Instigator / Pro
Points: 0

A UBI would be beneficial to said country

Finished

The voting period has ended

After not so many votes, surprise surprise...
It's a tie!
Debate details
Publication date
Last update
Category
Economics
Time for argument
Three days
Voting system
Open voting
Voting period
One week
Point system
Four points
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Contender / Con
Points: 0
Description
https://www.debateart.com/debates/1681/a-ubi-would-be-beneficial-to-said-country
Since last debate both of us ended up forfeiting some rounds, we decided to do a redebate. Hopefully this will turn out better.
Round 1
Published:
Hello Swagnarok. Hopefully we can have a full debate this time. Let's get into it!

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A) OPENING


Outline

Round 1 - First Argument
Round 2 - Clash, and Second Argument
Round 3 - Clash, and Anything Else I Missed
Round 4 - Clash, and Summarization

Note - These might change slightly in the future

First Argument - Economic Impacts
How will implementing a UBI positively impact the economy?

Second Argument - Social Impacts
How will implementing a UBI positively impact the society?


Context

A UBI is a system put in place which gives every citizen $1000 per month, regardless of any standards. A UBI isn't actually a new concept. In fact, it dates back to the 16th century! However, the concept recently gained attention when 2020 presidential candidate Andrew Yang marketed his UBI plan as a so called "Freedom Dividend". And this debate is very similarly modeled after his plan...

Like stated earlier, we will be using America as the sandbox for this debate, just to keep everything consistent and relatable. Also, as previously agreed upon, we will be debating whether or not a UBI would be beneficial or not. We won't touch upon whether it's realistic to implement, or all that stuff (although that could be for another debate).

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B) ARGUMENT

Economic Impacts How will implementing a UBI positively impact the economy?

What does the status quo and the future look like?

Some recent studies have found that 25% of jobs in America are at risk to being lost. That correlates to the unemployment rate, which is already at around 3.6%, to rise even higher!

This also contributes to individual people's wealth.

When people don't have enough money, they tend to cut down on their spendings. Goods like clothing, food, and various accessories will be limited in purchase. This can lead to a sort of 'dry economy', where not much goods are being bought. And when little goods are being bought, stores won't make enough money. This can result in even more people being fired, and shops closing all over.

Money isn't being circulated.

How a UBI can help

However, that's where a UBI comes in! A UBI will help the economy as a whole by giving people some extra money for them to spend. This money will be circulated through the economy and renew it.

The economic benefits of this include [1]:

Economic growth
  • More money is being used and circulated
  • 12% growth in the economy by 2025
More jobs and related benefits are created
  • More economic activity means than more jobs will be born [2]
    • An estimated 4.7 million jobs are to be created [3]
  • Increased bargaining power for workers
    • "More pay more say" - Thought provoking quote from Squid
Less Poverty
  • A UBI almost guarantees everyone will be above the poverty line
  • Families can have more support (a topic for round two)

And more!


As you can clearly see now, a UBI is a clear benefit to the economy.

And, all this data is backed up by numerous professional research papers [4].

Now you might be asking, "but this is all speculation!" How do we actually know that the predicted results might happen?

Well, surprisingly enough, versions of the UBI have actually been tested before! Follow my words...

  • Alaska's current UBI [5]
  • Namibian poverty support [6]
  • My People Fund program [7]
  • And even more!
All these tests and real world situations turned out great, and we can even learn from some of them to improve our sense of a UBI.

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C) CONCLUSION

In this round, I have talked about the major economic factors that would be benefited from a UBI.

In the next round, I'll be presenting the social benefits of UBI. I will also be clashing with my opponent, and stemming from that clash, will be an elaboration of the economic benefits.

Well, that is all from me now, and I wish you the best Swagnarok!

Thank you.

Links:



Published:
I thank my opponent for arranging this rematch. For Round 1 I'll simply be copy/pasting my arguments from the original debate:


1. Cost

As of July 1, 2018, the US population stood at 327,000,000. [1] Of these, only around 22.4% were under the age of 18. [Ibid.] This leaves approximately 240,000,000 Americans over the age of 18.
For purposes of simplicity I will not be factoring in the several million Americans imprisoned. Any UBI scheme would have to answer the question "Would they be receiving UBI too?". The most straightforward solution to this would be to deny it for all months in which the subject spent any time in jail or prison. Again, for the sake of ease I will assume that all American citizens in the appropriate age bracket will be receiving UBI every month of the year.

$1,000 x 12 =$12,000 per annum (year) for each eligible person. 240,000,000 x $12,000 = $2,880,000,000,000. Or, that is to say, 2.88 Trillion dollars. That would be the rough price tag of UBI every single year, not counting such things as administrative costs.

In comparison, the International Monetary Fund has estimated that total GDP in 2019 would stand at 21.4 Trillion. [2] What this means is that in order to pay for Universal Basic Income, the United States would have to spend equivalent to over 10% of its total GDP every year.

At this point, my opponent would likely step in and say "Aha but you're wrong! You see, UBI can replace many existing welfare programs!" And in fact this is true...but only to an extent.
In 2018, welfare spending by the federal government stood at $851.1 billion dollars. [3] Note that this doesn't count the services of the Department of Veterans Affairs, because, well, the general tendency is to think of the VA as just compensation to brave soldiers who put theirs lives on the line rather than as a government handout. In 2019 the White House requested $83 billion for the VA. [4] We can combine this to get a rough estimate of $900-950 billion spent on welfare annually.

Even if UBI completely replaced all of these programs (doubtful, especially in the case of the VA for reasons already stated), that would still leave an extra 1.9 Trillion dollars. The government would have to collect the money to pay for this somehow. If taxes weren't raised, then this would all become deficit spending.

In 2019 government outlays (expenditures) are projected to stand at 4.4 Trillion, while receipts (amount collected in taxes) will stand at 3.4 Trillion. [Ibid, page 121]
Whenever outlays are larger than receipts, the government borrows to pay the rest. This is called the deficit. The deficit describes how much debt the government is going to take on that year, which is added to the outstanding National Debt. In 2019, the deficit is projected to be almost 1 Trillion dollars; if you were to add the costs of an implemented UBI, you'd have a minimum deficit of 2.9 Trillion.

(Please note: Elderly people have a strong tendency to view Social Security as something that they've earned/invested rather than as welfare. If you deduct a retiree's UBI allowance from their Social Security payout, they'll perceive that the government is either robbing them of the money they earned/invested into the system or discriminating against them by denying them the same UBI younger people get. There are tens of millions of people over 65 in America, and they consistently turn out in large numbers come election day. If it's even hinted at that either party would try this, I absolutely guarantee you they'd lose in a landslide. That is to say, the elderly under this scheme would receive UBI on top of Social Security, whether you like it or not.)

At this point you have two options:

First, you can accept a 2.9 Trillion dollar deficit. This is clearly unsustainable, given that the US national debt is already larger than GDP, and that the deficit in this scenario would significantly outpace economic growth (see projected GDP growth rates in source 2).
How large is the national debt already? 23 Trillion dollars, as of the time of posting. [5]

Second, you raise taxes to such a degree as to keep the deficit manageably low. The fact that we have such a large deficit already suggests this isn't going to happen, because the political will is lacking.
In addition, tax rates affect investment, wages, and so on. There is a phenomenon called "Capital Flight" which can have devastating effects on any economy, and which is much more likely to happen when tax rates are oppressively high. All in all, talking about this would entail an entirely separate debate that I'm simply not ready to have, because I'm not an economist. Suffice to say, however, deciding that you're going to raise another 1.9 Trillion dollars in taxes every year would have drastic and far-reaching consequences.



2. Price Inflation

Imagine the following scenario.
You own a supermarket. All of the sudden, your typical customer has $12,000 more dollars every year in disposable income. In addition, taxes on your business went up to pay for this. Way up.
So what do you do? You jack prices on everything. It's clear that they can afford it now, so they probably wouldn't care that much. Even with these price increases they still enjoy greater financial security than they did before UBI.
And this would affect everything. Absolutely. Everything. There is no consumer market whose prices would not skyrocket in the aftermath of this.

What would the end result of this be? While people would still gain from UBI, the free money would not go as far as you might initially think. Relying on a cost-benefit analysis (the price of a 1.9 trillion dollar outlay increase vs. the benefit to the consumer who has more money), the balance would not be in favor of benefits.



3. Perverse Incentives

While in the future work may become obsolete altogether, at present the economy still relies on human labor.
However, there are millions upon millions of people who hold jobs out of necessity, because the alternative to working is living on the streets.
But what if all of these people got a paycheck of $12,000 a year? Something that they would receive regardless of whether they worked or not. There would be stigma attached to them receiving UBI because everybody else would. In this case, you could have groups of, say, 2 or 3 slackers who get together, pool their UBI money, pay rent on a cheap place, and live off of that without having to work another day of their lives.
Without these people, the economy would possibly contract, making the above-mentioned deficit problem even worse.



4. Alaska

My opponent cited Alaska as a model for the US to emulate. The problem with this is, the economy of Alaska does not mirror that of the US. As his own source admitted, Alaska is an extraction based economy. The oil can be extracted and sold by anyone, and this will happen whatever the tax rate is. The US proper, on the other hand, is a wealth creation economy. High taxes stifle this process.


Sources:







Round 2
Published:
Hello! Thanks for responding. Let's jump right into it!

(1) Note: A friendly reminder just for the people who don't know this already, this debate is about the UBI itself, not about the political realism of implementing it, or all that stuff. Just on UBI and solely on UBI.

(2) Note: I highly encourage viewers to explore direct links in my text for further information, however, footnotes could be overlooked if wished.

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A) CLASH

Note: Most of the stuff I mention here could also be interpreted as an extension of my arguments

My opponent said...

2.4 million Americans over the age of 18 [...] $2.88 trillion
Aha! But you're wrong! You see, a UBI can replace many existing welfare programs!

Anyway, let's take a closer look at how we can sufficiently pay the cost of a UBI.

Let's borrow a model from Andrew Yang. Using his plan, we can lay out a very easy and clear cut solution to cutting down the cost of a UBI.

  • People can either choose between getting the UBI, or continuing their current welfare programs
    • Most people would like to revive the UBI
    • $950 billion are spent on welfare annually (courtesy of my opponent)
    • Yay! We just cut a trillion off the cost of a UBI!
  • A UBI would better help people take care of themselves
    • Save $100 billion (low estimate) on healthcare, poverty problems, etc.
    • "$1 to a poor parent will result in as much as $7 in cost-savings and economic growth." - Andrew Yang
    • Yay! We cut cut off another $100+ billion in UBI expenses!
  • Economic growth [1] [2]
    • A UBI would grow the economy by 13%
    • Create 4.6 million new jobs
    • Who doesn't like more jobs?
  • Add a value added tax of only 10%
    • It will generate an estimated $800 billion in revenue
    • "VAT = We're RICH!" ~ Another thought provoking quote from Squid
    • 166 other countries use it, including Europe, which has double the proposed VAT!

Before I move on, I want to take a second to focus on the point about economic growth.

A UBI will cost us some money, even with all these reductions, and that's a plain fact. However, the economic benefits greatly outweigh the costs, and will improve literal millions of lives. Like I stated in my previous text, we are going to be losing millions of jobs due to automation. But creating 4.6 million new jobs can positively impact the economy, and with a sustained growth of 13%, this will without question cushion the effects of automation.

Phew! That was a long one. But this covers your entire argument about a UBI's cost. Let's move on.

jack prices on everything
Yet no evidence has been provided to support your case. Please elaborate so a response could be ensued.

Also, are you talking about prices being raised due to economic inflation? Or because the employer just feels like it?

 the economy of Alaska does not mirror that of the US
I fully recognize that Alaska'a economy does not mirror Americas. However, I did not use Alaska as the primary reason why a UBI would work. Alaska's UBI simply proves that the basic model concept of a UBI would indeed work.

I also paired Alaska with other real world example of a UBI, to further support my statement.


There! Hopefully that covers everything my opponent has stated. Now let's move on into my arguments.

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B) ARGUMENT

Social Impacts - How will implementing a UBI positively impact the society?

In the previous round, I talked about how a UBI would positively benefit the economy. The other half of the coin would be the social factors, and that is exactly what I will do here.

What does the status quo and future look like?

Millions of people will be jobless in the future, lowering our labour participation rate even further. The labour rate right now sits at 63% (I'm not great at counting, but I think it's sitting at 37th place right now), the lowest it's been in three decades, and is continuing to decline. Oh, and In fact, this correlates to 20% of working-age men not having a job! I'm sure we can all agree that little to no jobs available is a bad thing for the society.

Anthropologist David Graeber even mentioned in an interview how there are tons of "bs jobs". He also goes on to say how millions of people are "toiling away in meaningless, unnecessary jobs, and they know it" [3]. Is this the best world to live in?

How a UBI can help

First, about the issue up top. A UBI will give people more financial freedom, freeing the restraints that constrict them to a bs job. They will no longer have to work at their only option, but now they can chose their best option.

  • Smartness
Studies have found that poverty actually impedes cognitive function as many through studies have shown [4]. In fact, it can actually reduce IQ scores by 13 points [5]! In relation, more people could also invest this money to go back to school, and get a higher education.

Another fact, every dollar invested in early education can return up to six dollars later on in life [6]!

  • Productiveness
A UBI gives people a little more support. This allows them to work in fields that actually love to do, have less pay. Teachers and artists could be examples of this. It would also allow people to do more nonprofit work. In relation, more people could now stay at home with their children, and care for their loved ones.

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C) CONCLUSION

In this round, I have clashed numerously with my opponent, and have provided my own contentions.

In the next round, I will be covering and expanding on some spots in which I have missed.

That is all from me now, and I wish Swagnarok a great time!

Thank you.

Links

Published:
Heya Squid let's jump right into this shall we?


1. Cost and Economics

My opponent has made some very bold claims. For starters:


    • A UBI would grow the economy by 13%
    • Create 4.6 million new jobs
    • Who doesn't like more jobs?

This claim needs to be evaluated more closely. His main citation appears to be an article from Vox, which cites a study from 2017. There are some things to note about this.

First, Vox is a progressive outlet. This is well-known and has even been acknowledged by the New York Times, wherein Vox was described as "mostly liberal". [1] As an ideologically driven newsmedia outlet, Vox's primary inclination is to advance the talking points of "its side". Though that's not to say that Vox outright lies, they will tend to value things that reinforce their belief system rather than being strictly factual.
Second, Vox cites the results of a single study, whose results could hypothetically prove inaccurate in the future.

Third, the study arrives at the 13% figure if UBI is paid for via deficit spending. If not, the figure rises to a "mere" $515 Billion dollar increase. Another matter that needs clarifying: as far as I can tell (and I could feasibly be wrong about this), the study is *not* claiming that the total GDP will permanently be 2.5 Trillion dollars higher per year, but rather that in an 8-year period (2017-2025) its total value will be increased by 2.5 Trillion. That is, in any given year GDP will be higher by several hundred billion dollars, and if you add that up over the course of 8 years the extra sum raised amounts to 2.5 Trillion. To take a completely wild guess, this amounts to somewhere in the area of maybe a $400-500 Billion dollar increase in GDP per year (from where it would've been without UBI), which obviously would be a lot lower if paid for by taxes instead.
This is important. If you have an annual GDP increase of this size, it would still be outpaced by the nearly 2 Trillion dollar deficit increase that I mentioned last round.


Now mind you, Vox admits that the findings of this study are "extremely contentious estimates, borne of controversial assumptions about the way the economy works and the effects that a basic income would have on it. Many, if not most, economic modelers would come to very different conclusions: that a basic income discourages work, that raising taxes to pay for it could have profound negative economic impacts" and so on.
Indeed, a study [2] by Christina and David Romer, published in the "American Economic Review" in 2010, suggests that "a tax increase of 1 percent of GDP reduces output over the next three years by nearly three percent." In this case, were UBI paid for via raising taxes then we can expect that over the course of any given three years during that period the total economic output (the cumulative GDP of those 3 years combined) would be lowered by almost 10%, as the tax increase needed would cover roughly 10% of GDP, assuming all of the welfare cuts that my opponent is optimistic would in fact happen. As the tax route would not grow the economy by anywhere 10 percent, it would be a losing deal.

The basic assumption behind UBI, that consumer activity is what grows the economy, is not universally accepted. As one 2013 article [3] by Forbes magazine put it:


The systematic failure by Keynesian economists and pundits to distinguish between consuming and producing value is the single most damaging fallacy in popular economic thinking. This past Christmas, we produced a playful video called “Deck the Halls with Macro Follies” exploring the history of this popular myth.  If the economy were a car, consumer preferences would surely be the steering wheel, but real savings and investment would be the engine that drives it forward...Economic growth (booms) and declines (bust) have always been led by changes in business and durable goods investment, while final consumer goods spending has been relatively stable through the business cycle. Booms and busts in financial markets,  heavy industry and housing have always been leading indicators of recession and recovery...Consumption spending actually increased throughout the 2001 recession (financed, in part, by artificially easy credit) even as employment was falling along with investment. During our continuing crisis, consumption spending returned to its all-time high in 2011--yet investment to this day remains at decade lows, producing the worst recovery in growth and employment since the Great Depression. 

Fourth and finally: Let's say, for example, that GDP per year would in fact increase to 2.5 Trillion, and my opponent is entirely right about this. In this scenario, UBI would be financed via deficit spending.
In this case, there is a looming danger he has failed to take into account. UBI is still largely untested, in spite of what some studies may suggest. If the US were to decide to take on an estimated 15.2 Trillion dollars in debt to finance UBI over the course of 8 year, for the sake of a program that nobody knows for sure will even work, this may very well result in widespread panic over what would surely be the biggest debt crisis in human history.
The scale of the US economy makes it clear that in this event it would be impossible for the US to be "bailed out" by anybody, any country, or by any international institution such as the IMF.
The end result of this financial panic would be the destruction of the economy of the US, even if the giant price tag might've eventually proved to be worth it if given the chance.


2. Social Impacts

My opponent references growing joblessness in the future. This is a complicated debate without easy answers. It should be noted that automation will create jobs as well as taking them [4]. I still believe that a highly motivated and smart-acting workforce can stay competitive for the foreseeable future.
He also writes:


Anthropologist David Graeber even mentioned in an interview how there are tons of "bs jobs". He also goes on to say how millions of people are "toiling away in meaningless, unnecessary jobs, and they know it" [3]. Is this the best world to live in?

This is a subjective point. As a personal anecdote, I work a very menial job at present, cleaning bacteria-laden grime off of dirty plates in a fast food restaurant. It's hard to get worse than that, believe me. I would certainly like to have a better job if available.
But as it is right now, I spend the bulk of my free time at home doing nothing of any real value. What if 100 percent of my time was spent not working? If I could find some productive task to fill my time then maybe I could be better off, but otherwise I would end up more miserable than I already am. For most people, there is no "great purpose" in their lives which they would passionately pursue if they weren't distracted by work. Some people would be happier but most would throw themselves into watching TV, playing video games, and eating junk all day long. These things are great in moderation but you just can't live like that.

Alright, done.


Sources:




Round 3
Published:
Hey Swag and thanks for your response. Sorry for the late reply, I wrote this all in a rush at night. Let's delve right into this!

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(~) PRETEXT

Let me clear something up.

In my previous round, I iscolistically stated how "a UBI would grow the economy by 13% [and it would] create 4.6 million new jobs." However, that is under the assumption that we pay for it using deficit spending.

That was an isolated case, and didn't affect the rest of my arguments.

However, a new plan.

I will now base my arguments under the assumption that we will pay for a UBI using a VAT, saved money from healthcare, and cutting welfare programs. We will not be paying for a UBI using deficit spending.

This will grow the economy by 2.6% ($515 billion), and expand the labour force by 1.1 million jobs.

Con, do you accept?

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A) CLASH

My opponent said...

His main citation appears to be an article from Vox
Instead of arguing with Vox itself, I would prefer if you argue with their statements itself (ad hominem). However, let's examine this further.

The article I sited was indeed from Vox, and yes, you're correct, Vox is biased. However, the first half of the site doesn't provided any original information, rather, they refer to a paper done by the Roosevelt Institute.

Also keep in mind that that paper is somewhat around two years old. It's safe to assume that back then, the 4th industrial revolution was not as prominent as it is today. And I can say that with authority because Amazon, one of the worlds largest killers [1], has doubled in stock prices since 2017. Google, has made huge accommodations towards AI [2]. Technology in general, is advancing at higher speeds [3]. Things will only get worse as time goes on.

[GDP's increase] would still be outpaced by the nearly 2 Trillion dollar deficit increase
The economic growth is not the major plan to pay for it. A VAT, along with saved money from healthcare, and with cutting welfare programs is the way to go. And combine that with the economic growth, and you can sufficiently pay for a UBI (not completely, but sufficiently).

  • VAT - $800 billion
  • Cutting Welfare - $950 billion
  • Saved Healthcare Costs - $100 to $200 billion
  • Economic Revenue - $500 billion
  • GDP Growth - $300 billion
All these added up would generate 2.7 trillion. The cost of a Yang's UBI (over 18 and under 65) would be around 2.46 trillion.

However, I'm not saying that we must use all of our revenue to pay for the UBI, nor I'm I saying that we can fully pay for a UBI. My point is that a UBI isn't as expensive as you think, and we can cover a significant portion of the cost.

A tax increase of 1 percent of GDP reduces output over the next three years by nearly three percent
Let's read the paper.

To determine their numbers, they used an OLS estimation, and arrived at this equation: ΔY[t] = a + (M)∑(i=0) x (b[i]) x (ΔT[t−i]) + e[t]

ΔY[t] in this case represents the real output of the logarithmic linear- I'm kidding, I have no clue what any of that is.

However, what I do know is that the formula they used is a 'minimum variance equation', one that has little variation between data sets. That means this equation is great for general problems, but not so good on specific events, like a UBI

The paper also encourages the use of 'legislative tax changes.' They define that term to include all legislative tax changes, This includes stuff like, and I quote, "offsetting a change in government spending; offsetting some factor other than spending likely to affect output in the near future; dealing with an inherited budget deficit; and achieving some long-run goal." A UBI obviously does not fall under all of those categories.

Automation will create jobs as well as taking them
Oh come on! The website you linked say that I have to "subscribe" to keep reading their post.

But, I did do some research on my own, and I see what you mean. There are going to be many jobs that would be created, however, the jobs displaced will be far faster than the jobs created.

Also, you have to look at what type of jobs are being created. Primarily the ones that deal with technology, which is in fact a very small niche. The majority of the jobs are repetitious, and are the ones most likely to get replaced. This unfortunately includes telemarketers, truck drivers, and more.

And even if we can somehow create more jobs fast enough, people will need a cushion or a support to help them move from one job to another. Hence, a UBI.

This is a subjective point.
Agreed. I can see how we can just go back and forth on this statement.

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B) ARGUMENTS

One more thing.

The personal impacts of UBI.

These may not apply to everyone, but without a doubt apply to thousands.

  • Most people can come out of poverty [4]
A UBI almost guarantees a poverty free society.

A study showed that "poverty has a big impact on health care, education, criminal justice, and other social realms and policy domains." The study further claims that most Americans what poverty gone, and feel like the government should be helping the poor. That's exactly what a UBI can do.

  • Support unpaid workers
Taking care of your family, elderly ones, and other non-profit work. Most non-profit work (or any work that doesn't have direct payment - artists and authors for example) is good for the community, like volunteering; a UBI could increase that by financially supporting people more efficiently, allowing them to stop working paycheck to paycheck, and instead contribute to what they like.

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C) CONCLUSION

In this round, I clash with my opponent, and provided some information along that line.

I also briefly mentioned a couple of arguments relating to social factors.

In the next round, I will be summarizing this debate, along with clashing with my opponent, and no more.

I would also like to ask my opponent to not provide any new information during the last round.

Good luck Swagnarok!

Thank you.

Links:

[1] Investopedia - A dozen or so companies Amazon is slaying this year

[2] CBInsights - How Google Plans To Use AI To Reinvent The $3 Trillion US Healthcare Industry

[3] SingularityHub - Technology feels like it's accelerating - because it actually is

[4] Scholars - What Americans think about poverty and how to reduce it



Published:
However, a new plan.

I will now base my arguments under the assumption that we will pay for a UBI using a VAT, saved money from healthcare, and cutting welfare programs. We will not be paying for a UBI using deficit spending.

This will grow the economy by 2.6% ($515 billion), and expand the labour force by 1.1 million jobs.

Con, do you accept?


Yes. That's alright with me.

Ladies and gentlemen, my opponent has made a very bold claim: that UBI would actually pay for itself. Let's break this down.


  • VAT - $800 billion
  • Cutting Welfare - $950 billion
  • Saved Healthcare Costs - $100 to $200 billion
  • Economic Revenue - $500 billion
  • GDP Growth - $300 billion
All these added up would generate 2.7 trillion. The cost of a Yang's UBI (over 18 and under 65) would be around 2.46 trillion.

According to this source [1] the federal government (USFG) collected 3.3. Trillion in tax revenue in 2018, with a roughly 800 Billion dollar deficit. 51% of this revenue was collected via the Income Tax, 35% via the Payroll Tax, 6% via the Corporate Income Tax, and 8% via "Excise, Estate, and Other Taxes".

Let's look at that 6% Corporate Income Tax figure. Right now, the Corporate Income Tax rate stands at 21% as per the "Trump tax cuts", lowered from 35%. In the four quarters of 2018 total corporate profits stood around 8.3 Trillion dollars. [2] 
8.3 Trillion dollars divided by 21% equals 1.6 Trillion dollars. If all companies honestly paid what they owed on the Corporate Income Tax, this sum would equate to roughly 50% of total USFG receipts.

Instead, it's only 6%. What it means that for every $8 demanded by the USFG in Corporate Income Tax, they only receive $1 (though obviously this is a simplification which doesn't account for tax exemptions that the government purposefully allows). Why is this? Because corporate lobbying and legal apparatuses are geniuses at saving their clients money by all means possible.

Note: the main kinds of revenue that "get through" and actually end up in the government's coffers are those paid by employees, or employers on behalf of employees. Simply taxing the corporations themselves based on what they earn and produce (which is what a VAT is) is a perverse recipe for rampant tax evasion.
When the receipts and outlays are both finalized, the government would likely realize that its UBI plan resulted in a $700 Billion dollar shortfall, paid for by deficit spending. And this is assuming that costs can be saved in other areas in the dramatic fashion that my opponent envisions.

But even that much is questionable. Let's take a look.

In 2018, Medicaid spent $597 Billion dollars. [3] In September 2019 it was reported that 71,000,000 Americans were enrolled in Medicaid. [4] This amounts to an excess of $8,000 per person covered per year.
While Medicaid is the largest welfare program in the United States, there are others. It has been calculated, and this calculation acknowledged by the liberal website PolitiFact, that in grand total the average American who is eligible for welfare is eligible to receive $17,347 a year. [5]

In short, your typical poor American (not counting veterans who are uniquely eligible for VA services) could stand to LOSE $5000 a year in benefits under this UBI scheme. Rather than eradicating poverty, you would simply be making it worse for those people who need help the most. On the other hand, if people have the option to opt out of UBI and instead keep their other benefit programs then the total savings that my opponent mentioned would be noticeably less.


There are other concerns as well. For example, as mentioned above Medicaid constitutes nearly half of the welfare that your average poor American is eligible to receive. That is to say, nearly half of this "welfare money" is going to be spent on healthcare. A poor American would not typically be able to "convert" these benefits into hard cash, and to do so would be a potentially criminal offense so most wouldn't bother anyway.
As a result, most of the benefits received from welfare more or less have to be spent on their intended purpose. Poor Americans have to make that "investment" in healthcare, pretending for a moment that the money actually belongs to them.

You've mentioned before that UBI beneficiaries aren't prone to blow their money on frivolous things or habitual vices. However, small studies cannot account for the behavior of over 250 million people who aren't being watched like hawks, who will get the money no matter how they spend it, over the course of years and years rather than, say, a study that lasts a couple of months.

Research suggests that when people get easy money they go wild, and fail miserably at meaningfully saving it. There are so, sooooooo many stories about lottery winners who had to declare bankruptcy within 3-5 years. This is money that isn't put away for retirement, or for future healthcare needs.
If UBI winners are allowed to spend their money on literally whatever they want, it's a reasonable assumption that at least a fair portion of these will spend the money foolishly. If some of these people were former welfare recipients who had formerly spent on the money on things they needed, like medical bills, then ultimately they would be worse off.


Finally, let me remind you the reader that claims of large-scale GDP gains from UBI are based upon scarce and imperfect studies, with there existing economists who dispute the basic assumptions behind this line of thinking.



Sources:





Round 4
Published:
Hello and thanks for your reply. Regardless of the outcome of this debate, I had fun doing so, and I hope you enjoyed it as well. Let's check this out.

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A) CLASH

My opponent said...

UBI plan resulted in a $700 Billion dollar shortfall
In you first couple paragraphs, you talked about how companies pay way less in taxes then the government would like. You also reference this to the VAT, and suspect that companies may not fully pay for it.

However, implementing a direct VAT will be different, in the sense that it will be directly applied to purchases. It won't be passed through to companies, and having the third party reviews and revisions. There are no loopholes, since this is a direct tax.

The fundamentals of this tax can also be traced to over 160 other countries, proving that the basic concept is realistic.

The option to opt out of UBI and instead keep their other benefit programs
Yes, that would be the recommended way to do it. You have to chose one or the other, not both.

Small studies cannot account for the behavior of over 250 million people who aren't being watched like hawks
These studies by no means prove that a UBI will work exactly as expected 100% of the time. However, studies like this provide an overview, or a base of expected outcomes. And in this case, we have well over a couple dozen studies supporting a UBI, each done differently with various factors.

In fact, there are over 460 papers analysis the effects of a UBI. What do most of them say? They say that a UBI is a great idea!

Lottery winners who had to declare bankruptcy within 3-5 years
And that's the same as a UBI in what ways?

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B) SUMMARY

In this debate, I have stated how a UBI will positively impact America is the economic and social sectors.

  • Grows the economy
  • Supports people
  • Softens the impact of 4th revolution
My opponents tried to counter this by saying that a UBI would be too expensive to pay for. However, I have proven over and over that it's not.

My opponent also stated how there is no evidence that a UBI will work in America, however, over 100 studies disagree, including an American state.

In conclusion, I wish my opponent the best of luck in his final text.

Thank you.
Published:
As agreed, I will not treat this as a full-blown round. However, I feel that I do have the right to give a brief answer to my opponent's last round of assertions.


implementing a direct VAT will be different, in the sense that it will be directly applied to purchases. It won't be passed through to companies, and having the third party reviews and revisions. There are no loopholes, since this is a direct tax.

Please note: as this is not a tax on corporate earnings but rather on the products that corporations produce/add value to. THE COSTS OF THIS TAX WILL BE PASSED ON TO THE AVERAGE CONSUMER, making the fact that this money is then given back to the average consumer rather pointless.


Yes, that would be the recommended way to do it. You have to chose one or the other, not both.

In this case, what's even the point of UBI? You can either receive money for the government for X purpose or be handed a wad of money of equivalent or even lesser value, which can be used by the recipient for purposes less helpful than the funds would've been used for otherwise. Even if the amount you receive is greater than the amount that you would've received via welfare, you are taxed via every purchase you make in order to pay for said UBI program, making it pointless that you received the money in the first place.

The likes of SNAP and Medicaid over lump sum payments ensure that money is spent on things of real utility. You can't trade SNAP and Medicaid for drugs (and, mind you, we have a growing fentanyl abuse problem in America; about 40,000 people OD and die on the stuff every year). You can't trade SNAP and Medicaid for a new car (whenever your old car suits you just fine). You can't trade SNAP and Medicaid for a newer model iPhone. Instead, you have to use it for its intended purpose: to ensure that you and your family have enough to eat, and some ability to afford medical treatment. If even some small percentage of UBI recipients would waste that money rather than using it wisely, then UBI's positively utility is thrown into doubt.


In fact, there are over 460 papers analysis the effects of a UBI. What do most of them say? They say that a UBI is a great idea!
460 papers concerning a hypothetical which has not been implemented on a large scale by any country, with projected outcomes based on economic assumptions which, as I've shown before, are not universally accepted. Then again, I suppose experts have the power to see into the future.



And that's all she wrote. I thank my opponent for this insightful debate and now we can do no more but entrust the final outcome to the voters.
Added:
--> @Swagnarok, @DynamicSquid
Sorry I did not get around to voting on this.
Having only skimmed things, I'll say that I am guessing con would have come ahead on arguments. While I don't think his Kritik of elder voters opposing it was valid (accidental Kritiks, are still Kritiks), when summarizing the cost of welfare he listed a couple different numbers, and pro went with the highest possible estimate which included scrapping the VA (as a veteran, I feel a bit like one of those aforementioned senior citizens on this)... Of course if UBI were implemented in such a way as to allow people to choose which set of benefits to receive, the costs of administering such things would not go away, so the cut costs would actually be greater reduced.
Maybe other points would have put pro ahead. I have not read the whole debate.
In general when doing value estimates, I do suggest aiming the calculations conservatively. Buying a lottery ticket for $5 you could win a million dollars, the math almost certainly says your expected return per ticket is around $2.5; worse you'll probably get nothing, merely if you play a few thousand times you'll average that $2.5 rate of return.
By the way, I suggest watching The Expanse. It does a good job in showing a few hypothetical systems like global UBI.
#4
Added:
/The government better keep it's damned paws off my social security!/
Sorry, reading some of the debate and that paraphrased common idiotic quote came to mind.
#3
Added:
--> @DynamicSquid
Thanks!
Contender
#2
Added:
--> @Swagnarok
Good debate!
Instigator
#1
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