Finland plans to maybe perhaps pay each citizen 800 euros per month in national basic income proposa - Polidicks

[QUOTE=Antdawg;49265118]This is an absolutely awful idea. The proposal cannot be budgeted for without any significant change in receipts. Just the program would cost more than the total projected revenues for the Finnish government next year. Nevermind that even if other programs could be cut back or replaced, the government would still have to pay for many other obligations - salaries of public employees, public healthcare expenses etc. So what that would mean, for the proposal to be revenue neutral, is that the value of the basic income would have to be so small, while taxes would have to be hiked up. If it's income tax that is increased, that creates a disincentive for people to get into employment, because why bother if you'd lose half of your wages, or more, to tax? If it's VAT that is increased or broadened, the 'real benefit' of the basic income is greatly diminished as a unit of currency would buy less. If it's company tax that's increased, it's going to be the same as what would happen with a VAT increase, while also deterring enterprise, investment and minimise retained earnings for re-investment - in things that could create wealth and employment. But hey, free money is cool, right?[/QUOTE] You will understand me.... This will raise the reserve wage, so phi will be even lower...thus the waiting time for employment will be larger and thus the natural unemployment rate will be a tad higher [editline]7th December 2015[/editline] [QUOTE=Android phone;49265757]These kinds of programs have always sounded odd to me. There's gotta be a tax increase to support it, right? Otherwise the revenue would plummet? I've never seen a program like this explained in detail so I'm probably missing some important facts[/QUOTE] As it has been said,it will cancer other welfare programs. Mathematically or by models, it has been shown that a direct transfer of money is more efficient than giving out goods.

[QUOTE=Antdawg;49265118]This is an absolutely awful idea. The proposal cannot be budgeted for without any significant change in receipts. Just the program would cost more than the total projected revenues for the Finnish government next year. Nevermind that even if other programs could be cut back or replaced, the government would still have to pay for many other obligations - salaries of public employees, public healthcare expenses etc. So what that would mean, for the proposal to be revenue neutral, is that the value of the basic income would have to be so small, while taxes would have to be hiked up. If it's income tax that is increased, that creates a disincentive for people to get into employment, because why bother if you'd lose half of your wages, or more, to tax? If it's VAT that is increased or broadened, the 'real benefit' of the basic income is greatly diminished as a unit of currency would buy less. If it's company tax that's increased, it's going to be the same as what would happen with a VAT increase, while also deterring enterprise, investment and minimise retained earnings for re-investment - in things that could create wealth and employment. But hey, free money is cool, right?[/QUOTE] You don't understand the basics of basic income at all, you can't seriously believe most people would be happy to live with just 800 euros (do you think people don't want things like a TV, smartphone or even an house??), most people want to work, but it reduces the amount of pressure on the society. It reduces bureaucracy when dealing with welfare and with a job, you still earn 800 euros + your job salary, even with taxes it's an attractive solution for most of the population. (it's only bad if you are incredible rich)

[QUOTE=bunguer;49265991]You don't understand the basics of basic income at all, you can't seriously believe most people would be happy to live with just 800 euros (do you think people don't want things like a TV, smartphone or even an house??), most people want to work, but it reduces the amount of pressure on the society. It reduces bureaucracy when dealing with welfare and with a job, you still earn 800 euros + your job salary, even with taxes it's an attractive solution for most of the population. (it's only bad if you are incredible rich)[/QUOTE] Read the first paragraph. He is right IF and ONLY IF other welfare programs aren't cut. This will create a big fucking hole in the budget.

Leaving aside arguments over whether this will increase Inflation, surely such a scheme is completely unsustainable in the long term, assuming consistent population growth. It might provide an economic dividend in the short term but if the population grows, you might find that it costs more to maintain than is sustainable, even with economic growth

As an American who grew up in a low income environment I can't really say what living in Finland is like, we have far, far less of a safety net here than in European countries. So that aside, let me just say that dealing with government-run social programs either as a recipient or as somebody who helps other people (homeless people almost always really suck at this sort of stuff) I can say that the complication and frustration really lowers your drive to do anything. It's miserable. I can tell you right now though the people on welfare pretty much have no concept of money saving, so they usually blow their money ASAP because for them it's a mentality of, "I have the money to do all the shit I want to do and think about all day when I have nothing to do! Fuck yeah!" That's why most poor people buy ridiculous shit that doesn't make sense if you don't treat money like it's some magical item that will disappear for no reason. A lot of middle-class people (probably most of the board at least) have absolutely no concept of that and haven't had a lifetime of conditioning to encourage that behavior. A basic income like this will basically be a constant injection into the economy, but more importantly it will allow things like loan payments to happen in a timely manner and people won't get their shit repossessed. As for the sustainability of this I don't know, I imagine as the economy grows with the population things should still be fine but an economic stagnation (a severe one) would cause problems for sure. I think the only way this system could be properly sustained is if tax brackets were adjusted.

Basic Payment then combine with working, i'd say you could be fairly well off. Interesting idea.

I think it's a little bit shite because 800€ is less than you'd get with the normal labour market subsidy and general housing allowance. I was getting around 852€ with both combined before I got a job. Rent is already ridiculously expensive in Finland, and this system would take away money from those who need it the most.

[QUOTE=The mouse;49266107]Leaving aside arguments over whether this will increase Inflation, surely such a scheme is completely unsustainable in the long term, assuming consistent population growth. It might provide an economic dividend in the short term but if the population grows, you might find that it costs more to maintain than is sustainable, even with economic growth[/QUOTE] Nah, but the population growth of Finland is growing at less than 1% per year. The GDP however is growing at a higher rate. So GDP per capita will be constantly increased rather than become stationary or decrease. Therefore, the government can afford the expenses. Plus, the technology of Finland is becoming bigger and more developed as each year passes. That results in a increment of productivity x hour worked. Which either leads to more dosh if hours are kept constant. if somehow, the population pyramid reverts to a pyramid (Like those of South America or Africa or Asia) or an inverse pyramid (If they don't have more children/more deaths than births) then we will have a big fucking problem. I base this in Solow's model. I hope I get to see a better model or something like that for growth in my next macro subject. [QUOTE] I can tell you right now though the people on welfare pretty much have no concept of money saving, so they usually blow their money ASAP because for them it's a mentality of, "I have the money to do all the shit I want to do and think about all day when I have nothing to do! Fuck yeah!" That's why most poor people buy ridiculous shit that doesn't make sense if you don't treat money like it's some magical item that will disappear for no reason. A lot of middle-class people (probably most of the board at least) have absolutely no concept of that and haven't had a lifetime of conditioning to encourage that behavior. A basic income like this will basically be a constant injection into the economy, but more importantly it will allow things like loan payments to happen in a timely manner and people won't get their shit repossessed. As for the sustainability of this I don't know, I imagine as the economy grows with the population things should still be fine but an economic stagnation (a severe one) would cause problems for sure. I think the only way this system could be properly sustained is if tax brackets were adjusted.[/QUOTE] I can tell all of Facepunch that Jumping is completely right on his observation because it's EXACTLY the same what happens here. Poor people don't have a notion of how to create and save wealth. They confuse an increment in wage/cashflow as an increment of wealth. EDIT: Hey, fun fact: [B]Did you know that this was once proposed in the US with support of NIXON and FRIEDMAN?[/B]

So, This came to mind. If you've got money and its absolute. It means your going to spend money more and this means taxes go back to the government. So. The house always win. :goodjob:

[QUOTE=elfbarf;49264593]It definitely makes some sense. A lot of welfare systems (in the US in particular) struggle with recipients not wanting to work at all, as low paying wages can lead to them making less money working than they would staying at home. Not to mention the penalties for having both parents present, making it harder for them to raise children than for single mothers in some cases. There are so many little clauses and quirks to such systems that really hurt the actual recipients and replacing them with something this simple could work pretty well.[/QUOTE] Not true. They discourage people from wanting to work.

[QUOTE=Zestence;49266304]Rent is already ridiculously expensive in Finland, and this system would take away money from those who need it the most.[/QUOTE] Ya it is, I pay 422€/month for a ~27 square meter studio apartment, similar apartments are 600-800€ per month in Helsinki which is why I never want to move there, the price bubble is insane

[QUOTE=JohhnyCarson;49266867]Not true. They discourage people from wanting to work.[/QUOTE] So are you saying the majority of the people is lazy and would want nothing more than to say at home all day? Also, €800 really isn't that much... Especially if you've got a place to rent and a family to feed.

[QUOTE=Orkel;49267005]Ya it is, I pay 422€/month for a ~27 square meter studio apartment, similar apartments are 600-800€ per month in Helsinki which is why I never want to move there, the price bubble is insane[/QUOTE] List for places to live in the future, before reading your message: -Finland -Germany -Sweden -Denmark -Baltic Countries List for places to live in the future, after reading your message: -Germany -Sweden -Denmark -Baltic Countries.

[QUOTE=Flumbooze;49267048]Also, €800 really isn't that much... Especially if you've got a place to rent and a family to feed.[/QUOTE] Yeah. I mean unless you live in the sticks you're gonna be hard pressed to find an apartment for less then 500€ these days over here. I live in the Tampere region and I'm almost up to 600€ a month. My rent has gone up over 100€ in the last five years. All other living costs on top and you're not in for a life of luxury. Maybe if you're content with just staying indoors at your computer eating boiled macaroni every day you could [i]survive[/i], but you'd have to be class-A basement dweller to enjoy it.

[QUOTE=Flumbooze;49267048]So are you saying the majority of the people is lazy and would want nothing more than to say at home all day? Also, €800 really isn't that much... Especially if you've got a place to rent and a family to feed.[/QUOTE] No. In the US, as soon you work, your benefits stop. Has nothing to do being lazy.

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[QUOTE=Orkel;49265449]The national income would get rid of the other welfare systems (apartment rent assistance, joblessness payouts etc) so I suppose they'd almost cancel eachother out in terms of cost?[/QUOTE] Yes but the Finnish government has only a projected revenue of 49.1 billion euros in 2016, so even if you literally used the entire government's funds on this one initiative, you would still be short a couple of billion every year. Its just not feasible.

[QUOTE=JohhnyCarson;49267365]No. In the US, as soon you work, your benefits stop. Has nothing to do being lazy.[/QUOTE] Oh shit okay I completely misunderstood your post. Sorry.

A universal basic income is the only solution I can see anyway for when automation starts replacing even larger portions of human labour. I'm glad it's happening now rather than when it's already late.

I hate the idea of mincome but getting rid of govt. programs such as rent assistance, etc. I could see this not being a terrible thing as much as I dislike it.

[QUOTE=Cutthecrap;49267075]List for places to live in the future, before reading your message: -Finland -Germany -Sweden -Denmark -Baltic Countries List for places to live in the future, after reading your message: -Germany -Sweden -Denmark -Baltic Countries.[/QUOTE] It's not exactly better here, if you want live close-ish to any university at all. Living in the countryside is very affordable in comparison, but in exchange for that you absolutely need a car here.

[QUOTE=ThePuska;49268212]A universal basic income is the only solution I can see anyway for when automation starts replacing even larger portions of human labour. I'm glad it's happening now rather than when it's already late.[/QUOTE] If it's the only solution you can see, you must have missed quite a number of alternatives. One such alternative is the 'job guarantee' program. If someone is unemployed and can't find work in the private sector, they can go to the job guarantee centre which will guarantee that person a job, doing things like weeding creeks or cleaning streets or charitable work etc, with the pay effectively a minimum wage. This does many good things: it keeps pay in the private sector competitive, better than an official minimum wage does, it acts as a buffer for the labour force during economic downturns, it keeps the program enrollees fit and active, it has the enrollees doing something productive so as to earn their income, it can prevent deterioration of skills associated with long-term unemployment and it can provide enrollees with new skills for when they can make it back into the private sector. But of course it's not free money, you have to work for it, so such proposals are never as attractive as the 'basic income'.

[QUOTE=Antdawg;49265194]Another way to stimulate the economy would be to reduce tax burdens and simplify tax compliance (broader tax bases with fewer exemptions and deductions etc). Both reduced rates and reduced deadweight loss of tax compliance can also have a positive economic effect. I'm not necessarily proposing that for the circumstances in Finland, but there are more-efficient alternatives to 'tax and spend' policies.[/QUOTE] You're right, but think about it this way. Are those plans guaranteed to actually help all people, or just certain groups?

[QUOTE=TornadoAP;49268809]You're right, but think about it this way. Are those plans guaranteed to actually help all people, or just certain groups?[/QUOTE] Yes, such plans can help certain groups. Such as poor people. It depends on what is being changed.

[QUOTE=Antdawg;49268608]If it's the only solution you can see, you must have missed quite a number of alternatives. One such alternative is the 'job guarantee' program. If someone is unemployed and can't find work in the private sector, they can go to the job guarantee centre which will guarantee that person a job, doing things like weeding creeks or cleaning streets or charitable work etc, with the pay effectively a minimum wage. This does many good things: it keeps pay in the private sector competitive, better than an official minimum wage does, it acts as a buffer for the labour force during economic downturns, it keeps the program enrollees fit and active, it has the enrollees doing something productive so as to earn their income, it can prevent deterioration of skills associated with long-term unemployment and it can provide enrollees with new skills for when they can make it back into the private sector. But of course it's not free money, you have to work for it, so such proposals are never as attractive as the 'basic income'.[/QUOTE] You basically entirely ignored the whole point of what he was saying with automation to go on an entirely irrelevant little rant

[QUOTE=Antdawg;49265118]This is an absolutely awful idea. The proposal cannot be budgeted for without any significant change in receipts. Just the program would cost more than the total projected revenues for the Finnish government next year. Nevermind that even if other programs could be cut back or replaced, the government would still have to pay for many other obligations - salaries of public employees, public healthcare expenses etc. So what that would mean, for the proposal to be revenue neutral, is that the value of the basic income would have to be so small, while taxes would have to be hiked up. If it's income tax that is increased, that creates a disincentive for people to get into employment, because why bother if you'd lose half of your wages, or more, to tax? If it's VAT that is increased or broadened, the 'real benefit' of the basic income is greatly diminished as a unit of currency would buy less. If it's company tax that's increased, it's going to be the same as what would happen with a VAT increase, while also deterring enterprise, investment and minimise retained earnings for re-investment - in things that could create wealth and employment. But hey, free money is cool, right?[/QUOTE] You're forgetting how much money the government will recoup back in taxes since consumer spending is certainly going to increase enormously if you hand everyone 800 euros per month. You don't need to raise the tax rate, you're going to receive higher revenue from tax anyway.

[QUOTE=Antlerp;49268879]You're forgetting how much money the government will recoup back in taxes since consumer spending is certainly going to increase enormously if you hand everyone 800 euros per month. You don't need to raise the tax rate, you're going to receive higher revenue from tax anyway.[/QUOTE] Yes, the government is going to get back a portion of the money which it originally gave away to the taxpayer. Hardly revenue neutral. [editline]8th December 2015[/editline] [QUOTE=HumanAbyss;49268845]You basically entirely ignored the whole point of what he was saying with automation to go on an entirely irrelevant little rant[/QUOTE] It's not irrelevant. When facing the prospect of private sector jobs being lost to automation, mechanisation or whatever, a job guarantee program can ensure people will still have a job (albeit in the public sector - where the government deliberately does not automate or mechanise), will still be able to learn new skills and prevent the deterioration of existing skills, as would happen under a basic income system in an automated environment. You basically ignored the whole point of what I was saying.

the concept is sound but damn the numbers don't add up at all, they estimate it will cost 52 billion to impliment, yet they take in 49B total in taxes, so they'd need to seriusly ramp up taxes, however 880$/month is a lot even in the US, so maybe they go with a lower amount, or curtail who could take it [editline]7th December 2015[/editline] that said, it could be a terrific way to boost consumer confidence, the great part is because its the euro they don't have to worry as much about the spending power of their money diminishing in regards to other countries around them

[QUOTE=Antdawg;49268995]Yes, the government is going to get back a portion of the money which it originally gave away to the taxpayer. Hardly revenue neutral. [editline]8th December 2015[/editline] It's not irrelevant. When facing the prospect of private sector jobs being lost to automation, mechanisation or whatever, a job guarantee program can ensure people will still have a job (albeit in the public sector - where the government deliberately does not automate or mechanise), will still be able to learn new skills and prevent the deterioration of existing skills, as would happen under a basic income system in an automated environment. You basically ignored the whole point of what I was saying.[/QUOTE] Your plan falls apart when there aren't enough of those type of jobs, especially with the advances in automation. With basic income, unemployed people will have the time do learn useful skills without worrying about surviving - there will always be those who don't do anything of course, but it's a wasted effort. In your example, sure you can "employ" 100 people to clean some streets, but you call that a solution? At the pace unemployment in youth is going you will end up with dozens of people to pick up a single can. Then what are going to do?

[QUOTE=Tamschi;49268569]It's not exactly better here, if you want live close-ish to any university at all. Living in the countryside is very affordable in comparison, but in exchange for that you absolutely need a car here.[/QUOTE] I'm planning either to work in the BAFIN or some financial entity inside Germany. Or if all else fails, translate the bibliography of my Argentine Economic History subject and give classes in the TU Dresden or Humboldt Universitat (Sorry umlaut).