Basic Income: Unintended Consequences

To expand on his migration point, I worry that BI will create inland ghettos where the BI allowance is enough on it&#x27;s own to cover the cost of living. At least some people would choose this lifestyle. Over time these ghettos would evolve their own cultures and start to be very separate from the rest of us. While I value personal freedom of an adult to chose to do this with their life, I worry about their children who will have a hard time leaving and I worry about internal fragmentation of our nation.<p>I think overall the net positive effect of BI probably counteracts the concerns above - but it will be interesting to see if such a phenomenon develops in Finland.

Basic Income is designed to replace welfare benefits, and get rid the many adverse effects that a complicated welfare system creates. Therefore it should benefit from the same type of protection. It&#x27;s not complicated, many countries have this system in place already: welfare benefits cannot be financial collaterals and they are not seizable.

I think this is an exceptionally stupid idea and I think part of basic income should be stipulation that it can&#x27;t be used to get loans ie. make this illegal.<p>Because first thing financial industry would use it against the poor, get them lump sum and eliminate benefits of basic income.<p>I am sure this can be made in a way that wouldn&#x27;t be limiting too much, yet prevent obvious abuses you are bringing.

The whole point of these unintended consequences are easily corrected by allowing penalty free (for the basic income at least) defaults. Just like the student loan issue would be solved overnight by allowing defaults, basic incomes would never have a problem in the first place with them.

I feel like there would be a number of arbitrage opportunities that would become available as well, though it&#x27;s late and I can&#x27;t think of any off of the top of my head. How it affects the currency exchange markets would be interesting as well. IMHO, a better option would be to provide Tax credits to employers for each employee&#x27;s pay up to the poverty line. If employers don&#x27;t pay poverty level wages, the government is stepping in with federal benefits. A tax credit is a more efficient transfer mechanism than the current system as well, but still encourages some sort of productivity.

The main unintended consequence is that nobody is going to want to be a grocery store clerk for minimum wage if they get BI. Hence, salaries for menial jobs will go through the roof... All of a sudden a gallon of milk will have to cost $20 to pay grocery store salaries... Now salaries will need to go even higher so that employees can afford food, themselves... And now you&#x27;ve got hyperinflation.

This really cuts to the heart of the matter. In fact, so much so that I&#x27;m left wondering if the recent publicity behind BI is simply yet another wall street scam in the making.<p>Rather than added to with BI, what really needs to happen is the <i>reduction of rent</i>. Specifically the financial rent paid to the cabal of moneyprinters for the &quot;privilege&quot; of partaking in the markets that said moneyprinters have inflated the fuck out of - housing, cars and education - via the Fed policy of forced inflation. Real goods get continually cheaper (that&#x27;s central to economic competition) so to make the CPI inflationary in a time of increasing productivity gains, the credit-based expenses skyrocket. Their only limit is the carrying cost of the principal - if interest rates halve, home prices double.<p>Without addressing how the Fed and banks have perverted our society away from wealth-based independence and toward mass indentured servitude, I fear the only thing BI would do is turn the treadmill up correspondingly quicker.

Concerns about people using their basic income to secure credit strike me as awfully similar to the old &quot;What if they use it to buy drugs?&quot;

Would basic income still register in the collective mindset as “help”? Because if it registers as “free money” I fear prices will go up. I understand that since BI correlates with income tax no inflation should be created. Yet people have particular ways to understand how welfare happens. In a poor community, when you know for sure that everyone there can afford some stuff, wouldn’t that be an incentive to collectively raise prices, just because you know there is definitely new money to be spent.

If you are on basic income the last thing you need is a loan

The individual is pretty flawed in his reasoning and examples...<p>&quot;Since the lifetime of the average person is roughly 78 years, net present valuing a lifetime of $12,000 yearly basic income payments works out to roughly $287,000 assuming that yearly payments total $10,000 and applying a 4% yearly discount factor. That is enough to purchase a median priced single family home&quot;<p>While factually true, in total, $12k a year isn&#x27;t going to buy you a house anywhere near the median in your life time. Too much hyperbole in the read.