This on the one hand leads to a variable income, on the other hand it doesn’t place an obligation on the government that it might not be able to fulfil. Personally I think it’s a better and more elegant policy.
I also like the elegance, but… people being people, I would expect that if five years in a row the “variable income” happens to always be around X, people will start to expect it, will make this expectation a part of their personal finances, and if the next year the income is only X/2, there will be riots in the streets.
(Compare to the mortgage crisis of 2008, which happened because of a change in numbers much less directly related to people’s incomes, and yet many people have lost their homes because they relied too much on the numbers staying constant.)
So I expect that in practice the government would take it at least as a soft obligation, and would use various accounting tricks to keep the income constant (and if that means a disaster in 10 years, the advantage of democracy is that it becomes someone else’s problem).
I would expect that if five years in a row the “variable income” happens to always be around X, people will start to expect it, will make this expectation a part of their personal finances, and if the next year the income is only X/2, there will be riots in the streets.
Doesn’t this kind of already happen with the stock market? I can imagine rioting in the case where people loose half of their investments overnight, but I think it’d be different for a cut in dividends since any economic downturn that reduces land values (and thus land taxes) would correspondingly reduce rents and thus people probably wouldn’t be left immediately destitute if dividends cut in half or something.
It is similar, but reducing the UBI would lead to immediate loss of money at hand, for everyone, at the same time. So the reaction would be stronger than if today some people lose money at stock market, which they didn’t plan to spend this month anyway.
I also like the elegance, but… people being people, I would expect that if five years in a row the “variable income” happens to always be around X, people will start to expect it, will make this expectation a part of their personal finances, and if the next year the income is only X/2, there will be riots in the streets.
(Compare to the mortgage crisis of 2008, which happened because of a change in numbers much less directly related to people’s incomes, and yet many people have lost their homes because they relied too much on the numbers staying constant.)
So I expect that in practice the government would take it at least as a soft obligation, and would use various accounting tricks to keep the income constant (and if that means a disaster in 10 years, the advantage of democracy is that it becomes someone else’s problem).
Doesn’t this kind of already happen with the stock market? I can imagine rioting in the case where people loose half of their investments overnight, but I think it’d be different for a cut in dividends since any economic downturn that reduces land values (and thus land taxes) would correspondingly reduce rents and thus people probably wouldn’t be left immediately destitute if dividends cut in half or something.
It is similar, but reducing the UBI would lead to immediate loss of money at hand, for everyone, at the same time. So the reaction would be stronger than if today some people lose money at stock market, which they didn’t plan to spend this month anyway.