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Thread: National basic income

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    Default National basic income

    Finland’s government is drawing up plans to pay every citizen a basic income of euros 800 ($1,165) each month, scrapping benefits altogether.
    Under proposals drafted by the Finnish Social Insurance Institution (Kela), the tax-free payments would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive any other income.
    While it may sound counterintuitive, the basic income is intended to encourage more people back to work in Finland, where unemployment is at record levels. At present, many unemployed people would be worse off if they took on low-paid temporary jobs due to loss of welfare payments.
    More than 10 per cent of Finland’s workforce is unemployed, rising to 22.7 per cent among younger workers.
    A survey commissioned by Kela found that close to 70 per cent of the population favours the idea of a national basic income.
    Detractors caution that a basic income would remove people’s incentive to work and lead to higher unemployment. Those in favour point to previous experiments where a basic income has been successfully trialled. The Canadian town of Dauphin experimented with a basic income guarantee in the Seventies and the results – both social and economic – were largely positive.
    Juha Sipila, the Finnish prime minister, supports the idea, saying: “For me, a basic income means simplifying the social security system.”
    The measure will cost Finland euros 46.7?billion per year.

    http://www.thestarphoenix.com/news/w...074/story.html

    Interesting idea, or not.
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    Sounds to me like that would result in about a million government workers in umpteen departments that now figure who should get what would no longer be needed, scrapping departments entirely. Replace them all by one cheque depositing computer would result in massive layoffs but millions not looking for work as average households may have several thousand dollars coming in from the program. When can we start this JT and Rach? lol
    Last edited by Drumbones; 07-12-2015 at 01:53 AM.

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    Well they'd have that $1,165 to fall back on.

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    Average couple would receive $2330 a month. One of two working in the home could quit their low paying job if they wanted and look after kids and the household or whatever. Better than paying daycare. Employers would be crying for help
    Last edited by Drumbones; 07-12-2015 at 05:20 AM.

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    What kind of benefits would be scrapped? Alberta healthcare? I could see that $1200/month being eaten up real quickly with private insurance companies premiums. CPP? Many people cant or wont save enough for their retirement now with RRSP's, TFSA's and other investments, so why would they put that $1200/month into an investment planning for retirement?

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    I'm sure a European country would not compromise their present health care coverage. What would be the point then.

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    Seems that this will be a vast improvement in efficiency on the supports/benefits/payments side.

    On the income side the tax system will likely claw back the payments or get them back through increased spending and growth.

    People will quit jobs they despise but others will be able to start their own businesses being back stopped by some income.

    Id guess that people will quickly incorporate any real gains into their lifestyle and so may be more encouraged to work as it will actually allow them to improve their life vs. current systems that provide income as well as a disincentive to work. i.e. You work and you get cut off support.
    Last edited by KC; 07-12-2015 at 08:21 AM.

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    I'm not sure how this would work in Canada, since there is employment insurance that provides the main safety net. So I expect, the dollars would be quite small. Also, presumably it would be a lot harder on families with kids, because all those tax credits to encourage people to have children would disappear. Looks like a good idea for Finland to try though.

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    In Canada, this would replace EI, GIS, OAS, Welfare, all child care benefits. Not sure about CPP, probably not. This would be a tax free payment, so there is no disincentive for work. (If I work more hours, I lose out on some of this payment).

    CPP only maxes out at about 1200/mo as is.

    I think this is a good idea. Saves a lot of bureaucracy and eliminates all the chances for people to take advantage of the system. As an example, it's possible for someone to get full OAS while enjoying a healthy income and wealth.

    There are always people who will blow it on something stupid. If they have no other type of income, then I don't know what would happen with them.

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    If it would mean that people who use more of the social benefits would now be charged more then it might be a great idea. I also like how you could take more risks with things like entrepreneurship and the arts while surviving through the lean months.

    Of course, it might also totally ruin their economy by eliminating jobs, and then everybody is fighting for the same $1,165... There might not be anybody to sell you goods or services to!

    At the very least it finally makes things 'fair', which is a nice change for once. Will be interesting to see how it plays out.
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    This wouldn't affect healthcare at all. Just social safety net items.

    It would probably reduce the amount of disdain the middle class and rich have towards the poor who "take advantage of all these benefits" Everyone gets the same, up to you to do something with it. Having more kids won't get you more. Working 6 months of the year won't get you more.

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    The GOC only actually spends $47 billion per year on direct transfers to persons. This includes elderly benefits and child care. That is only $111 per person per month for all Canadians.

    EI is not really the same thing. It is called employment insurance for a reason. You pay into it each month out of your paycheque, therefore costs are recoverable. Let's say we include EI though. Total revenues are projected at $23 billion. Added to the above calculation that gives every single Canadian a monthly cheque of about $165.

    2014-2015 Estimates


    Is $165 a month enough to replace these programs? I don't think so. The issue here is that a huge proportion of the GoC's budget is transferred to other levels of government. Each transfer program also comes with massive administrative overhead. To have a proper national basic income, we would need to fundamentally restructure the roles and responsibilities of the federal and provincial governments.

    I think the better route here is to eliminate the fed's role as a middle man. They are collecting almost 2/3s of all tax dollars, and the majority of that they just hand back to provinces and municipalities. At every step along the way they shed money like a leaky old pipe. A better system would just be to allow provinces and municipalities to just collect the money themselves, and cut the fed out completely.

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    Wonder what happened to the experiment in Dauphin, Manitoba back in the seventies that the article mentioned.
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    There's also provincial programs like AISH that could be rolled up in aminimum income program.
    1200/mo would be a major cut from current EI payments, and if it's if it's going to replace all programs it can't be just per adult - life is just as expensive for a single parent as it is for two adults. I suspect that Finland will still have social housing programs to further help poor families with kids.

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    ^ Not unless you're planning on either scrapping the Canadian constitution, or having a separate provincial basic income on top of the national one.

    Canada's constitution outlines mandated roles and responsibilities for federal and provincial governments. This makes it hard to scrap things in exchange for a basic income, because the actual roles are split up between different governments.

    One thing we could stop doing is allowing the federal government to collect the huge majority of taxes only to waste a good portion of it before they simply hand it back to other governments. Cut out the middle man, save billions in federal waste.

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    If implemented here would someone who lives in Vancouver get the same as someone in Halifax?

    If not who would decide?
    be offended! figure out why later...

  17. #17

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    ^lets face it, as nice as the idea seems, as soon as people realize it means Katz gets the same benefit as them, if won't fly...

  18. #18

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    Quote Originally Posted by howie View Post
    Wonder what happened to the experiment in Dauphin, Manitoba back in the seventies that the article mentioned.
    We have another thread on this on c2e. I'm sure it's been referenced and probably linked to there.

    Anyone have the link?

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    Quote Originally Posted by richardW View Post
    If implemented here would someone who lives in Vancouver get the same as someone in Halifax?

    If not who would decide?
    Could use a formula. However, just like anyone that is retired, you move to where you can afford to live on what you get - or get a job t support the lifestyle you are willing to live with. So a lot of spending power might move out of Vancouver to Halifax where the cheques would buy more. This would in turn lower the costs in Vancouver. This spending shift would work flawlessly because its Economics 101 and the law of supply and demand.

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    I would retire tomorrow and live off the $2300 for myself and my son.

    Thanks

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    Finland’s government is drawing up plans to pay every citizen a basic income of euros 800 ($1,165) each month, scrapping benefits altogether.
    http://www.thestarphoenix.com/news/w...074/story.html

    Now, the article states every citizen. If this means a child from birth gets this basic income that could be money in the bank (if the parents are sensible) from day one for that child. If a couple (or single parent) has 4 kids that is a fair amount of extra cash if the parent(s) both have jobs. I should imagine with the kids being minors who would have power of attorney over that money?. Would a parent who is divorced have to pay child support to the parent who has custody of the kids, or would this basic income cover stuff like that?. If parents take maternity leave they will be relying on this money to get them through, then when they get back to work it will be extra money. Now, I could see sensible people amassing a fair bit of cash if they are working but then again that same cash is going to have to see them through their retirement years. Then again, they will still be getting the basic income amount. There are all kinds of implications that would have to be thought through.
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    ^ I am pretty sure kids under voting age don't get anything. That would be really dumb.
    be offended! figure out why later...

  23. #23

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    Quote Originally Posted by richardW View Post
    ^ I am pretty sure kids under voting age don't get anything. That would be really dumb.
    Not necessarily. It's just money that goes in all directions anyway. Give it to the kids but require that a portion of the money go into such things like personal but regulated EI, healthcare and retirement accounts. People essentially become self insured up to some point. Thus you eliminate social security and unemployment insurance bureaucracies via privatization.

    We sort of do that now with government contributions or deferred and eliminated taxing as with RESPs which in turn eliminate some government provided student loans and education subsidies.
    Last edited by KC; 08-12-2015 at 10:03 AM.

  24. #24

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    Quote Originally Posted by Drumbones View Post
    Sounds to me like that would result in about a million government workers in umpteen departments that now figure who should get what would no longer be needed, scrapping departments entirely. Replace them all by one cheque depositing computer would result in massive layoffs but millions
    The government could vastly improve service by re-purposing millions of workers. Imagine taking tens of thousands of employees out of CRA and all the various benefits systems and bolstering systems like passports, 311-type systems, emergency line operations, planning, etc. The government would probably be able to attrition out tons of employees that wouldn't need to work anymore between basic income and their pension without having to replace them, so there's probably ways to make it revenue neutral from how it operates today, while making our bureaucracy leaner and more efficient.

    Or it could fail miserably
    "Men never do evil so completely and cheerfully as when they do it from religious conviction" - Blaise Pascal

  25. #25

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    Quote Originally Posted by KC View Post
    Quote Originally Posted by richardW View Post
    If implemented here would someone who lives in Vancouver get the same as someone in Halifax?

    If not who would decide?
    Could use a formula. However, just like anyone that is retired, you move to where you can afford to live on what you get - or get a job t support the lifestyle you are willing to live with. So a lot of spending power might move out of Vancouver to Halifax where the cheques would buy more. This would in turn lower the costs in Vancouver. This spending shift would work flawlessly because its Economics 101 and the law of supply and demand.
    My thinking exactly. If all of a sudden the risk of total financial ruin with no support structure was removed, I think we'd see incredible amounts of entrepreneurship and inter-province migration. Would be a huge boon for small towns too - people longing for that lifestyle could go open or work at a small business in a small town that would otherwise pay rather poorly, and be able to get by OK. Since there would be more money in everyone's pocket, it would likely bolster the basic economy.
    "Men never do evil so completely and cheerfully as when they do it from religious conviction" - Blaise Pascal

  26. #26

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    My main issue with it is this: does anyone really think that if a guy burned through his "basic income" that he'd just be left on the street by the government? I highly doubt it. At the end of the day, there's going to be people who need additional help (rightfully or wrongfully) and the government is going to give it to them, basic income or no basic income.

  27. #27

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    Quote Originally Posted by River Valley Green View Post
    My main issue with it is this: does anyone really think that if a guy burned through his "basic income" that he'd just be left on the street by the government? I highly doubt it. At the end of the day, there's going to be people who need additional help (rightfully or wrongfully) and the government is going to give it to them, basic income or no basic income.
    Not necessarily. Beyond the benefits people get now, there's only so much the government does. This type of program greatly simplifies the entire thing.

    There will always be other support, this is just a simplification of benefits.
    "Men never do evil so completely and cheerfully as when they do it from religious conviction" - Blaise Pascal

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    We could start by giving it to all citizens (and PRs) between the ages 18-65. Child benefits and and OAS/GIS could be left as it is for the time being.
    Let society adjust to a new reality over a period of time (3 or 4 yrs) and then extend it to the elderly and children.

    PS- As long as you are sane, sober and married, you won't be poor under these rules

  29. #29
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    I think you night still be able to be poor. Even with a roomate 1200 a month doesn't give out much, especially in higher-density big cities. What you won't be is destitute.

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    Quote Originally Posted by richardW View Post
    ^ I am pretty sure kids under voting age don't get anything. That would be really dumb.
    Article does say 'all citizens'. Finland's population is about 5.4 million.
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    This could have the effect of having greedy land lords drive rental rates up to whatever the guaranteed basic monthly income is...and why not? If all the landlords decide to do that, who is going to stop them?

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    Vacancy.

  33. #33

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    Quote Originally Posted by GranaryMan View Post
    This could have the effect of having greedy land lords drive rental rates up to whatever the guaranteed basic monthly income is...and why not? If all the landlords decide to do that, who is going to stop them?
    People would try to capture the income and a lot of people that have lacked income would initially be spending it for various short term wants and needs. (Think of how lottery winners from all socio-economic backgrounds blow some or all of the money they receive). However, for many of the poor there would be little change in what they already get through a variety of services and subsidies but currently have to jump through a lot of means testing and meetings hoops to get those services. Then there's those having to make trips to the food bank, etc. Think of all the people spending time and money promoting and building the food bank stores. Not exactly an efficient use of people's time - but there would still be such needs but possibly drastically reduced to levels we had decades ago where there was less income disparity and do more money flowing through the lower socio-economic stratas in society. (The money of the wealthy tends to circulate at different levels among professionals and higher end services so trickle down economics can't be counted on to provide any real dispersion.)

  34. #34

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    Yanis Varoufakis: ‘Western Democracies need a New Deal’
    31 January 2017 Last updated at 17:20 GMT
    Viewsnight is BBC Newsnight's new place for ideas and opinion.
    Here Yanis Varoufakis, former Greek Finance Minister, argues that it’s time for a “New Deal” – including a universal basic income.

    http://www.bbc.com/news/world-38816480

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