Study Questions for Chapters 4 & 5
One. What is the Hammock Argument?
UBI is dangerous. Why? Because when you give people a safety net, society will quickly fall asleep on a giant hammock. Handouts are the beginning of laziness and death to the soul. Drugs and a life of addiction will ensue. People need work and purpose. In their absence, people will become zombies.
But so far, UBI in Kenya and elsewhere is not having the Hammock Effect.
Lowrey says the opposite occurs: Less work abuse, less child labor, less starvation, more medical care, more school attendance (95).
Guaranteed money means less stress and a higher IQ.
Cash is superior to helping people than goods and services (108). Having villages make shoes, for example, leads to a shoe glut in the area, which hurts villages.
Two. What could be a harmful consequence of UBI to the poor?
Streamlining welfare into UBI will save the government money in various costs, including bureaucratic ones, but for many poor people, the UBI payment will be LESS than what they were making on welfare.
As we see in this Guardian article, UBI, while loved by the Left, is also loved by the Right as part of a campaign to get rid of welfare.
Some Critiques of Lowrey
Statistical Analysis Lacking?
Financial Times argues Lowrey hasn’t used the data in depth enough to be convincing in her argument for UBI.
Does Lowrey Contradict Herself and the Very Premise of UBI?
Writing in the New York Times, Robert B. Reich makes this observation:
But how could America possibly afford a U.B.I.? A $1,000-a-month grant to every American would cost about $3.9 trillion a year. That’s about $1.3 trillion on top of existing welfare programs — roughly the equivalent of the entire federal budget, or about a fifth of the entire United States economy. Both Yang and Lowrey come up with laundry lists of potential funding sources — from soaking the rich (raising the top tax bracket to 55 percent, enlarging the estate tax and implementing new taxes on wealth, financial transactions and perhaps even the owners of the robots and related devices that are displacing jobs), to instituting a carbon tax or a value-added tax.
Whatever the source of funds, it seems a safe bet that increased automation will allow the economy to continue to grow, making a U.B.I. more affordable. A U.B.I. would itself generate more consumer spending, stimulating additional economic activity. And less poverty would mean less crime, incarceration and other social costs associated with deprivation. “You know what’s really expensive?” Yang asks. “Dysfunction. Revolution.”
If these measures still aren’t enough to foot the bill, Lowrey suggests making a U.B.I. less universal by taxing away U.B.I. payments to high-income earners and reducing other forms of social insurance (for example, eliminating food stamps and welfare programs). As a last resort, she writes, a U.B.I. could be implemented as a kind of negative income tax, by which government simply ensures that every person or household has a certain minimum yearly income. This is what Richard Nixon and Milton Friedman had in mind. Lowrey figures that the cost of such a guarantee would approximate the current total costs of the earned-income tax credit, supplemental security income, housing assistance, food stamps and school lunches. She notes that the simplest way to achieve this would be to transform existing antipoverty programs into unconditional cash transfers.
But there’s a logical flaw in her argument. Once a U.B.I. is no longer universal or even basic (what if the poor are worse off when other forms of assistance are stripped away?), it’s hard to see the point of having it in the first place. More troubling is Lowrey’s blurring of the distinction between a U.B.I. that redistributes resources from the superrich to the growing number of vulnerable lower-income Americans and one that merely turns programs for the poor into cash assistance. The latter may be warranted, but it wouldn’t touch America’s growing scourge of inequality and economic insecurity, which will be made worse as robots take over good jobs.
Usebook book about a bad idea?
So says Josh Barro in Business Insider.
Post-Work Future a Nightmare?
Josh Barro rebukes UBI in his Business Insider article.
Annie Lowrey presents UBI on The Daily Show.
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