How do the economics of providing Basic Income work?
I guess you would have increase taxes or provide lesser services? e.g., expect that basic income will cover some parts of the medical costs and provide a lesser health care for the average person. I'm guessing an implementation will be somewhere in between.
Well yes and no. The issues are complex and my economic schooling is woefully limited (merely Bachelor's level), but I recall the idea of a money multiplier [https://en.wikipedia.org/wiki/Money_multiplier] derived by MPC (Marginal Propensity to Consume) and MPS (Marginal Propensity to Save).
Take the following relatively contrived example. You insert a $1 into a vending machine and get a soda. The vending machine company takes that dollar and uses some to pay the soda company to replace the soda. The soda company uses the money to pay it's factory workers to make more soda. The factory workers use that money to buy other goods.
So you can see that on a whole, the $1 dollar you chose to spend actually had an impact on the economy of more than a dollar.
You can also see that depending on each what the "leakage" is at every level (or how much each entity, vending company, soda company, etc. choose to save instead of pass on) can drastically reduce the money multiplier effect leading to undesirable market outcomes (such as stagflation).
Bottom line (I think is), empowering the impoverished to be able to consume should drive market growth. So the initial investment of a basic income should pay for itself many times over.
Anyway there is more to this obviously, and this same interaction has implications regarding income-inequality, but I'll just leave this here as FFT.
The article discusses this. Basically you take the current set of services, and by removing the means testing and eliminating all the separate departments that facilitate them you save money and repurpose it towards this single program.
In addition, most western countries are sitting on a sea of wasted talent. About 40% of graduates in the USA never get jobs in their field[1], and it's similar world-wide. It's lower in the engineering fields, but that still leaves a lot of smart people with formal education experience doing things like staffing the reception counter at the local gym.
Graduates take these jobs because the alternative is the hell that is student debt collection, but these are jobs that could easily be done by less educated people. The more educated people have the capacity to explore the kind of home-grown science, arts and social projects that brought us to discover electricity, progress to giving women the vote.
We're sitting on top of a new renaissance because of short sightedness, but the potential boon of having that much home grown R&D could dramatically increase global wealth.
I guess you would have increase taxes or provide lesser services? e.g., expect that basic income will cover some parts of the medical costs and provide a lesser health care for the average person. I'm guessing an implementation will be somewhere in between.
Money has gotta come from somewhere.