Originally published at: http://boingboing.net/2017/04/06/poverty-traps.html
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What I like about Basic Income Proposals is the majority of this money finds it way back into the market place - it makes new customer/spenders where none existed before, and that money finds its way to businesses and spurs growth and jobs. This is True Trickle Down Economics, where people are on top, and corporations are below.
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I like what you did there. I have always wondered why people thought that giving rich people more money resulted in more economic activity (money goes into stock market etc.) than giving money to poor people who can’t make ends meet (spends money on basics).
We lionize Henry Ford and his policy and his policy of paying workers a wage that would allow them to buy his cars but fail to learn the lesson he taught.
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Giving the bottom 10% half the wealth of the top 0.01% would result in:
Debts getting paid off
Educations funded
Lots of people kept off the streets
Lots of insurance bought
Shitty old cars replaced with more efficient and cleaner models
An incredible burst of discretionary spending
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To add to this, poor people are people that our cities are very poorly designed for. How do you improve things for them? Give them money and let markets redesign things in their favor.
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In threads like these I like to envision the broken neoliberal implementation of UBI we’ll see in the U.S. (because if libertarians and conservatives are now being forced to talk about it, it’s inevitable):
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The UBI will be funded initially by eliminating all other welfare programmes, including a phase-out of Social Security as the Boomers die off.
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The monthly stipend will be around a base $1600 a month per citizen, adjusted for local cost of living. Minors get a reduced stipend (maybe 30% of the total) until age 18 – heavy parental controls on spending to reflect the conservative view of kids as chattel (they’ll probably try to give women a reduced stipend, too). Wealthy people get the stipend as well as poor people, because we’re fair to job creators in Murka. Similarly, people with jobs get the UBI as well as the unemployed, because not doing so would just reward the moochers.
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The UBI vehicle will be a stored-value card with heavy programmed-in restrictions (see below) that’s topped up each month. Crony vendors will make a fortune maintaining the systems that make this possible.
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At the end of the month, any funds left on the card will be zeroed out. “Use it or lose it” (see below for why)
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At least 50% of the UBI must be spent on rent/housing/household maintenance. Happy incumbent landlords and slumlords, plus the wealthy get a break on homeowner association dues and repairs!
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At least 20% of the UBI must be spent on food from authorised vendors and restaurants. Happy Walmart and McDonalds! Mom-and-pop restaurant or grocery store? Pay up for your terminal and license and support contract or shut down.
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At least 10% per month must be spent on health insurance. Happy for-profit insurance companies! (what, you thought Commie single-payer universal would be at play here?)
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The remaining 20% or the funds are discretionary ones that may be spent at authorised (again, read: incumbent for-profit bigcorp or utility) vendors for products and services like Internet, mobile phones, utilities, consumer goods (on high-interest layaway for big-ticket items), transit/gasoline, school fees, clothing, haircuts, etc. This will do enough to maintain a sham consumer economy despite the dwindling of the middle class and give recipients the illusion of choice and taking personal responsibility.
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Deposits of UBI funds in savings accounts are not allowed, although stock brokerage accounts will be permitted. Given the economy of scale this will allow the markets and commercial/investment banks (a new Glass-Steagall? What’s that?) to continue wheeling and dealing, Wells Fargo style.
And thus, boys and girls, did America’s totally not-socialist UBI end up allowing the rich to get richer and kept the uneccesariat from building guillotines when their jerbs were offshored and automated away.
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Exactly. Also, entrepreneurs can have more confidence to quit their jobs and strike out, known they are not going to end up in the gutter. So it supports innovation and opportunity. Who knows how many with genius potential rot in our slums because the were not lucky enough to be born into middle class stability.
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That does indeed sound like something that would come out of 'Murica, land of opportunity. As always, the devil is in the details and so talking about the details I think is exactly what might help prevent some of them from coming to pass.
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OMFG… I get excited about mincome discussions but you’ve just painted a terrifyingly plausible picture of how it could conceivable even make things worse. Excellent points, TY. Forewarned is forearmed, one hopes…
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Yes, this is why I ride this particular hobbyhorse on UBI. As @anon34399329 points out, forewarned is forearmed if we want to see a UBI system that brings us closer to Fully Automated Luxury Communism.
Once they’ve painted themselves into a corner of 20% permanent unemployment with their race-to-the-bottom “free” market policies this is exactly the kind of UBI that conservative American crapweasels will come up with; they’ll have to since they want to keep the illusion of the postwar consumer economy chugging along while staving off food riots and Madame Guillotine. If you’re wealthy when it kicks in, you and your family will be wealthy forever. If you’re poor when it kicks in, chances are extremely high you and your family will be poor forever. Big incumbent corporations and rentiers and bankers will thrive. Just the way the GOP likes it.
All that’s before the right-wing populists and Xtianists get to chime in about which citizens are “undeserving” of the UBI, and before some techbros adapt the Chinese social reputation monitoring system to the U.S.
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Agree with most of this here, except the second part of 2. Having the UBI go to everyone, rich and employed as well, means that the government doesn’t get to sort the deserving from the undeserving (and companies wouldn’t be able to bid for contracts to do this). If you were the government you wouldn’t want to give up your power to decide who is officially “poor”. If you have a cut-off, when you want to reduce the expense of the UBI program you can just lower the cut-off, or, if you want to be sneaky about it, raise the threshold at a slower rate than inflation (by choosing a measure of inflation that rises slower than others e.g. using the Consumer Price Index rather than the Retail Price Index).
The Universal part of UBI is important.
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I agree, and I’m not arguing it shouldn’t be universal (I’ll leave that to the fascists and bigots). My point is if they’re forced to incorporate “universal” then American conservatives going to make damned sure it benefits wealthy people in some way, even if it’s just covering their monthly household repairs and HOA dues and snacks budget along with their gasoline and Internet/mobile expenses.
If you’re a GOP government you’d much prefer to officially promote the myth that most Americans are “temporarily embarrassed millionaires” instead of admitting that white people are subject to multi-generational poverty in the Greatest, Richest, Most Powerful and Biglyest Nation on Earth™.
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I think we’re being unfair to the GOP, they can talk up their impoverished base AND use their power to destroy their lives.
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But… but… the rich people worked hard for that money!
Just kidding. You want to see hard work, just talk to a poor person struggling to keep their head above water.
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Agreed that there are many ways to approach UBI and ‘the devil is in the details,’ so to speak. You don’t want a UBI model that threatens social security - rather, you want to work with, and enhance, such a program much in the way that Medicare should be expanded to provide real universal health care (aka single payer) as exists in all other developed nations except the United States.
Social security is an incredibly efficient system (like Medicare) - very good for simply spitting out the checks. At the same time, you don’t want to eliminate other poverty programs until you have something that truly replaces those programs - in this case, DIRECTLY abolishing poverty. The UBI, of course, has to be tied into the cost of living in some way so that it is truly liveable and truly abolishes poverty.
You also want this program to be as straightforward as possible - with little overhead. If the government wants to know who’s poor, you have the IRS to fulfill that role. The goal here, however, is direct abolition - much in the way (pre-Civil War) the goal was direct abolition of slavery; a shocking thought to some at the time who believed we had to be ‘incrementalists’ (sound familiar?). But really, the only and best way as the abolitionists themselves know.
Many have proposed that social security be additionally funded in the way that Medicare is. So that has something to do with it here. Another approach, as with Medicare for ALL, is the concept of expanding it downward until it covers everyone, and something similar could be sensibly accomplished with the social security system and especially since the ‘donut hole’ of unemployment is hitting people in the upper middle aged range the hardest.
You should do this, however, hand-in-hand with Medicare for all since you don’t want UBI to become another cash cow for the insurance and pharma industries.
UBI is supposed to be (as originally envisioned, as I understand) meeting 3 key criteria or it’s not reallly UBI. 1) unconditional (not related to employment or income status - everyone gets the same whether they’re sleeping on a park bench or one of Donald Trump’s children - and I know this makes a lotta people cringe, but it’s actually very smart thing to do - you can always go through the IRS and give people perks if they give their UBI back - but leave this qualification ALONE); (2) individual - it’s not related to marital or family status - NO you don’t get more because you’re married or have more children (and don’t misunderstand me, here, because I’m very sympathetic to have enough money to raise children - especially if it’s a single parent or woman who wants to walk out of a domestic abuse situation; (3) LIVEABLE (and here’s where you deal with the children, too, who - NO - don’t get one. By today’s standards, that’s about 35-40k per individual ADULT (only) OR upon EMANCIPATION (which means that includes teens thrown out of their homes, early marriages or teen parents - as determined by family court or automatic qualifiers such as early parenthood).
It’s not enough to live in New York or LA if you’re not employed, but it’s enouugh to help you go develop new towns and cities elsewhere - and share the wealth; i.e. stimulate the economy.
It’s also enough to transition industries in our society that desperately need transitioning - such as the prison industrial complex (whereupon the guards will go willingly off into the sunset to find new and more meaningful lives), fossil fuels, and, of course, ‘health’ insurance sector.
One of the problems with Nixon’s earlier proposal was, from the Dem end, it would have cut jobs without sufficient compensation. So you really have to go, counter-intuitively, IMO, higher - much higher. And you have to stick to the social security system.
Now, that doesn’t preclude using investments and returns. For example, in California - the projected prison budget for one year ALONE (recently) was enough to provide a truly liveable universal basic income to every Californian adult resident for an entire normal adult life span (and then some). How? Because it was enough to provide a lump sum payment to each of these adults, 18-75/80 (whatever it was) that could be invested to provide a return (in this case) of actually 40k per year for the rest of their lives. That’s ONE YEAR of a projected prison budget alone.
So the money is there.
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Wow, G, you really nailed it. That’s a chilling and remarkably plausible outcome, especially all the damning steps of compromise-to-special-interests. To double-down on the concept, don’t forget that all of the aspects of the UBI implementation that cumulatively sink it, were compromises required to get buy-in. Then, after it’s in place for a few years (maybe even months?), all those special interests that got a nice deal, start to tear down the whole thing by frothing up the masses against the side-deals:
“What, I can’t chose my doctor grocery store?”
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It becomes the company town, writ large.
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I recently had a discussion UBI with my cousin, and political feasibility was where we were at biggest loggerheads. Intrigued, I spoke with my old econ prof and we ran some numbers.
Implementation at just 10k per recipient comes in at a cost of nearly $1.5 trillion.
In other words, good luck with that…
Yes, UBI will be provided as the subdollar, a form of under-money that by law cannot be used to buy education, property, or to hire lawyers. Companies with a net worth of over $100M will be able to access a government programme to redeem subdollars into real money.
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They could always copy the British. Savings accounts are allowed, but you can only save a certain amount (£6000 last time I checked) before your UBI starts getting cut. It’s great for the banks, but next to useless for anyone on welfare or in the working classes (For me it’s three months rent, food and bills, at best).
Rich people will just put their extra money into a trust so they can keep getting the full UBI while still having access to the rest of their money.
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