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Poverty-alleviation programs like food stamps (SNAP), Social Security, and other "welfare" programs are broadly effective at reducing poverty, a new study from University of Chicago researchers found.
The study, performed by researchers Bruce Meyer and Derek Wu, conducted a more comprehensive analysis than most studies, because it used administrative data from the programs' payment records, not just survey data of recipients from the Census Bureau.
[...] For the elderly, Wu said the research found that Social Security benefits "single-handedly slashes poverty by 75%." Social Security's overall effect on all poverty is also enormous, responsible for by far the largest poverty reduction among all these programs, the study said.
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Study: Public Assistance Programs Lessen Poverty
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(Score: 2, Interesting) by khallow on Tuesday May 29 2018, @10:26PM (4 children)
This is a decent argument for UBI. However, we have other ways to solve that, such as tapering benefits at the cut offs so that they don't create such cliffs.
Or we could have non-scare quote unemployment insurance for the haves (or the haves could merely provide for their own insurance for unemployment).
That's kind of interesting, but people can already provide that themselves from their wages.
My argument on that was via inflationary arguments. You're increasing the money supply and money velocity without doing anything to improve the quantity or quality of what that money buys. Further, there would be a modest increase in labor costs from people removing themselves from the labor pool.
So to summarize and elaborate my arguments on the matter. Most, if not all of the benefits of a UBI could be done either by a few needs-based approaches or by just letting people cover their own needs. A particular economic need that is not being met here is business creation which would by itself go a long way to addressing these problems without any society-wide benefits payout. This is an obvious way to increase the demand for labor in a way that is mostly positive. Yet labor defenders and UBI advocates are peculiarly indisposed to thinking about it.
Moving on, for me the huge negative to UBI is that there is no natural level of payout. Create it and one will automatically create a conflict of interest between those who receive the benefits and the future of the society. We see that even with US Social Security (and similar public pension funds and savings programs throughout the developed world). The flaws of Social Security have been known for 80 years, most particularly, that it was pay-as-you-go and benefits couldn't remain as high as they have been set - a substantial reduction of benefits (at least 25% as of present) is required in order for the program to remain viable. So what decade will someone finally get around to fixing Social Security?
UBI is worse in two important ways. First, it creates a massive pool of voters (perhaps even a majority) who will gain from any increase in UBI. Second, there is no institutional limit, unlike Social Security, on what one pulls out. For Social Security, you were limited to a low multiple of your lifetime payments into the system. It's not much of a limit, but at least voters weren't inclined to rob the treasury beyond the usual. For UBI, there is no connection between payout and anything. If the society has been suffering for 20 years because of high taxes required to fund the UBI, it doesn't matter. You will still get your payout and you can still vote for candidates who will promise to take even more.
(Score: 2) by Immerman on Wednesday May 30 2018, @02:40AM (3 children)
>That's kind of interesting, but people can already provide that themselves from their wages.
Somewhere in the neighborhood of half the U.S. population has less than one month's income worth of savings. Many/most of those have less than one week. Maybe that's just evidence that half the population has really bad money management skills (in which case, perhaps a third-party system is justified on those grounds), or maybe you just have a grossly overoptimistic estimate of what the income/expense ratio actually looks like for most people. $27k/year (average individual income) doesn't necessarily go all that far in a lot of places.
As for an inflationary argument- you're NOT changing the money supply - you're simply redistributing the existing amount.
As for a natural limit - you're right, there's nothing in the concept that inherently sets a limit. However - you could set it to something that would naturally follow economic fluctuations, for example: set a flat rate 10% income tax, and then redistribute that equally to everyone. Then a rising tide really *would* float all boats, while a falling tide would hurt everyone. That would give everyone incentive to promote the overall health of the economy, though figuring out how to effectively harness that motive might be a trick.
A flat percentage redistribution would also make certain that only exactly half the population ever "wins", at least in terms of direct economic benefit.
(Score: 1) by khallow on Wednesday May 30 2018, @03:00AM
While I grant that a small fraction of that portion doesn't earn enough to save money, the point of needs-based benefits would be to cover them. As to the rest, if it's not important to them, it's not important to me.
Gets my vote.
I don't buy that argument. At the least, you're increasing money velocity which is inflationary. And if any borrowing happens in order to cover the UBI (or offset federal spending for such), then that is very inflationary.
Which would be fine, until the people in power promise 15%. Or 20%. Or 95%.
10% is a reasonable rate, and maybe one could set up a stable system, say via constitutional amendment that would be hard to game in the above way. But basic legislative law is wide open to such abuse.
(Score: 1) by khallow on Wednesday May 30 2018, @09:08AM (1 child)
And in the places where it doesn't go that far, they tend to earn more than that.
Inflation also is not always global. Putting a lot of additional funds in a sector can inflate prices for things that sector demands. For example, the alleged majority who can't even save a month's worth of income, will spend that UBI like sand falling through open fingers. The increased flow of such money for the services most likely purchased will go up in response.
In all though, this is the best response I've received in years. It's refreshing to read from someone who has actually thought about the problem.
(Score: 2) by Immerman on Wednesday May 30 2018, @02:57PM
Let me add my own update then - I realized after posting that $27k is the average (mean) income - nowhere near half the population makes that much. In fact I couldn't find the median individual income, only for households, but going from the disparity between mean and median household income, median income is closer to $20k.
As for "more expensive places paying a lot more - even in New York City the median household income is only $50k, which if it bears the same relationship to individual income as the country overall, means the median individual income is still in the neighborhood of $20-22k. And of course that's the MOST you can make and still be in the bottom half of the population. Most people in the bottom half make a lot less than that.