Current Events > $1,000 per month cash handout would grow the U.S. economy by $2.5 trillion

(+) Yeah! (+)

https://www.cnbc.com/2017/08/31/1000-per-month-cash-handout-would-grow-the-economy-by-2-point-5-trillion.html

Giving every adult in the United States a $1,000 cash handout per month would grow the economy by $2.5 trillion by 2025, according to a new study on universal basic income.

The report was released in August by the left-leaning Roosevelt Institute. Roosevelt research director Marshall Steinbaum, Michalis Nikiforos at Bard College's Levy Institute, and Gennaro Zezza at the University of Cassino and Southern Lazio in Italy co-authored the study.

The study made economic forecasts for three proposals: a full universal basic income in which every adult gets $1,000 a month ($12,000 a year), a partial basic income in which every adult gets $500 a month ($6,000 a year), and a child allowance in which parents get $250 a month ($3,000 a year).

The larger the universal basic income, the greater the benefit to the economy, according to the report.

A $1,000 cash handout to all adults would grow the economy by 12.56 percent after eight years, the study finds. Current Congressional Budget Office estimates put the GDP at $19.8 trillion. The cash handout would therefore increase the GDP by $2.48 trillion. (Vox first did this extrapolation in their coverage of the report, and Steinbaum confirmed the accuracy of the extrapolation to CNBC Make It by email.)

The $250 allowance would grow the GDP by 0.79 percent and a $500-a-month payment would grow the GDP by 6.5 percent.

These estimates are based on a universal basic income paid for by increasing the federal deficit. As part of the study, the researchers also calculated the effect to the economy of paying for the cash handouts by increasing taxes. In that case, there would be no net benefit to the economy, the report finds.

"When paying for the policy by increasing taxes on households rather than paying for the policy with debt, the policy is not expansionary," the report says. "In effect, it is giving to households with one hand what it is taking away with the other. There is no net effect."

The study is based on the Levy Macro-Economic model, which presupposes that the potential of the economy is constrained because household income is low. That opinion, even the authors of the study admit, is debatable. "Other macroeconomic models would disagree," the report says.

The idea of a universal basic income has been promoted lately by technology leaders and Silicon Valley billionaires.

Some, like Tesla and SpaceX CEO Elon Musk, see cash handouts as a solution to the imminent threat of automation to the labor force. Musk has said that universal basic income will be a virtual necessity because robots will put so many low-skilled workers out of a job.

Others, like Facebook CEO Mark Zuckerberg, think handouts could give everyone the safety net necessary to think like an entrepreneur. Zuckerberg touts UBI as a way to ensure people are not afraid to take risks to pursue the projects and business ventures they are passionate about.

Y Combinator President and Silicon Valley heavyweight Sam Altman has launched an initiative to study the long-term effects on human behavior of getting a cash handout. The research is still in process.


---

Even as the idea of universal basic income is being studied by and discussed among the tech elite, the idea is a non-starter in the United States, according to some.

Robert Greenstein, the founder and president of the D.C.-based think tank Center on Budget and Policy Priorities, called the notion too idealistic. "An effort to secure UBI would prove quixotic," he wrote in 2016. Greenstein says universal basic income is both too expensive and impossible to get through Washington, D.C.

Greenstein offered one innovative alternative: "To be sure, there is a possible exception: a carbon tax that returns its proceeds to the public via a universal payment." But even that, he says, is more theoretical than realistic because he suggests that money reaped from a carbon tax would be better used to study alternative energy or to support those at the very bottom of the economy.

"If a carbon tax could pass, we might need to focus the proceeds available for these payments on low- and moderate-income families — so the payments would be adequate to offset the higher energy costs these families would face as a result of the tax — rather than extending the payments all the way up the income scale in universal fashion," Greenstein says.
---

I'd take it
---

TC are you interested in buying a self-renewing energy source?


---

Lmao
---

Nobody will believe that and nobody is going to try it.
---

On_The_Edge posted...

TC are you interested in buying a self-renewing energy source?

LOL
---

These estimates are based on a universal basic income paid for by increasing the federal deficit. As part of the study, the researchers also calculated the effect to the economy of paying for the cash handouts by increasing taxes. In that case, there would be no net benefit to the economy, the report finds.

Outstanding.
---

But

1000*250million = 2.5 trillion

So it costs 2.5t every year... Where is the logic here
---

On_The_Edge posted...

TC are you interested in buying a self-renewing energy source?

Holy crap does that really work?
---

Scorsese2002 posted...

The larger the universal basic income, the greater the benefit to the economy, according to the report.

Why not give us all a BILLION DOLLARS?
---

Dragon239 posted...

These estimates are based on a universal basic income paid for by increasing the federal deficit. As part of the study, the researchers also calculated the effect to the economy of paying for the cash handouts by increasing taxes. In that case, there would be no net benefit to the economy, the report finds.

Outstanding.

Fuck
---

The government should really just stop hampering organic economic productivity, and stop robbing working people of their hard-earned money for gratuitous expenditures.
---

More Universal Basic Income propoganda

On_The_Edge posted...

TC are you interested in buying a self-renewing energy source?

XD
---

I'd spend a lot more money on non-housing things if I had $1000 a month, which would cover my rent. I'd probably get a car. I'd invest more. I'd start saving for a house. I can see how it would help.
---

The major concern is when automation, robotics, and computer soft start eliminating what used to be good jobs and careers. We see the signs of it happening everywhere. We're heading towards a largely service based evonomy. More and more people sign up for welfare, foidstamps, disability or housing every year. In the future we'll just make it an encompassing program called universal nasic income.

In the mid-1970s, the tiny Canadian town of Dauphin ( the %u201Cgarden capital of Manitoba%u201D ) acted as guinea pig for a grand experiment in social policy called %u201CMincome.%u201D For a short period of time, all the residents of the town received a guaranteed minimum income. About 1,000 poor families got monthly checks to supplement their earnings.

Evelyn Forget, a health economist at the University of Manitoba, has done some of the best research on the results. Some of her findings were obvious: Poverty disappeared. But others were more surprising: High-school completion rates went up; hospitalization rates went down. %u201CIf you have a social program like this, community values themselves start to change,%u201D Forget said.

A basic income might be enough to live on, but not enough to live very well on. Such a program would be designed to end poverty without creating a nation of layabouts. The Mincome experiment offers some backup for that argument, too.%u201CFor a lot of economists, the issue was that you would disincentivize work,%u201D said Wayne Simpson, a Canadian economist who has studied Mincome. %u201CThe evidence showed that it was not nearly as bad as some of the literature had suggested.%u201D

But analysis of pilot programs in which basic income was provided to communities in the U.S. and Canada suggest that it plays out differently than opponents suggest. In those programs, the overall reduction in working hours among those given basic income was extremely low. And the only participants who stopped working fit neatly into one of two distinct demographics: new mothers, and teenagers who had previously been working while attending high school%u2014neither of which are representative of the broader population

http://www.africafocus.org/docs10/pov1006.php

In "Just Give Money to the Poor: The Development Revolution from the South," Joseph Hanlon, Armando Barrientos and David Hulme look at the experience of recent cash transfer programs, in countries ranging from Mexico and Brazil to South Africa, Namibia, India, and Mongolia. The verdict: cash transfers work if they are both fair and assured. If poor people have even small amounts of regular ensured income, they are in general well-equipped to decide how to use it most productively. And the results not only alleviate immediate hardship, but also contribute to longer-term economic development and poverty reduction.

http://mondediplo.com/2013/05/04income

Dewala%u2019s team studied the effects of a minimum monthly income on 4,000 people in eight villages over 18 months. There were no conditions regarding wages, employment, caste, gender or age, and the recipients could use the money as they saw fit. Besides social security benefits, adults received 200 rupees ($3.65) a month, and mothers were given 100 rupees for each child. Four of the villages had had help from Sewa for some years, with the organisation of support groups, savings cooperatives (2), bank loans, training in financial management and support during visits to local officials. Twelve non-participant villages served as controls for comparative study. The initiative, modelled on an urban Sewa project in a district of Delhi, was India%u2019s first applied research on unconditional income. The hypothesis was that direct financial payments would change behaviour and improve family living conditions, especially children%u2019s nutrition and health.

Studies at the beginning, mid-point and end of the project confirmed that, in villages receiving payments, people spent more on eggs, meat and fish, and on healthcare. Children%u2019s school marks improved in 68% of families, and the time they spent at school nearly tripled. Saving also tripled, and twice as many people were able to start a new business.

---

Fuck are you a proudclad alt or did he write the article
---

Hyperinflation can add a lot if notional GDP.
---

tennisdude818 posted...

Hyperinflation can add a lot if notional GDP.

Basic Income would not cause inflation because inflation is a result of monetary policy, not fiscal policy.

There's no way this could cause general inflation of that variety. You could argue that it would cause inflation in certain sectors of the economy, but that is arguable and would most likely be accompanied by deflation in other sectors (e.g., agribusiness and corn in particular would lose value if we did away with food stamps and replaced them with this).
---

The Admiral posted...

On_The_Edge posted...

TC are you interested in buying a self-renewing energy source?

LOL

---

EnragedSlith posted...

The Admiral posted...

On_The_Edge posted...

TC are you interested in buying a self-renewing energy source?

LOL

---

Hinakuluiau posted...

tennisdude818 posted...

Hyperinflation can add a lot if notional GDP.

Basic Income would not cause inflation because inflation is a result of monetary policy, not fiscal policy.

There's no way this could cause general inflation of that variety. You could argue that it would cause inflation in certain sectors of the economy, but that is arguable and would most likely be accompanied by deflation in other sectors (e.g., agribusiness and corn in particular would lose value if we did away with food stamps and replaced them with this).

When entitlements implode in modern 1st worlds countries that can print their own money, outright default is unlikely.
---

I love how conservatives always mock ideas like this even though it would benefit them as well.

It's like they love living paycheck to paycheck and never truly enjoying life.
---

NINExATExSEVEN posted...

conservatives living paycheck to paycheck

Lmao
---

I would love to know what all the people laughing suggest this country does when automation practically wipes out cheap, low-skill labor and cuts into high-skill labor as well.
---

The Admiral posted...

On_The_Edge posted...

TC are you interested in buying a self-renewing energy source?

LOL

---

John_Galt posted...

NINExATExSEVEN posted...

conservatives living paycheck to paycheck

Lmao

TIL millions of red voters in red states don't exist.
---

hockeybub89 posted...

I would love to know what all the people laughing suggest this country does when automation practically wipes out cheap, low-skill labor and cuts into high-skill labor as well.

Git gud.
---

Mind you guys, Nixon of all presidents almost pushed through a UIB and it was blocked by dems who wanted more. They thought it was a good idea
---