vtsnowedin wrote:Let's look at the numbers a bit.
Yang's proposal is to give $1000/ month to every American that is over 18 and is not already receiving that or more. Well the US population is 329 million and growing but 74 million are under 18 and 63 million are drawing social security with an average benefit of $1400 a month. Lets count them all as non participants because those that are below $1000 are often getting housing subsidies and or food stamps. So that leaves us with 192 million but a percentage of them are already on welfare. I found it hard to find a number of just adults between 18 and 65 on welfare but 21 percent of all Americans are drawing and family sizes of welfare families are said to be the same as non recipients so 79 percent of 192 rounds to 150 million adults that would get the new UBI benefit.
150,000,000 X 1000 X 12 months = $1,800,000,000 per year . That is 1.8 trillion on top of the one trillion a year we are already spending.
Cant be done.
Nice to see someone analyzing the numbers. I do have some clarifications to update your numbers:
First, SS payments are not welfare, and will not be affected by this proposal. Yang estimates the population size for the "dividend" would be 230 million. So total cost of the program will be $2.3 Trillion not $1.8 trillion.
Second, his proposal would be completely funded, by the VAT. So basically a stand alone, single purpose tax. Pretty simple, the money comes in from the VAT and then gets sent out to the citizens who have opted in. Basically a net zero sum game as far as other government programs, with the exception of some lower payments on the welfare roles.
Third, after a quick Google, Govt spending was $3.8 trillion in 2017, ($12,000 per person, including children). So I believe your $1.8 trillion number is incorrect.
Some other points addressing yours, and others comments.
Say I'm a person currently drawing $1,000.00 per month in various aid programs. To get that money, I have to fill out applications, meet with case workers every month taking time and resources out of my life. The money I receive, is earmarked and can only be spent on certain items or for certain things. I am working and looking for a better job so hopefully I won't need the assistance anymore.
Now my case worker tells me I can get $1,000.00 per month for the rest of my life, no questions asked, to spend as I want. As a matter of fact, this could be the last time we have to meet. All, I have to do is opt into the "Freedom Dividend" and give up my $1,000 in Aid benefits. What would your choice be??? Yang claims 70% get less than $1,000.00 per month.
Single parent families are at historic highs, in part because our aid programs encourage it financially. What if it was more economically profitable to remain a two parent family, or even multigenerational family?
We already have a minimum wage so that is not really an issue, although it may need some adjustment.
As far as price controls, I lived through the Nixon ones, they didn't work out so well (although it gave me my first interest in economics).
Yes the tax is regressive, especially if you assume the companies will just pass the costs down to the consumer, (a reasonable assumption). However, due to the dividend, the lower income people still come out ahead, especially those who make just enough money not to qualify for welfare. The rich will pay way, way, way, more than they get from the "Freedom dividend" without being able to get around paying it.
The Alaskan "dividend" is very popular in a RED state. It comes from Oil mining in the state. Does everybody here believe the oil companies just eat the costs, or do they pass them downstream like every other company?
The "Freedom Dividend" will not have any stigma attached to getting it, since everyone gets it, and it doesn't matter what you spend it on. I have seen papers showing in a lot of cases the most effective way to give aid is just direct payments to individuals and let them figure out how to use it. The same principle would probably apply here.
The "Freedom Dividend" is obviously not an income replacement, at $700 less a year than the poverty rate.
It will help flatten, (a little), the income differential between the rich and the poor by raising up the poor.
Now would be a great time to try it, with the unemployment rate at a 50 year low, and wages rising faster than inflation, I don't see companies trying to cut salaries if implemented.
Finally, (for now), as an Anarcho Capitalist, I find wealth redistribution like this rather distasteful. In my dream world, this would not be needed, but neither would the FED, taxes,and 99% of government.
As a realest looking at the wave of AI, Automation, self driving vehicles, etc. a LOT of jobs are going away, sooner than most expect. I think this could help in the transition.