Saturday, September 27, 2014

Scott Sumner — Guaranteed Annual Income: Let’s talk numbers

Scott Sumner on problems with a GAI. (He doesn’t mention inflation.) Change is in the air with the buzz increasing about GAI, BIG, JG, etc.

The Money Illusion
Guaranteed Annual Income: Let’s talk numbers
Scott Sumner | Professor of Economics at Bentley University

Nick Rowe elaborates at Worthwhile Canadian Initiative.

Dumb questions about econometrics and GAI/NIT

1 comment:

Dan Lynch said...

Once again, this author does not seem to distinguish between a means-tested BIG and a UBI, but he seems to be talking about a UBI.

If we give every single person the same amount, there will be too much incentive to produce large families.

Oh lordy. At least the author is honest enough to admit what Minsky implied but never actually admitted -- that welfare is evil because it may encourage black people to breed more black people. Oh the horror!

Studies show that this conservative myth is not square with the facts, that birth rates mostly correlate to the mother's education level -- the more education, the lower the birth rate. So if we were really serious about reducing black birth rates (???? !!!!) we'd focus on helping black teenagers stay in school and even go to college, and maybe even give them access to birth control !!!. One proven way to help young people stay in school longer is .... a BIG.

FWIW, I support a one-child policy for environmental reasons, but that has nothing to do with a BIG. I suppose that if you were a mean dictator you have a rule where you couldn't receive a BIG until you got your tubes tied ?

how much would the family need to not be considered poor by the standard of NYC progressives? Here I have to plead ignorance, I don’t really know. But let’s say it’s .... $15,000 for the mom

Uncle Sam publishes poverty level thresholds, currently $11,670 for one adult. I suggest setting the means-tested BIG level slightly above the poverty threshold, say $13,000/year or $250/week so that we can eliminate poverty.

Re: should illegal aliens qualify for a BIG? There is zero political support for giving welfare to illegals. My suggestion is to simply stop immigration, which we could do if we wanted to, but the 1% don't want to. But that's another issue.

I just don’t see how the numbers add up. At best you could do a GAI that is so small that it does not eliminate poverty.

As I have proposed many times, set the means-tested BIG level slightly above the poverty threshold. The cost of such a program would be roughly $250 billion, which could be "paid for" with deficit spending.

As long as the minimum wage was significantly higher than the BIG, then people would still have an incentive to choose work and the BIG effect on workforce participation would be minimal.

This has all been discussed before and we're going over old ground. But at least people are interested in BIGs, so I guess that's a good thing.