.com/blog/the-5-stupidest-habits-you-develop-growing-up-poor/

connie

Connieb, I saw myself in that article you linked. #5 made me smile. Even though I'm no longer poor I still won't buy more than 4 rolls of bathroom tissue or 3 bars of bath soap at a time! And I use dishwashing liquid for hand soap in my bathrooms. My daughter razzes me about that all the time. Just like the article says, there are some things about poverty that stay with you.

 

[Dawg]

At least they won't be spending the money on hookers like you do.

prove that____________________you can't...........have you seen the liquor stores excepting SNAP.....do hookers do the same.............you seem to know about hookers_____go

 

[Sunset Rose]

prove that____________________you can't...........have you seen the liquor stores excepting SNAP.....do hookers do the same.............you seem to know about hookers_____go

I'm sure your favorite "lady friend" would accept your food stamps, Dawg. Times be hard right now.

 

[marvin martian]

At least they won't be spending the money on hookers like you do.

Why not? Arkady's point is that the government just hands you the cash every month, with no oversight whatsoever, for you to do with as you please.

Of course, in reality, our government would never go for something like that, where they can't exercise complete control over the lives of the people whom they are supporting. As far as our government is concerned, you, me and all the other little people are far too stupid to actually be in control of our own lives.

 

[connieb]

Connieb, I saw myself in that article you linked. #5 made me smile. Even though I'm no longer poor I still won't buy more than 4 rolls of bathroom tissue or 3 bars of bath soap at a time! And I use dishwashing liquid for hand soap in my bathrooms. My daughter razzes me about that all the time. Just like the article says, there are some things about poverty that stay with you.

I thought it was a very realistic way of looking at the "poverty" mentality in spending. My granparents were depression era kids - and family meals are like feasts you can barely imagine. Along the lines of gift giving he mentioned - they grew up poor - so to be able to provide so much food is sort of like their status - their "take that poverty" thing. Most of my friends and family circle around the poverty line so I see this spending mentality again and again. Like you said, some of it just stick with you.

 

[Arkady]

Hopefully?

Hopefully they would be able to do that now.

But they can't.

Why do you think Wal-Mart is so full of takers on the 1st and 15th?

Because they suck at handling money.

The very idea that handing people a check they did nothing to earn will teach them anything about responsible finance is absurd and reprehensible.

I don't know many poor people, but the ones I know are superb at handling money. The difficulty of making ends meet at their income level makes them incredibly clever about stretching each penny. I was similar, once upon a time, when my student loans and rent ate up nearly 100% of my income. I could eat on a couple bucks per day and I knew all the cheapest places to get everything. I clipped coupons, dumpster-dived for furniture, etc. Heck, I even darned my socks. These days, I absolutely suck at managing money. Sure, I have zero debt (I've even paid off my mortgage) and a net worth over a million bucks, but that's not because I'm good at stretching a penny. I lost that skill from disuse. For example, when I think to check my credit card statements, I always notice subscriptions that I keep meaning to cancel, because I don't use them, but I never get around to it. Sometimes I go months without submitting for reimbursement of thousands of dollars of work expenses, meaning significant lost investment gains if I'd submitted earlier and invested that money. My appearance of good money management is entirely a result of an income that covers up a lot of sins. I'm still cautious on the big-ticket stuff like cars and houses (I drive an old car and live in a small house), but when it comes to the small stuff, I just don't sweat it.

 

[Corruptbuddha]

I don't know many poor people, but the ones I know are superb at handling money. The difficulty of making ends meet at their income level makes them incredibly clever about stretching each penny. I was similar, once upon a time, when my student loans and rent ate up nearly 100% of my income. I could eat on a couple bucks per day and I knew all the cheapest places to get everything. I clipped coupons, dumpster-dived for furniture, etc. Heck, I even darned my socks. These days, I absolutely suck at managing money. Sure, I have zero debt (I've even paid off my mortgage) and a net worth over a million bucks, but that's not because I'm good at stretching a penny. I lost that skill from disuse. For example, when I think to check my credit card statements, I always notice subscriptions that I keep meaning to cancel, because I don't use them, but I never get around to it. Sometimes I go months without submitting for reimbursement of thousands of dollars of work expenses, meaning significant lost investment gains if I'd submitted earlier and invested that money. My appearance of good money management is entirely a result of an income that covers up a lot of sins. I'm still cautious on the big-ticket stuff like cars and houses (I drive an old car and live in a small house), but when it comes to the small stuff, I just don't sweat it.

Clever in making ends meet does not mean that a person is financially astute. it just means they've learned to make ends meet.

 

[as seen on tv]

you can have anything you want, as long as you can figure out a way to pay for it.

since the federal government has already indebted every american family to the tune of $150,000, what's your plan to pay for these new entitlements?

 

[Arkady]

you can have anything you want, as long as you can figure out a way to pay for it.

since the federal government has already indebted every american family to the tune of $150,000, what's your plan to pay for these new entitlements?

See the discussion above. In the short term, we can just print more money -- inflation is too low, anyway, so we'd be killing two birds with one stone there. In the longer term, I'd want to see higher upper-class taxes. They're much lower than we had during our economic golden age, and the very rich are pulling away from the rest of the country in terms of after-tax income. This would be redistributionist, and would favor the reformation of a robust middle class, as we had during our period of strongest economic growth.

 

[PhilFish]

See the discussion above. In the short term, we can just print more money -- inflation is too low, anyway, so we'd be killing two birds with one stone there. In the longer term, I'd want to see higher upper-class taxes. They're much lower than we had during our economic golden age, and the very rich are pulling away from the rest of the country in terms of after-tax income. This would be redistributionist, and would favor the reformation of a robust middle class, as we had during our period of strongest economic growth.

upon further reflection... what would recipients have to do to 'earn' this income.

I'm thinking initially...basic societal / communal minimums.. like keeping home and garden/landscape clean and tidy. trash curbed, that kind of thing. community involvement/service, maybe, too?

needs thought...

 

[Jen]

upon further reflection... what would recipients have to do to 'earn' this income.

I'm thinking initially...basic societal / communal minimums.. like keeping home and garden/landscape clean and tidy. trash curbed, that kind of thing. community involvement/service, maybe, too?

needs thought...

When strings start being attached, things change.
If keeping homes and landscapes tidy are a requirement, then you have to have someone police it to "do something" to those who fail to meet the requirement of tidiness. What would the penalty be? Who would enforce it?

The whole gift of an income level reeks of Communism though, and that is where we are headed.

 

[PhilFish]

When strings start being attached, things change.
If keeping homes and landscapes tidy are a requirement, then you have to have someone police it to "do something" to those who fail to meet the requirement of tidiness. What would the penalty be? Who would enforce it?

The whole gift of an income level reeks of Communism though, and that is where we are headed.

well, we're not exactly headed there until some Bolshevik types start beating people to death in the streets and the like.

you know. real communism. not this effete made up stuff..

 

[Jen]

well, we're not exactly headed there until some Bolshevik types start beating people to death in the streets and the like.

you know. real communism. not this effete made up stuff..

Looking over things and the way we are, I'm thinking that this time we'll just have an effete sort of communism. Not sure exactly how that will work out though.

 

[Arkady]

upon further reflection... what would recipients have to do to 'earn' this income.

I'm thinking initially...basic societal / communal minimums.. like keeping home and garden/landscape clean and tidy. trash curbed, that kind of thing. community involvement/service, maybe, too?

needs thought...

I think the idea would be it's just an automatic payment, with no strings attached. What you're pointing towards is also an interesting idea, though. That's more like a guaranteed job. Like, everyone has the ability to go to the government and demand a job at a basic decent income, but then they have to work the way the government dictates, and if they don't, they don't get paid. To avoid displacing private-sector workers, you'd need to tailor those jobs for stuff that's currently neglected by the private sector, for profitability reasons. For example, cleaning up roadside trash, sorting recyclables, etc. Even done well, you'd be able to eliminate traditional welfare programs, acheive some neglected societal goals that incease general quality of life, and you'd wind up with unemployable people developing job skills that make them more valuable and employable in the future. But, it certainly wouldn't be low-overhead, like simply cutting a check.

 

[Alinvegas]

There's that dog whistle again. The list could have included, say, Lone Star beer, chaw, BBQ, ammo, shiny cowboy boots, and country CDs, but those totems of white rural poverty wouldn't have painted the target you were after.

So, if you are calling Ya Ta a racist, you just confirmed that you are as well. Thanks