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The idea of giving people free money is so radical, even some recipients think it's too good to be true.
Later this year, roughly 6,000 people in Kenya will receive regular monthly payments of about a dollar a day, no strings attached, as part of a policy experiment commonly known as basic income.
People will get to use the money for whatever they want: food, clothing, shelter, gambling, alcohol — anything — all in an effort to reduce poverty.
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But instead of accepting the cash transfers with open arms, many Kenyans have recently been saying "No, thank you." It's a legitimate concern: As GiveDirectly moves into its larger basic income experiment, the last thing it wants is for people to turn down the money.
Basic Income is a concept often mentioned on SN, and this is an experiment to do exactly that. Many potential recipients of the basic income are skeptical about the goals of the experiment, though, and rumors have arisen that it's tied to a cult or devil worship.
Opponents of such wealth transfers argue they lead to indolence, while another school of thought believes they would reduce poverty and directly produce economic stimulus because the poor would immediately spend the money.
(Score: 2) by BK on Monday September 12 2016, @06:40AM
I have no problem with the idea of BI in theory. What I have yet to hear is how a government might get that money in practice. Someone has to pay it in taxes. Who and how?
As for the Nigerian experiment... sure. Go nuts.
...but you HAVE heard of me.
(Score: 1) by UncleSlacky on Monday September 12 2016, @07:45AM
Fiat currencies don't real?
(Score: 0) by Anonymous Coward on Tuesday September 13 2016, @12:13AM
Thats for buying bombs to kill people not for food
(Score: 2) by BK on Wednesday September 14 2016, @04:41PM
An honest answer at least. So this can only work at the level of monetary governance... not a policy option for an EU "nation"?
...but you HAVE heard of me.
(Score: 5, Informative) by theluggage on Monday September 12 2016, @07:52AM
At least in a developed country, the money should come from:
(a) raising taxes - anybody on a decent wage should be paying back the basic income in new tax. Plus business taxes - currently many businesses are being stealthily subsidised by the government's welfare payments to low-income workers, enabling businesses to employ labour for less than its real cost.
(b) cutting virtually all government welfare payments (with a few exceptions for people with genuine additional needs) - and consequently also saving on admin.
Long term, as automation advances, there simply won't be enough jobs for anything approaching full employment and something like this will be essential. This was predicted decades ago, but the waters have been muddied by driving down wages, relatively, for mass labour to keep it cheaper than automation.
(Score: 3, Insightful) by LoRdTAW on Monday September 12 2016, @03:32PM
I think most of that has to do with the fact that automation isn't quite there yet. There are still many processes that a machine cant perform. Mainly fine visual inspection, fine manipulation of parts, and smaller shops that handle low volume which cant justify the cost of automation.
It'll come though. And well have no choice but to implement a social system to keep people from starving. Once a reasonable AI is formed, everyone is in trouble. But not because of terminators, but because now any task can be automated and all jobs are under threat. Once you have robots moping floors, picking fruits and vegetables, assembling cars start to finish, and designing those systems, we're in a whole new era.
(Score: 3, Insightful) by theluggage on Monday September 12 2016, @04:26PM
I think most of that has to do with the fact that automation isn't quite there yet....
...and smaller shops that handle low volume which cant justify the cost of automation.
...and one factor in that is that there's no pressure to invest in automation - let alone do expensive R&D in automation - when the price of labour is kept artificially low by outsourcing it to low-wage economies and/or having a welfare system that enables below-living wages.
Basic Income could even speed up the move to automation if it makes people less willing to work for peanuts: that all comes down to the fine-tuning of the tax clawback rate (how much of the extra income do you get to keep?)
(Score: 2) by CirclesInSand on Monday September 12 2016, @07:40PM
anybody on a decent wage
Love how you say "on a decent wage" rather than "earning a decent wage". It's like they just go to the mailbox and happen to find a wage there. But the term "earning" raises some nasty moral questions, so better to avoid it, and pretend that being "on a wage" is just like being "on welfare", right?
Plus business taxes
Yeah...pretending to tax the "business", not the people who own or work in the business.
currently many businesses are being stealthily subsidised by the government's welfare payments to low-income workers, enabling businesses to employ labour for less than its real cost.
If those so-called subsidies actually provided value to the business, then you wouldn't need to tax the business to recover the cost. You could just end the subsidy. You are trying to argue that because of a make believe benefit of a small amount of value, you are justified to tax a tremendous amount back (and disproportionately) in return.
and consequently also saving on admin
The creation of a new government program that will reduce bureaucracy? Let me know when that happens.
(Score: 0) by Anonymous Coward on Tuesday September 13 2016, @01:42AM
anybody on a decent wage
Love how you say "on a decent wage" rather than "earning a decent wage". It's like they just go to the mailbox and happen to find a wage there. But the term "earning" raises some nasty moral questions, so better to avoid it, and pretend that being "on a wage" is just like being "on welfare", right?
He could have said "Anyone lucky enough to still have a job."
Plus business taxes
Yeah...pretending to tax the "business", not the people who own or work in the business.
The business is a separate legal entity with all the rights that entails, so taxing them is not taking the people who own or work in the business. It's taxing the business
currently many businesses are being stealthily subsidised by the government's welfare payments to low-income workers, enabling businesses to employ labour for less than its real cost.
If those so-called subsidies actually provided value to the business, then you wouldn't need to tax the business to recover the cost. You could just end the subsidy. You are trying to argue that because of a make believe benefit of a small amount of value, you are justified to tax a tremendous amount back (and disproportionately) in return.
Ending the subsidies means people go hungry or without medical treatment and get replaced by the company. What is the lost to the company if that's ended?
and consequently also saving on admin
The creation of a new government program that will reduce bureaucracy? Let me know when that happens.
It's not the creation of a new government program; it's the replacement of many labor-intensive programs with a single, very simple to administer program. This is both directly in the form of medicare, medicaid, welfare, etc. and indirectly in the busy work jobs programs like the TSA.
Your understanding of UBI is on par with your understanding of life in poverty.
(Score: 2) by theluggage on Tuesday September 13 2016, @12:12PM
Love how you say "on a decent wage" rather than "earning a decent wage".
So, people who are on a decent wage but aren't earning it (e.g. [insert the name of your least-respected profession here]) shouldn't pay tax? Context - you might have heard of it. Or you could stop playing silly word games like some sort of libertarian inversion of the SJW stereotype.
If those so-called subsidies actually provided value to the business, then you wouldn't need to tax the business to recover the cost. You could just end the subsidy.
That's the problem with these indirect, stealth subsidies - cutting them directly takes a long time to trickle down to the real beneficiary, if at all. Cut the welfare payments to the "working poor" and they can't afford next week's rent, so first thing you get is public pressure to do something about the poor starving kids and, lo, the payments get put back again. The happened in the UK last year [theguardian.com] ("Tax Credits" is the UK euphemism for welfare payments to low-wage employees) - whether it was cockup or conspiracy (you asked us to cut working welfare payments - we tried) is anybody's guess.
The creation of a new government program that will reduce bureaucracy?
Oh, I agree, the whole universal income idea will probably fail because what actually gets implemented will some kludgey political compromise that attempts to please everybody but completely misses the point of the original idea. In particular, the system would need some sort of fairly degrading remedial "voucher" system for people who prove unable to manage their money, and for that to be fair, the universal income does actually have to be enough to live on, there needs to be adequate provision of addiction clinics, mental health care, affordable housing... However, its not like the current system of welfare payments (even in the free market paradise of the USA) doesn't share those problems - done properly, universal income should be a lot simpler, fairer and possibly cheaper.
Then, there will always be those who simply resent the idea of anybody getting something for nothing and would rather waste taxpayers money in a Quixotic effort to change human nature by trying to limit welfare to the "deserving".
(Score: 3, Informative) by Z-A,z-a,01234 on Monday September 12 2016, @08:21AM
Like most other people you are not aware of the mechanisms of money creation. Most people believe that there is a fixed amount or something and you need to get the money "back" somehow.
While this might have been true in the middle ages, it is no longer the case (maybe 200yrs already).
Money is created when a credit is given (government bonds are having the same meaning). Money is DESTROYED when the said credit is payed in full. There are publications from central banks that describe this stuff in detail. You might also understand why inflation is needed (hint to prevent the system from collapsing).
(Score: 2) by BK on Wednesday September 14 2016, @04:43PM
You'd be surprised what we are all aware of. But I'm not clear how your answer bears on the question.
...but you HAVE heard of me.
(Score: 1) by Z-A,z-a,01234 on Friday September 16 2016, @09:47AM
You've said "What I have yet to hear is how a government might get that money in practice. Someone has to pay it in taxes. Who and how?"
By not understanding how money works, you assume that this is a 0-sum game. We pay X for BI so we need to tax X from somebody.
As a side note, BI would actually help the economy. People will spend most of that money (as opposed to today when you have hundreds of thousands of homeless and very poor guys hardly spending anything).
(Score: 0) by Anonymous Coward on Monday September 12 2016, @09:09AM
Stop giving away the commonwealth for a pittance.
Charge appropriate amounts for radio spectrum, grazing rights on public land, mineral extraction rights on public land (and oil drilling off coastlines), etc.
These properties all belong to you and me.
The gov't needs to stop treating it as freebies and start charging market prices.
N.B. The Alaska Permanent Fund is a basic income notion that has been around for 35 years.
Mostly that comes from petroleum extraction.
-- OriginalOwner_ [soylentnews.org]
(Score: 4, Informative) by TheRaven on Monday September 12 2016, @10:03AM
I have no problem with the idea of BI in theory. What I have yet to hear is how a government might get that money in practice. Someone has to pay it in taxes. Who and how?
One of the reasons that trickle-down economics didn't work is that the less money people have, the more of it they spend. If someone has just enough income to cover food and accommodation, they'll spend all of it. If someone already has two yachts, then at best they'll invest the extra money, but past a certain point that only serves to increase liquidity in the stock market, it doesn't actually help the economy very much.
The other big difference between giving money to rich and poor people is where they spend it. Even if poor people are buying imported goods, they're typically doing so from local shops, supporting a load of local infrastructure.
This doesn't mean that the money is free, but tax revenue scales in proportion to the size of the economy and one of the arguments for BI is that it would increase the size of the economy. The people receiving nothing but BI would not pay any taxes (directly, other than stales tax / VAT), but they'd likely spend most of their money in local businesses, which would pay rates, corporation taxes, and so on, and who would pay employees who would pay income tax.
It's also worth noting that the only people who would be getting the whole of BI as an increase in net income would be people who have no other income (and are not on any existing forms of welfare). Anyone already on welfare would have BI replace that (with low overheads). Everyone else would receive the BI amount as a gross sum, but would pay higher tax on their earned / investment income that would reduce the net amount that they got from BI. Comfortably off middle class people would expect to have roughly the same in increased taxes as they get from BI, people better off than them would see a higher tax rate, people worse off would do better.
sudo mod me up
(Score: 3, Insightful) by AndyTheAbsurd on Monday September 12 2016, @10:41AM
I think you're making a basic mistake about human nature - which is the assumption that a large percentage of the population will simply realize "hey, free money!", quit their jobs (if they have them), and spend the rest of their lives simply mooching off the government and never making enough money to pay taxes; because being lazy is easier than working. However, the fact is that basic income is designed to be subsistence income - enough that recipients will have a roof over their heads and enough to eat, but not much beyond that. And it turns out that sitting around all day with nothing to do is pretty boring (ever tried it? I have - the first couple of weeks are great, but after that, well, there's only so many A-Team reruns you can watch before you want to do something), so most of the people receiving it are likely to spend their trying to figure out a way to earn better money - learning a trade or studying science or figuring out how to set up their own small business. And failing at any of those things is no longer an issue, because they can always fall back on basic income.
Sure, some percentage actually will spend their lives mooching off the government. That's actually acceptable under basic income; one of the arguments for basic income is that the overhead of deciding who gets welfare is higher than the cost of just giving everyone something (note that I'm not arguing if that's true or not - just saying its one argument for it). Another small percentage will active work to scam the system to increase their "basic income"; I think that those people will need to be found and punished.
Please note my username before responding. You may have been trolled.
(Score: 2) by BK on Wednesday September 14 2016, @04:48PM
Actually, I don't make that mistake. Though A-Team reruns never get old. I do love it when a plan comes together.
The question is how to pay it. The idea is that you give to absolutely everyone. How do you get that much more than you already get in taxes? If so, how do you avoid losing a race to the bottom? Do you just print the money and abandon taxes?
...but you HAVE heard of me.
(Score: 2) by Thexalon on Monday September 12 2016, @08:10PM
This isn't complicated, in theory:
Who to tax: The incredibly wealthy who are making hundreds of millions while barely lifting a finger.
How to tax them: Tax capital gains at the same rate as all other income.
If that doesn't do the job, remove the absolutely absurd cap on how much income is subject to FICA.
In practice, the first step is to elect public officials that cannot be bribed, because the current mostly-bribed crowd will never do this to the hands that feed them.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by BK on Wednesday September 14 2016, @04:50PM
I'm good with all of that. The FICA bit is long overdue to (probably) balance Social Security.
The other bits seem promising, but what prevents those dollars from moving to the Bahamas?
...but you HAVE heard of me.
(Score: 2) by Thexalon on Wednesday September 14 2016, @09:50PM
Several options there:
1. Collect them as they leave the stock exchanges in New York.
2. Collect them as they transfer along the wire leaving the country.
3. Put the owners of the dollars in jail until they pay up.
Of course, that would only be possible of the government actually wanted to collect those taxes, and didn't actually think that taxes only were for "little people" (meaning us poor schlubs who aren't multimillionaires, not people roughly the size of Warwick Davis).
The only thing that stops a bad guy with a compiler is a good guy with a compiler.