Wednesday, June 15, 2016

Who Will Pay?

Universal Basic Income. Basically, if you are not aware of what UBI is, some certain amount of public funds would be distributed to everyone. So, say, $1000 a month is given to everyone.

The idea has been kicked around, in one form or another, for quite some time. Finland is considering it. The Swiss just rejected it.

Henry Orbit don't need no stinking UBI!
Some would have the UBI replace all current social safety nets, on the grounds that it eliminates a lot of bureaucracy.  (I don't think that would work entirely, as, for example, people with disabilities or mental issues would be better off with current services rather than cash). Others want the UBI tacked on to existing services.

Canada tried it, a small experiment in Manitoba called Mincome. It seemed to work out alright.

The big problem most people see is they assume UBI would turn recipients into lazy slackers and moochers. Presumably these people have been able to ignore that, though they may have never received explicit public assistance, their very existence has pretty much been subsidized through one government program or another (for example, defense spending).

The other objection is: who is gonna pay for it? This seems to me an objection worth exploring.

Consider: In the US of A, the worry is that automation is displacing jobs, with few or no jobs being created for those that disappear. Many feel that this is something to worry about decades from now, if ever, since supposedly new better quality jobs replace the shitty jobs that robots (or foriegn labor) take over. Well, not everyone can be a robot repairman like Henry Orbit.

Here is my gedanken.

Let's say it's not decades. And let's say it is not just low-skill jobs. Let's say that, given the fact AI seems to finally be growing into itself, all but around 1% of all jobs are gone in, let's say five years. Now, some jobs I'm assuming won't be replaced by automation in five years: strippers, prostitutes, etc. But all the jobs that you think wouldn't go away? They are all gone, replaced by robots that can do it faster, cheaper, smarter. That 1% of jobs remaining? Performed by centaurs: half human/half AI workers.

(AI doesn't mean smarter as in smarter than human, which are tolerable generalists. One thing we've noticed is most tasks don't require a lot of brain power to do. And it turns out that a remarkably small brain can do some rather ingenious specific tasks. Think crows. Think spiders. Think any animal with a brain smaller than yours that can kick your ass at whatever it is that animal is good at).

So, your job, whatever it is, artist, musician, CEO, surgeon, hedge fund manager, politician, has been replaced by some machine learning algorithm that magnificently grew into the task and does a much better job than the most accomplished human. Only the most menial or awkward or incredibly strange jobs remain, by virtue of humans being cheaper or irreplaceable (for the moment).

So, where does the public revenue come from? Currently, public revenues come mostly from income and payroll taxes. It's possible that corporations (the new people) could kick in more, but I wouldn't count on it. So, the revenue for UBI is coming from payroll and income tax. Let's break it down down more. Payroll tax accounts for about a third of all public revenue. And, in turn, usually people in the middle to bottom pay the lion's share of payroll taxes. The rich? Hardly any. And income taxes? The reverse (as the rich like to remind everyone). But payroll taxes are trending towards the chief revenue source.

Well, who cares who is paying what. Let's say that the 1% of jobs is fairly egalitarian and revenue, to keep things simple, is cut 1% across all income groups.

In 2015, total revenue was $6.7 trillion. In 2020, under the conditions of the gedanken basically been cut to 1% of that, or $67 billion. That's $216 per US citizen. I don't know how you are going to live off that. Actually, you can, but it means a lot of belt tightening. Some in the upper brackets will not be used to that. Hopefully, the've lots left over in their trust funds and hedge funds and properties so we don't here them whine too much, but the rest of us are just a little bit fucked.

Besides, who is buying all this shit that the robots are making?

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