The Basic Affordability of Basic Income
Joyce Park stashed this in Economics
Starting to break down the budgeting necessary to make a basic income work out. Baby steps!
It's unfortunate that The Economist made some bad assumptions.
This article is eye opening because it explains how a Basic Income would be an improvement over what currently exists for all but the highest income earners.
So a basic income is basically affordable after all
This is how a universal basic income would actually work. Because inequality has reached such extreme degrees, and because we already spend so much money on existing government programs no longer necessary with a basic income for all, the required price tag is not an income tax increase of 60 percent. It's not even an income tax increase of 35 percent or 25 percent. It's a potential income tax increase of under 20 percent. And because a very small amount of people have an almost unimaginable amount of money at the very top, a basic income could actually decrease almost everyone else's income tax burdens except for theirs.
Keeping in mind our present level of inequality and its negative effects on economic growth, this is actually even exactly what the richest should want, because although they would pay more in taxes for universal basic income, leaving them a slightly thinner although still very thick slice of the overall pie, the slice of the pie itself would grow, leaving even them better off as well. This is largely due to economic multiplier effects where $1 given to those with lower incomes has three times the growth effects on GDP as giving the same $1 to those who already have a great many dollars.
Meanwhile, as if all of the above isn't enough to show how affordable a $1,000 per month universal basic income actually is, it's vital we understand just how much less we can spend as a society, simply by preventing all the costs of poverty that we'd never have to pay in the first place anymore. And if we also care about what we're going to do about all the jobs technology stands to eliminate in the years ahead, we should definitely care about figuring out how we can all be better off in an economy that actually works better with fewer jobs instead of worse off in an economy that's fundamentally broken.
It's disappointing all of this economic complexity in regards to the affordability of basic income is nowhere to be found within The Economist. For this is a discussion we need to be having, and not one to be so easily dismissed as too expensive. Instead, we should consider the distinct possibility that continuing on without basic income is what potentially carries the highest price tag of all.
Yeah the Economist has a bad habit of pooh-poohing any solutions to our economic problems that have the appearance of requiring the wealthiest to give up a greater share of their wealth. I think their basic objection to a guaranteed income, however, is the notion too many people would not contribute. The free rider notion. The thing is, with a guaranteed income, you would be guaranteed to consume goods and services, which would have very definite economic value. Who cares if you spend most of your time playing video games, you're still buying food, medicine, shelter and.... video games.... with your guaranteed income. That said, I also don't believe most people would not find other ways to contribute to society in valuable ways. If fact, I think the majority of people would be freed to contribute in much more valuable ways.
Moreover, given the rise in ever more complex automation and smart systems we need to look seriously at a model that provides a guaranteed income, because jobs will become more scarce for humans in the future. This will be especially true if real sentient artificial intelligence arrives. Humans won't be able to economically compete with cheap robots and super-fast A.I. (that said I think the likeliest scenario is that we evolve initially into a kind of human-machine hybrid. Eventually humans, as we now think of them, will gradually cease to exist.)
The alternative is for wealth to continue to concentrate into the hands of those who already have enough money that they can live on the income generated by their wealth. Under those conditions the world economy won't just continue to slow in its growth, it will eventually start to shrink.