What Time is it? Debt Clock https://elitetrader.com/et/threads/who-needs-the-federal-reserve.333665/page-4#post-4883212
Well, why don't you tell Uncle Sam to get rid of tax cuts for the rich first? Giving tax break to the rich, who can live without it, is okay but to give crumbs to the poor, who otherwise would not sustain themselves, is not? Pigs.
It's practically against human nature to save money. We sure are not saving much now. So what makes you think we will save when we get the free money? That $1000 will go right back into circulation and it will be taxed and returned to the government.
I think it's impractical and unlikely to happen in any kind of real world sense. The idea has merit IF (1) it were implemented in a truly universal way: EVERYONE gets it; (2) it REPLACES the giant morass of all other social services.
When you give out free monies, it comes out of someone else's pockets. Take the Earned Income Credit on your income tax. Someone gets $500 witheld from her paycheck, since, she earned only say $10,000 a year and is married with 2 children, she not only gets $500 as her refund but, $3,000 in all. Where did the extra $2,500 come from? It came from some other US taxpayers pockets. Now, Universal Income is fine if it comes out of the pockets of those championing it. I believe Andrew Yang did give out $1,000 each to some people. I got no problem with him giving out his monies. In fact, those in favor of Universal Income should be required to donate say 20% of their income to a Universal Income Fund to disperse to poor people. Let us start with the homeless people. However, those not in favor of Universal Income should not be forced to contribute. Do that and all the nonsense ends and it would run out of monies soon enough.
Pros: 1. Many people in poverty try to keep their income low enough that they don't lose benefits. This leads to people staying in poverty their entire lives. A UBI would remove this dis-incentive to advance because it wouldn't disappear with increased income. 2. The federal government is incredibly inefficient. A UBI would allow them to eliminate some welfare programs and streamline the process of deciding who receives benefits. Cons: 1. The math doesn't work. There are approximately 250 million adults in the US, and it would cost $3 trillion to give them all a $12K per year in UBI. (We collected $3.33 trillion last year in taxes.) The only way it works is if it's funded by a VAT. 2. Between the implementation of a VAT and increased household income, inflation would be inevitable. No one knows how much it would increase, but there's no doubt the value of the dollar would be diminished. 3. Many people on welfare receive significantly more than $12K per year in benefits. If we eliminated all of these programs, the impoverished would end up being worse off. 4. By giving a UBI to people that don't need it, you're solving a problem that doesn't exist. 5. The implementation of a UBI and a VAT would be a significant undertaking. This would create significant inefficiencies in our federal government. IMO, the cons far outweigh the pros. A VAT funded UBI doesn't really solve many problems. It's primary mechanism would be mass redistribution of wealth. I would much rather see us reform the current entitlement programs to make them more efficient. Maybe look at a basic income for the impoverished that slowly phases out as they approach lower middle class.
UBI cannot work here, because we have an aggressive central bank that charges interest on every single dollar we were lent. We are slaves to the Fed, not to anyone else in the US. In fact, the whole world is now a slave to the US Fed's interest rates, debt...Right? Fuck it, just Plava Laguna it all.
These are all strong points against Yang's UBI, but not UBI in general. Perhaps $1,000 isn't the correct number. However I take issue with point (2). Having family that is on welfare I can tell you they do not make more than $12,000/year. From experience, and excluding fringe benefits such as WIC, I think they collected somewhere in the area of $6,000 - approximately half. This is corroborated by this reference link which, while not a scholarly source, indicates you can expect somewhere around $10,000 a year in benefits. For those on welfare a UBI could be a substantial increase in income. The link also says 39 states have welfare that pays better than minimum wage, which while surprising, indicates an arbitrage opportunity that would need to be repaired before UBI could be implemented. I also take issue with (4) in the context of the middle class. Again, the same argument applies. $1,000 isn't enough to do anything with but it would cover part of my "life" expenses (namely shelter and utilities) which would certainly provide me much needed relaxation in a right-to-work state. Alternatively, child care is a major issue for families in the lower and middle classes. $1,000/mo. would cover a reasonable child care service. My family paid in the area of $1,400/mo. for child care for one child due at a decent place with the cheapest licensed facility in town still being around $1,000. Insurance and re-insurance is very expensive when dealing with children. This could increase the birth rate of Americans and perhaps encourage more people to have children. To point (5) and agreeing with point (1) I addressed this in my original post. The only way it could work is through a VAT and increased efficiency of government spending. Just increasing taxes willy-nilly will not do - the math does not pencil out. Of all your points (2) is the strongest. Inflation is an issue and pegging UBI to inflation could cause a lot of problems I am not qualified to calculate.
re VAT: when I was in Canada, they had a GST/HST which was pretty easy to administer from the business perspective. Now as far as I know, it applies on most everything (few exemptions). I don't know how this formula changes when it doesn't apply to diapers, or only applies to specific things, as I'm sure people will try to game it to avoid the VAT. For example, if diapers are exempt but napkins are not, can you sell cloth napkins as diapers and get away with it? Probably. A VAT is regressive, but then again, in Canada, if you aren't a Liberal, you don't deserve to live anyway.