Moving towards a Basic Income

New member here- just joined and thought this would be a great way to kick off some discussion. Here goes nothing

Today, we live under government welfare/aid policies that have resulted in much waste, due to bureaucratic overhead. Expansion of these policies have only led to more waste, and more deficit. Now, any liberal would tell you "Hey, these policies work though!". Indeed, anytime you give people aid, there is no logical reason for poverty to decrease, but at what cost have these policies succeeded on?

So here comes the basic income- (while these numbers are somewhat up in the air, the point remains) we can simply give 10-15K to all tax-paying adults - just enough to meet poverty levels, and instantiate a more simple progressive income tax (where below a certain bracket you don't have to pay into the system).

What are the benefits?

1. Eliminate Social Security, TANF, and other extraneous Welfare Programs - Eliminating their deficits
2. Government Overhead becomes close to nonexistent- A lot less cost than current system
3. End specific subsidization of certain markets (Food stamps are an indirect subsidization of grocery stores, for example)
4. Give more freedom in the market for those in need
5. Shift unnecessary burden from small businesses- Minimum wage would be unnecessary (More efficient free-market -> More employment)

What are your thoughts?

 

Sounds like wage and price fixing reminding one of the old USSR or Cuba.

How well did the USSR work out? Is Cuba a paradigm of desirable policy?

 

In what way does guaranteed income have to do with market prices?

 

Unlike most other programs, SS has its own revenue stream. Modest adjustments can return it to solvency though I would support bigger benefits by making it income-contingent.

I don't know how you would guarantee an income without government overhead. If I elect to take the money instead of working/can't work, I am still going to need to apply, be issued the money, be monitored for fraud etc. Not sure who you really envision paying this money.

Any time the government spends money for goods and services, it is "subsidizing" someone. I have no problem with food stamps so much as I do the lack of fraud enforcement against the individuals who receive them.

Not exactly sure what you mean by this, but I suspect I probably disagree if it is what I think you mean.

Why would this result in a need to eliminate the minimum wage?

I oppose giving anyone a "right" to free money. It would be demotivating for people trying to work their way out of poverty and would just drive up prices soon enough it becomes a wash. Whatever your basic income is is what basic rent will cost in time.

 

Taxcutter says:
How do you fix wages if you don't fix prices? That was Morsi's mistake in Egypt.

 

I don't understand (honestly). Why would you need to fix a price? And how would it be fixed?

 

If wages are fixed and cannot respond to rising prices, the fixed-waged consumer is shut out of the market.

 

Or under Nixon.

 

But this system is sustainable and makes more sense by replacing many programs with one overarching program that can simply be limited to the domain of tax collection. It's clear redistribution of wealth, but it is done in a way that it is to improve on the current system so that in the end, people from all across the board are paying less.

With a basic income, there is no need for a minimum wage- since a minimum wage is mostly to provide employees with a base amount of money that they can utilize to survive. Also, it wouldn't be as demotivating to people who are in poverty, if anything, the greater economic freedom would lead to more varied choices in personal spending- would lead to demand in markets outside of grocery stores, and would allow the impoverished to make decisions based on their own needs. For the middle class and small businesses, the basic income would probably break even with most other taxes paid into the government, which allows more money for personal use/investment.

 

Since our current national debt reflects basically our welfare spending since LBJ, I am skeptical a tax payer would see a nickle less in taxes unless they are receiving the earned income credit. Beyond that aspect, consumers make irrational decisions and businesses make increasingly sophisticated exploitative decisions, so your perhaps well intended solution would not eliminate need or poverty, though I suspect that eliminating the minimum wage would bring down the US economy.

 

In what way would eliminating a minimum wage bring the US economy down? A minimum wage is just another price control that hampers the employment of the unexperienced and keeps smaller competitors outside of the market - taking out a minimum wage would increase opportunity for the impoverished.

While an increase of minimum wage leads to larger amounts of money at the hands of employees, it leads to either higher prices, layoffs, or both for businesses to make up the difference of the cost -> Inflation. With a basic income, you increase money at the hands of employees, increase employment opportunities, and increase competition with those opportunities.

 

No, it wouldn't. That is a lie.

No minimum wage will only result in larger profits for business owners. Trickle down neoliberal economics never worked.

We are a consumption economy. Over 70% of our economic growth is based on consumption. With more MONEY for employees to spend, there is more economic growth. History says reversing or eliminating minimum wage will just put more money in the pockets of corporations and business owners, and less money in the hands of the people.

I understand the THEORY behind lowering minimum wage. However, I also understand human nature. Wealthy people and business owners are more frugal. More revenue in their hands means less revenue spent. The profits just don't trickle down.. point blank.

Lowering the minimum wage will increase poverty and lower the standard of living in this country.

 

The fallacy with your line of reasoning is that you assume that the relationship between the the employee and employer is somehow shifted to benefit the employer moreso than the employee. The key is that the relationship has to be mutual. If I have to choose between working at either company A or company B and company A is willing to pay a higher price for my work, than that of company B, then it will be at the loss of company B when I choose to go to company A, and they may see that they need to raise their wages to meet employee competition.

If what you are saying is true, then why are most businesses paying above minimum wage anyway?

 

Taxcutter says:
At least Nixon and (most of) Congress wised up fairly quickly.

I don't think the Soviets ever figured out it was bad policy.

 

It is my opinion The Crook was The Crook and the crap he did caused many of the problems we are having now. Killing Bretton Woods and establishing the dollar as the reserve currency has and will continue to bite us in the ass.


At the time I got caught with his wage freeze and it ate my lunch.

 

This is a great question. If employers are frugal and are only limited by the minimum wage in how little they can pay their employees, why don't all employees only earn minimum wage?

 

If there were no minimum wage, would all wages drop to $0.00 per hour? Why, or why not?

 

Taxcutter says:
Nixon and the Democrats of his day had many faults, but they did figure out quickly that wage and price controls were a bad idea.

The Soviets never figured that out.

The Cubans never figured that out.

Government-determined wage and price controls are a horrible idea and anyone who advocates them deserves no further credibility.

 

.................. serious questions receive serious answers, Mr. Longshot.

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Minimum wage isn't a government price control... it is a BASELINE MINIMUM standard. Without it, we are one step closer to China. You want children working in factories for $3 / day?

 

Something like that would be good. I'm more partial to the negative income tax.

 

Skorpius 7,

The basic flaw in your (admittedly good-intentioned) proposal is that it would eliminate several dozen fat, bloated government bureaucracies.

The federal government will never willingly give up any of their hundreds of fat, bloated government bureaucracies, and all the thousands of fat, bloated, useless government servants who are drawing fat, bloated government paychecks for doing NOTHING for the poor people.

It's like a maxim;
government can never shrink, it can only grow.
It has become THE BEAST THAT MUST BE FED.

 

I'm a big fan of a basic income guarantee, and have made my own thread in the past about the negative income tax, similar to what was proposed by nobel prize winning economist Milton Friedman. I like it for the fact that it sets a social safety net that reduces the costs of state middlemen, while eliminating the welfare trap scenario (where one is left better off making less money so they can remain on welfare)

 

It's an absolutely serious question. And the important part of the question is why or why not.

 

A wage is a price contract between and employee/employer. When you make a minimum of it, you are setting a price control.

"Price controls are governmental restrictions on the prices that can be charged for goods and services in a market."

 

Taxcutter says:
Setting a minimum is a control measure.