Bill Mitchell — A Basic Income Guarantee does not reduce poverty

… the introduction of a Job Guarantee would eliminate poverty arising from unemployment and the working poor because the Government could condition the minimum wage by where it set the Job Guarantee wage. If it truly desired to end poverty among those in employment then it would set the Job Guarantee accordingly. Others argue that a more direct way of dealing with poverty and lack of income is to just provide the income via a Basic Income Guarantee (BIG). The BIG idea has captured the progressive side of politics and many on the Right. It is another one of those sneaky neo-liberal ideas that look good on the surface but are rotten not far below. Supporters of BIG are really absolving currency-issuing governments of their responsibility to use their fiscal capacities to ensure there are sufficient jobs created – whether in the non-government or government sector. They are thus going along with the neo-liberal attack on the right to work. Moreover, closer analysis reveals that the introduction of the BIG would not, under current institutional arrangements reduce poverty at all....

I think Bill on to an ket point in saying that basic income is neoliberal, based on neoclassical economics including New Keynesianism. This implies that the JG is based on social welfare based on Keynesian economics, including Post Keynesianism and MMT.

The key point is the difference between creating a buffers stock of employed to ensure full employment in the sense of a job offer for everyone willing and able to work, and buffer stock of unemployed that must be supported by transfer payments over one sort or another.

Basic income does not address this key point, and obscures the tradeoffs by emphasizing the benefits while minimizing the costs and externalties. Basic income is like treating a serious wasting disease with an analgesic like aspirin.
 
Bill Mitchell – billy blog
A Basic Income Guarantee does not reduce poverty
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Ian Welsh — The Problem with Basic Income

So basic income, at any level that would be equivalent to a living wage (aka. letting people live a decent life, not just barely scrape by), can be expected to spike inflation in various commodities, including oil. This is a problem, but it’s not a huge problem, because we finally have the technology which allows us to move off oil (not completely, but enough to mitigate the effect of demand increases), and because, hey, we’re flirting with deflation anyway. 

The real problem with basic income has to do with who controls our economy—with the fact that we are sold what we need, by and large, by oligopolies.... 

What this means is that increases in income, especially at the lower end, tend to be simply taken away by those who have what you must have. Everyone will know what the basic income is, and they will know who is surviving on just that, or just that plus a low-wage job. And they will raise prices so that money goes to them.... 

So if you want basic income to work, you must also make capitalism work. You must create actual competitive markets, you must-trust bust, you must regulate and you must move, as government, to ensure that the important things people will spend that basic income on are not scarce—either naturally or artificially.This extends far beyond basic income. 

Good post. Read the whole thing if you are into basic income.

Ian Welsh
The Problem with Basic Income

Ed Dolan — A Universal Basic Income and Work Incentives. Part 1: Theory

Everywhere you look, it seems, people are talking about a Universal Basic Income (UBI)—a monthly cash benefit paid to every citizen that would replace the existing means-tested welfare system.

Supporters maintain that a UBI would not only provide income support to people in need, but would also increase work incentives. That is because, unlike the current welfare system, it would not claw back 50, 70, or even 100 percent of the earnings of low-income workers who make the effort to get a job. Opponents are more skeptical. They fear that if everyone were given a basic cash income with no requirement to work, people would quit their jobs in droves and we would end up with a nation of layabouts.

Who is right? This post examines the relevant economic theory. Part 2 will look at the evidence.

Ed Dolan's Econ Blog
A Universal Basic Income and Work Incentives. Part 1: Theory
Ed Dolan

Timothy Taylor — Universal Basic Income: A Thought Experiment

Pretty much all current public programs to assist households with low incomes suffer from the same seemingly unavoidable problem: As the household's income rises, the amount of assistance provided by the public program is phased out. For example, a person who earns an extra $100 might find that eligibility for public assistance has been reduced by $50. Economists call this reduction in benefits as income rises a "negative income tax," and it is not unusual for studies to find that certain working poor families face negative income tax rates in the range of 50% of the marginal dollar earned, 60%, or even higher (for examples, see here and here). These high negative income tax rates diminish work incentives for those with low incomes.

There's a way out called "universal basic income." Ed Dolan explores "The Pragmatic Case for a Universal Basic Income" in the Third Quarter 2014 issue of the Milken Institute Review (free registration may be required for access).

The idea of a universal basic income is that every U.S. citizen would be entitled to a chunk of money each year. This amount would not vary based on income level, or employment, or disability, or age, or any other reason. Specifically, when a low-income person works and earns income, the universal basic income check would not be reduced in any way. The "negative income tax" rate is zero percent.

The idea of a universal basic income raises obvious questions. How much would it be per person? How would it be financed? Are the politics of such a program conceivable? Let's tackle these in turn.

Conversable Economist
Universal Basic Income: A Thought Experiment
Timothy Taylor

Steve Randy Waldman — VC for the people

SRW advocates a universal basic income guarantee while reporting on the recent INET conference he attended.

Interfluidity
VC for the people
Steve Randy Waldman

Tim Harford — A universal income is not such a silly idea

Tim Harford looks at the BIG and likes what he sees, sort of.

Tim Harford — The Undercover Economist

A universal income is not such a silly idea
Tim Harford