This is awesome! Check this out. It's really simple. We use the median income in the US as the universal basic income amount. Using the median allows the ones making more to keep a bit more than the rest of us. As of 2015, the median income in the US was about $56,000. We can use the highly respected IRS to manage this. Income above the median amount is used to raise the income of those below the median up to the median amount. That's perfect isn't it? Isn't that in effect what critics of greedy CEOs, capitalism, and advocates of income redistribution are saying? They say tax the rich. Well, in effect that is what I'm describing except much simpler. It's a simple solution that can easily adjust the UBI down. But it really can't be adjusted up much at all because there is a finite pool of money still available above the median after redistribution. We could use average instead of median if it's desirable for everyone to be at the same income level.
Benefits are awesome.
Does away with government assistance programs entirely making that money available for this UBI. Of course there would be a lot of government employees laid off whose income would no longer be available for the UBI. However, maybe that's a wash because those layoffs may represent a cross section of the income pool anyway. So see? Still a good deal. Killing peoples jobs like this won't effect the UBI much at all.
When computers take jobs, the revenue produced still goes into the pockets of those greedy CEOs and corporations making it available for the UBI.
UBI will cause poverty to vanish which means crime will decrease, cost of law enforcement will go down decreasing the need for so many police officers and prison guards which probably increases unemployment but who cares because they get the UBI, demand on the legal system will be less which means lawyers whose incomes are above the median will make less so they will contribute less to the UBI, and so on. But who cares about lawyers anyway. They're just a bunch of greedy and dishonest bastards anyway. Right?
Because more people below the median have more money to spend, more money goes into the economy causing businesses to need more inventory, distribution services need more warehouse space and truckers and employees, and manufacturers will increase production to meet the increased demand and need more raw materials and employees. Bottom line is that the entire supply chain (economy) gets a huge boost because of UBI. You see? A new equilibrium will be reached.
Government regulation adds about $13,000 in an annual hidden tax to every household in the US. Under the UBI, those protections afforded us by these regulations are considerably decreased making more money available for the UBI. YES! I love it.
What happens to the price of goods and services because of the increased demand? You guessed it. They go up to a new level until demand decreases. Then we will reach a new equilibrium. Probably higher I'm guessing than we are now decreasing our purchasing power. But the UBI continues going up year after year as the economy grows. Geez. I can hardly wait.
Now for the effects on the RICH. I can hardly wait. Because they all are in this UBI for the greater good, they won't mind that most of their income above the median will be redistributed. That is admirable how they are willing to do that. The uber rich will probably still have their yachts, multiple homes, gardners, car collections etc. However, they will have less income to hoard. The less than uber rich will feel the difference in their income and what they're able to enjoy as we work down the ladder towards the median. The ones feeling the reduction in income the most are currently in the upper middle class and lower upper class. Fewer vacations. Fewer nice to have things. Fewer cars. Fewer vacation homes. Fewer boats. Some of these decreases in lifestyle will be mitigated because the economy is more robust. However, do I believe they will be made whole? Nope. But it's awesome how they are willing to sacrifice for those who are less fortunate.
I know. I know. I'm showing my ignorance. I'm leaving it up to you to point out where my ignorance lies and I thank you for doing so.
ADDED: social security will no longer be needed. Hip hip hooray. Demand on the government retirement system will go down. Both of these make more money available under UBI. I think all this causes my disposable income to go up.
By the way, this whole deal assumes that business, society, and government are just honest enough to allow this equilibrium to occur. ROFLMAO
SBD is $1.01 so I'm at 50/50 power up.
I realize this is full of sarcasm in the attempt to be funny, but you're actually right about some of the things. However, $56,000 is a bit high to be called a basic income. $12,000 is a basic income in the US because that's our poverty line. That's a floor by the way that everyone can earn on top of, without the discincentives baked into it like welfare has where earning income can make you worse off.
As for inflation concerns, please read this to get into the complexity of that one instead of treating it like a punchline that's entirely obvious. It isn't.
In regards to the rich supporting UBI out of the kindness of their hearts, I think you find this funny based on thinking demand-driven economics is funny. But the thing is, demand is already eroding, even to the point of distorting markets. As automation proceeds, people will lose income, which will hurt their ability to send demand signals as consumers, which will lead to the shuttering of businesses due to insufficient customers, which will lead to a shrinking economy, which means the rich will be worse off if they don't support UBI in order to create the customers they need as owners of capital.
Think of UBI as provisioning everyone with enough money to signal a minimum amount of demand in markets. Without that, markets don't function properly because they are operating on insufficient information.
I highly recommend reading this article about basic income and the Hayekian price system to get a bit more into the above.
Good comments. Thanks. What I was attempting to do by using the median income is give a starting point for understanding. That's all.
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STOPI believe UBI is just communism and will lead to universal servitude. I need to read some Hayek and then I will post a more intelligent reply.
Hayek supported universal basic income. So yeah, read some Hayek.
https://www.libertarianism.org/columns/why-did-hayek-support-basic-income
Don't get serious on me now.
Besides that. Don't label it something. Just talk about it.
UBI will require a government. Where will they get their money from? Taxes? who will pay these taxes? Anybody who makes anything over the UBI. To me it just seems like quantive easing; recipe for hyperinflation.
Did you read my post?