In general, it is basic human nature to be active and productive, and interact with and contribute to a society. The poor have that nature as well, and in most cases they are poor due to a lifetime of adverse family circumstances or perhaps one bad decision ( http://priceonomics.com/what-its-like-to-fail/ ). They can then be trapped as poor simply from having no time to plan an exit and no runway to execute it.
My observation is that the 13 homeless persons in London found that having the cash gave them time away from the full-time activity of surviving so they could think, reflect and plan, and, it gave them the runway to execute their plan.
This concept of basic income has been occupying my thoughts quite a bit lately, particularly when I venture in to San Francisco. Each time I think about it, as a thought experiment before reading this article, I can see far more good coming from it than harm.
What I think, and seems to be supported by the article, is that giving (for example) $1,000/month to every adult in America would play out like this: A family of 4 would have $24,000 per year guaranteed income. If both parents worked minimum wage jobs earning another $16k each, and I do believe they would, they'd have a household income of $56k on minimum wage jobs. They could situate in a reasonable school district, afford to pay more rent for a safe neighborhood, afford reasonable health care and focus on raising their kids. The kids will do better in school, the family can feed themselves less unhealthy food, there will be less anxiety about the basics and less domestic conflict.
The studies in the article -seem- to support that outcome.
$12,000/year per adult not already on welfare or social security would cost about $2 Trillion per year. To put that into perspective, Social Security costs $1.3 Trillion in 2013. Cost of all social welfare programs was $529 Billion. The GDP came in at around 17 Trillion.
The US could afford it if we really wanted to. So what I'd like to hear are the counter-arguments. Is it inflationary? I'd say it has to be. Is it fair? If every American receives it, regardless of their wealth, then I don't see how it would be unfair. Is it realistic? It seems that the US was pretty close to something along these lines in the 60's and Obama finally got universal health care through. Perhaps it is realistic enough to at least put a true, modern pilot program in place and convince ourselves one way or the other. It really seems better than the alternative: Status quo for the homeless and the poor.
"They could situate in a reasonable school district"
Absolutely not! The 10% percentile income will always live in the 10% percentile neighborhood. All it means is housing prices and walmart prices and food prices will simply go up to match the income.
The reason a minincome will go thru, is a large retailer will get the idea that the best way to boost revenue would be for their prices to go up, and the best way for their prices to go up would be for their shoppers to have more money, and we've spent decades working as hard as we can to eliminate all lower and middle class jobs, so ...
I think the poor who felt trapped would be more likely to move than stay put. The incumbent landlords in poor neighborhoods would see a % of their renters move out, and a % of new renters move in, perhaps off the streets. We'd want to study the net effect of that.
Those who moved out would then be moving into areas with higher rents and mixing with those renters. So a dollar-for-dollar rent increase seems unlikely.
Some renters would find they now have enough income to buy a home and some would, vacating apartments for renters from poorer areaa.
Some home owners would find they have enough to afford a larger home and would move up.
But others would invest the new income, or pay for the kids college, or take more vacations, or buy new cars more often.
The economic impact is complex and unknown and needs to be studied. I happen to believe it is a worth an in-depth study and worth spending some of my paid-in taxes on.
> Most of the poor are renters. If you gave everyone $12k more a year, why wouldn't everyone's rent (and other expenses) simply rise by $12K?
If they did, that would be a sure sign of an unregulated supply monopoly which most developed nations have tools designed to address. In a competitive market, increased demand resulting from consumers having more money is expected to result in market clearing unit price, but also in quantity traded.
You see some price increases, particularly in goods disproportionately purchased by the poor, but the increases in average prices would generally be less, proportionately, than the increase in incomes of the groups purchasing them. The exception would be goods where there is an unregulated (or poorly-regulated) supply monopoly.
And if you pull up a graph of the velocity of money, boosting that a big might not be the worst possible outcome given the past couple decades trends (straight down)
My observation is that the 13 homeless persons in London found that having the cash gave them time away from the full-time activity of surviving so they could think, reflect and plan, and, it gave them the runway to execute their plan.
This concept of basic income has been occupying my thoughts quite a bit lately, particularly when I venture in to San Francisco. Each time I think about it, as a thought experiment before reading this article, I can see far more good coming from it than harm.
What I think, and seems to be supported by the article, is that giving (for example) $1,000/month to every adult in America would play out like this: A family of 4 would have $24,000 per year guaranteed income. If both parents worked minimum wage jobs earning another $16k each, and I do believe they would, they'd have a household income of $56k on minimum wage jobs. They could situate in a reasonable school district, afford to pay more rent for a safe neighborhood, afford reasonable health care and focus on raising their kids. The kids will do better in school, the family can feed themselves less unhealthy food, there will be less anxiety about the basics and less domestic conflict.
The studies in the article -seem- to support that outcome.
$12,000/year per adult not already on welfare or social security would cost about $2 Trillion per year. To put that into perspective, Social Security costs $1.3 Trillion in 2013. Cost of all social welfare programs was $529 Billion. The GDP came in at around 17 Trillion.
The US could afford it if we really wanted to. So what I'd like to hear are the counter-arguments. Is it inflationary? I'd say it has to be. Is it fair? If every American receives it, regardless of their wealth, then I don't see how it would be unfair. Is it realistic? It seems that the US was pretty close to something along these lines in the 60's and Obama finally got universal health care through. Perhaps it is realistic enough to at least put a true, modern pilot program in place and convince ourselves one way or the other. It really seems better than the alternative: Status quo for the homeless and the poor.