Colleges in Dire Financial Straits

[marshwiggle]

The efficient solution would be to stop all subsidies to tertiary education

The efficient solution would be to simply have everyone who can't contribute enough to the economy more than what it would take to give them a minimum standard of living - uh - raptured.

Efficiency isn't everything.

The question is how we take care of the half of our population that is disabled - all the "essential" workers who clearly aren't (at least until all their potential replacements are raptured), given how the economy can get away with treating them.

This is where a UBI has potential benefit. If everyone gets a baseline income, and unemployment, welfare, disability, old age, etc. benefits go away, then everyone is better off financially by every dollar they earn. There are no clawbacks or thresholds to make people have to calculate whether earning something is worth it. On the other hand, because of the baseline income, losing a job or getting injured isn't an immediate economic crisis.

[dismalist]

The efficient solution would be to stop all subsidies to tertiary education

The efficient solution would be to simply have everyone who can't contribute enough to the economy more than what it would take to give them a minimum standard of living - uh - raptured.

Efficiency isn't everything.

The question is how we take care of the half of our population that is disabled - all the "essential" workers who clearly aren't (at least until all their potential replacements are raptured), given how the economy can get away with treating them.

This is where a UBI has potential benefit. If everyone gets a baseline income, and unemployment, welfare, disability, old age, etc. benefits go away, then everyone is better off financially by every dollar they earn. There are no clawbacks or thresholds to make people have to calculate whether earning something is worth it. On the other hand, because of the baseline income, losing a job or getting injured isn't an immediate economic crisis.

Which is why I'm for a UBI [though details matter].

[secundem_artem]

The efficient solution would be to stop all subsidies to tertiary education

The efficient solution would be to simply have everyone who can't contribute enough to the economy more than what it would take to give them a minimum standard of living - uh - raptured.

Efficiency isn't everything.

The question is how we take care of the half of our population that is disabled - all the "essential" workers who clearly aren't (at least until all their potential replacements are raptured), given how the economy can get away with treating them.

This is where a UBI has potential benefit. If everyone gets a baseline income, and unemployment, welfare, disability, old age, etc. benefits go away, then everyone is better off financially by every dollar they earn. There are no clawbacks or thresholds to make people have to calculate whether earning something is worth it. On the other hand, because of the baseline income, losing a job or getting injured isn't an immediate economic crisis.

Which is why I'm for a UBI [though details matter].

Any Canadians on the Fora remember Réal Caouette and the Social Credit Party back in the 70's?  It's scarcely a new idea and if you are into development studies, you'll be aware of a number of fairly successful conditional cash transfer programs in Mexico and other countries.  Turns out one way to avoid poverty is actually giving people money.  Who knew???

[Mobius]

Prosperity Certificates. The few UBU experiments have been limited to providing money to what benefits you already get. I haven't seen any experiments where you'd get a certain amount of cash in lieu of other benefits. I don't know of any developed countries besides the U.S. that has a SNAP-like program. Other countries are more generous with cash payments and have better housing benefits than the U.S. does.

[Stockmann]

The question is how we take care of the half of our population that is disabled - all the "essential" workers who clearly aren't (at least until all their potential replacements are raptured), given how the economy can get away with treating them.

This is where a UBI has potential benefit. If everyone gets a baseline income, and unemployment, welfare, disability, old age, etc. benefits go away, then everyone is better off financially by every dollar they earn. There are no clawbacks or thresholds to make people have to calculate whether earning something is worth it. On the other hand, because of the baseline income, losing a job or getting injured isn't an immediate economic crisis.

Which is why I'm for a UBI [though details matter].

Any Canadians on the Fora remember Réal Caouette and the Social Credit Party back in the 70's?  It's scarcely a new idea and if you are into development studies, you'll be aware of a number of fairly successful conditional cash transfer programs in Mexico and other countries.  Turns out one way to avoid poverty is actually giving people money.  Who knew???

Mexico? Well, I guess it's all relative, it's been a success compared to Venezuela, which has also done conditional cash transfers (conditional on political loyalty, of course). But, in Latin America, Chile has been far more successful than Mexico at reducing poverty rates, despite Mexico spending large sums nominally on fighting poverty. On the other hand, comparing Chilean and Mexican policies isn't really a fair comparison, as Chile has got its act together in terms of the basics of governance (in some respects, more than some EU members) whereas Mexico has whole regions where the State has already failed.
But in terms of UBI, let's do the math: the pre-pandemic US federal budget was about $4 tn, and the number of American adults residing in the US is of the order of 200 million. Obviously devoting the entire federal budget to UBI is completely unrealistically generous, but let's use that figure for the sake of argument. Also, adult American citizens residing in the US is pretty much the narrowest category that could plausibly be labeled "universal" (excluding minors, green card holders and other immigrants, and Americans residing abroad) - even taking these extremes, it would amount to about $20 k, which isn't much above minimum wage working full-time. Again, this is using an unrealistically (easily by an order of magnitude or more) generous numerator and the smallest plausible denominator. Yes, UBI would solve poverty, like manna from heaven would solve world hunger.
Also, the experimental results aren't very encouraging - I don't mean programs where they've basically run a free lottery (so very much not universal), I mean places where a combo of handouts, direct and indirect subsidies, and low taxes amount to de facto UBI, like the Gulf States (or, for a while, Venezuela). It hasn't exactly led to an explosion of creativity and entrepreneurship. To some extent, the French banlieus, British housing estates and similar places in other parts of Europe where there are a lot of adults with an income from the State unconnected to work are also real-world Western "experiments" in how UBI might work, and the results aren't promising, either.

[marshwiggle]

But in terms of UBI, let's do the math: the pre-pandemic US federal budget was about $4 tn, and the number of American adults residing in the US is of the order of 200 million. Obviously devoting the entire federal budget to UBI is completely unrealistically generous, but let's use that figure for the sake of argument. Also, adult American citizens residing in the US is pretty much the narrowest category that could plausibly be labeled "universal" (excluding minors, green card holders and other immigrants, and Americans residing abroad) - even taking these extremes, it would amount to about $20 k, which isn't much above minimum wage working full-time.

That's higher than would be necessary. The point isn't to make some sort of "living wage" without doing anything; it's to make a simpler *safety net than now exists. Various existing programs have eligibility criteria, waiting periods, etc. that make them complicated and inefficient. As I said above, with a UBI every dollar of earned income would be taxable, so there would be incentive for everyone to work, but also tax income from all of that work.


*Families, shared accommodation, etc. would make it possible for individuals with only UBI to pool resources.

[Mobius]

The efficient solution would be to stop all subsidies to tertiary education

The efficient solution would be to simply have everyone who can't contribute enough to the economy more than what it would take to give them a minimum standard of living - uh - raptured.

Efficiency isn't everything.

The question is how we take care of the half of our population that is disabled - all the "essential" workers who clearly aren't (at least until all their potential replacements are raptured), given how the economy can get away with treating them.

Disabled is one of those issues that is problematic. There is clearly some work many who consider themselves disabled can do. The question is how to allocate those jobs, and do it in a way that non-disabled would accept, especially with regards to low-paid manual labor.

[Stockmann]

But in terms of UBI, let's do the math: the pre-pandemic US federal budget was about $4 tn, and the number of American adults residing in the US is of the order of 200 million. Obviously devoting the entire federal budget to UBI is completely unrealistically generous, but let's use that figure for the sake of argument. Also, adult American citizens residing in the US is pretty much the narrowest category that could plausibly be labeled "universal" (excluding minors, green card holders and other immigrants, and Americans residing abroad) - even taking these extremes, it would amount to about $20 k, which isn't much above minimum wage working full-time.

That's higher than would be necessary. The point isn't to make some sort of "living wage" without doing anything; it's to make a simpler *safety net than now exists. Various existing programs have eligibility criteria, waiting periods, etc. that make them complicated and inefficient. As I said above, with a UBI every dollar of earned income would be taxable, so there would be incentive for everyone to work, but also tax income from all of that work.


*Families, shared accommodation, etc. would make it possible for individuals with only UBI to pool resources.

It's also much higher than would be realistic. The US federal welfare budget, including Medicaid, is of the order or $ 800 bn. That would yield, again using the narrowest plausible definition of universal, of the order of $4 k. Not enough for anyone to live on even pooling resources. Minus Medicaid, it's of the order of $ 400 bn, which would yield a UBI of the order of $ 2k. It would be administratively simpler, yes, but would also amount to a massive cut for basically anyone getting benefits in the US today, and such UBI would basically be peanuts for anyone middle class or above.

[marshwiggle]

But in terms of UBI, let's do the math: the pre-pandemic US federal budget was about $4 tn, and the number of American adults residing in the US is of the order of 200 million. Obviously devoting the entire federal budget to UBI is completely unrealistically generous, but let's use that figure for the sake of argument. Also, adult American citizens residing in the US is pretty much the narrowest category that could plausibly be labeled "universal" (excluding minors, green card holders and other immigrants, and Americans residing abroad) - even taking these extremes, it would amount to about $20 k, which isn't much above minimum wage working full-time.

That's higher than would be necessary. The point isn't to make some sort of "living wage" without doing anything; it's to make a simpler *safety net than now exists. Various existing programs have eligibility criteria, waiting periods, etc. that make them complicated and inefficient. As I said above, with a UBI every dollar of earned income would be taxable, so there would be incentive for everyone to work, but also tax income from all of that work.


*Families, shared accommodation, etc. would make it possible for individuals with only UBI to pool resources.

It's also much higher than would be realistic. The US federal welfare budget, including Medicaid, is of the order or $ 800 bn. That would yield, again using the narrowest plausible definition of universal, of the order of $4 k. Not enough for anyone to live on even pooling resources. Minus Medicaid, it's of the order of $ 400 bn, which would yield a UBI of the order of $ 2k. It would be administratively simpler, yes, but would also amount to a massive cut for basically anyone getting benefits in the US today, and such UBI would basically be peanuts for anyone middle class or above.

Of course it would. That's the point. It's meant as a safety net, replacing the hodge-podge of existing programs and filling in the gaps. It's to mitigate poverty, not to augment normal incomes. (And of course, it's irrational to imagine a system that would increase everyone's income. A UBI would probably have some break-even point with the changes to taxes so individuals earning above $50k, or something like that, would get less money than now.)

[Stockmann]

My point is that pretty much nobody would be better off - a lot of welfare recipients would get a lot less and therefore be worse off, and for those too wealthy to benefit from existing welfare programs it would make no real difference. Another way to put it is that, mathematically, if you take the entire present spending on welfare, and increase the denominator (splitting it among "everyone"), then on average those who are currently beneficiaries would get less (same numerator, bigger denominator). That is a mathematical certainty, unless the bulk of welfare spending does not reach the ostensible beneficiaries (due to admin bloat, fraud, whatever) and you also assume these problems would disappear with UBI (my order-of-magnitude estimates assume negligible admin costs for UBI). I'm not seeing any reason to believe that an UBI that isn't peanuts even for current welfare recipients can be set up unless you have something like Abu Dhabi's revenue-to-population ratio or don't care about bringing about financial ruin (the Venezuelan approach).

[dismalist]

My point is that pretty much nobody would be better off - a lot of welfare recipients would get a lot less and therefore be worse off, and for those too wealthy to benefit from existing welfare programs it would make no real difference. Another way to put it is that, mathematically, if you take the entire present spending on welfare, and increase the denominator (splitting it among "everyone"), then on average those who are currently beneficiaries would get less (same numerator, bigger denominator). That is a mathematical certainty, unless the bulk of welfare spending does not reach the ostensible beneficiaries (due to admin bloat, fraud, whatever) and you also assume these problems would disappear with UBI (my order-of-magnitude estimates assume negligible admin costs for UBI). I'm not seeing any reason to believe that an UBI that isn't peanuts even for current welfare recipients can be set up unless you have something like Abu Dhabi's revenue-to-population ratio or don't care about bringing about financial ruin (the Venezuelan approach).

Current welfare programs have cutoffs that make the marginal tax rate on billionaires look low. It's called the "poverty trap". Consolidate and make a non idiotic marginal "loss of benefits" rate -- equivalent to the marginal tax rate, and the incentive to not work will be lessened. It will pay to work.

What matters for incentives is the margin, not the average. Thus, one could be generous with transfers so long as the loss of transfers is not idiotic when one works.

[marshwiggle]

My point is that pretty much nobody would be better off - a lot of welfare recipients would get a lot less and therefore be worse off, and for those too wealthy to benefit from existing welfare programs it would make no real difference. Another way to put it is that, mathematically, if you take the entire present spending on welfare, and increase the denominator (splitting it among "everyone"), then on average those who are currently beneficiaries would get less (same numerator, bigger denominator). That is a mathematical certainty, unless the bulk of welfare spending does not reach the ostensible beneficiaries (due to admin bloat, fraud, whatever) and you also assume these problems would disappear with UBI (my order-of-magnitude estimates assume negligible admin costs for UBI). I'm not seeing any reason to believe that an UBI that isn't peanuts even for current welfare recipients can be set up unless you have something like Abu Dhabi's revenue-to-population ratio or don't care about bringing about financial ruin (the Venezuelan approach).

Current welfare programs have cutoffs that make the marginal tax rate on billionaires look low. It's called the "poverty trap". Consolidate and make a non idiotic marginal "loss of benefits" rate -- equivalent to the marginal tax rate, and the incentive to not work will be lessened. It will pay to work.

Yes! This is absolutely the point of UBI. In addition, because of the "loss of benefits" trap, people on welfare (or disability, or any other program with eligibility requirements) now are tempted to increase their income by off-the-books, cash-only work that is unregulated, and often unsafe. This kind of work would be unnecessary with a UBI.

[mamselle]

I'm getting confused.

Is UBI a Canadian program?

Or are Canadian posters discussing it in comparison with a US program I'm unfamiliar with?

Or is it a welfare amelioration proposal from an author who sees it as a more broadly-applicable program?

M. (...lost in the Northern Hemisphere...)

[dismalist]

I'm getting confused.

Is UBI a Canadian program?

Or are Canadian posters discussing it in comparison with a US program I'm unfamiliar with?

Or is it a welfare amelioration proposal from an author who sees it as a more broadly-applicable program?

M. (...lost in the Northern Hemisphere...)

UBI means Universal Basic Income. The idea is to replace the hodge-podge of welfare programs with a single payment. That payment would taper off gradually when one earns income, so it always pays to work, in sharp contrast to most means tested benefits. One of the Democratic primary presidential contenders, Andrew Yang, propagated it.

It is the same principle as the Negative Income Tax, first proposed by Milton Friedman in the 1960's.

https://en.wikipedia.org/wiki/Universal_basic_income

[mamselle]

Ah.

Thanks.

M.