Stuff You Should Know - Could A Robot Tax Win the War on Poverty?

Episode Date: March 24, 2020

An old idea – giving every resident of a country a set amount of money every month with no strings attached – became a hot item in Silicon Valley and on the 2020 campaign trail. Could it alleviate the impending job loss coming from automation? Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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over there and there's Jerry. And this is Stuff You Should Know, the podcast about universal basic income on the podcast. That's right, UBI, baby. Yeah, it's like the most bland set of words I've ever seen strung together in my life, but they have a big punch if you really dig into them. Yeah, I found myself kind of,

it was cool reading all this stuff and researching it because I don't think I had much of an opinion on it before and I'm gonna try to not get too opinionated this time, but... Now you're like, well, all poor people can just die off for all I care. No, a lot of this made sense to me, especially when you're talking about replacing

a bloated kind of broken system anyway. Cause my first thought was like universal basic income in addition to welfare and food stamps and all the other social safety nets, but like replacing it with something that's a little more straightforward, kind of spoke to me a little bit. Yeah, and I think that speaks to a lot of people too,

and we'll kind of explain a little more, obviously what we're talking about, but one thing that stuck out to me about that, Chuck, was what about people who are physically incapable of working, of making a living, and that this would be their only means of support or who have aged out of working and don't have a way to support themselves anymore.

Wouldn't you still need some sort of social safety net in addition to that for those people? I don't know if this would replace disability or would it? I guess it depends on who's plan. No, some people, there's a conservative economist who we'll talk about later on named Charles Murray, who's like, get rid of everything, this is it. Okay.

And he goes on to say like, while he wrote like a whole book about it, but I read kind of his synopsis of the book, but he kind of explains like, here's how this could actually work. He doesn't just say that, but there is a sense of, there's definitely a real disdain

for the bloated bureaucracy that is the entitlement or welfare system in the United States for sure. And I get the sense that it's on both sides. So that is kind of an appealing part of this, that this could conceivably replace it under the right circumstances. Yeah, and this also made me think a little bit

about the push for a flat tax that happens every so often where it's like, we've got such a convoluted tax system. Can we just settle on a very fair percentage that everyone pays across the board? The problem with that one, it's a great idea on its face. Sure, a lot of problems. The problem, the basic problem that I have with it is that it automatically makes it aggressive.

If you're a millionaire and you pay 10%, that 10% is gonna mean a lot less to you than if you're a person living near the poverty line. And that 10% means rent or food or something like that. You know what I mean? So therefore it's a regressive tax. And I've never heard a good way to kind of set up that flat tax to make it non-regressive

so that that doesn't just automatically introduce this other new convoluted tax code too. You know what I mean? Yeah, and if you look back at the history of flat tax proposals, it's usually some super rich old white guy that proposes it. Sure. So that makes you kind of wanna go like,

well, wait a minute. Right. Can you loophole your way out of that too? Yeah, well, no, I mean, it's not a loophole. It's more just, it's just super aggressive. Right. But that's a different episode. We've never done a flat tax episode, right?

No, I think we should do it. Yeah, we totally should. I'm actually kind of surprised we haven't. But yeah, so that's a totally different episode. But what we're talking about instead is called universal basic income. The universal is really important because there's different proposals,

but in a universal basic income scheme, the government takes X number of dollars, say $1,000 a month and mails that checkout to every adult, say 18 and over in the United States. Everybody. No questions asked, no strings attached. You don't have to be poor. It doesn't matter if you're rich.

It doesn't matter what you do with that money. You can go spend it all on crack if you want to. It's your money. Like the cops may bust you for buying crack or smoking crack or whatever, but you can use it for crack. Or ideally, you would use it in myriad other beneficial ways.

But I guess I'm just trying to point out, there's no guidance on how you're to use that money. That's your money. And because it's coming from the federal government and it's guaranteed basic income, you can rely on that every month. And so you can start to build your life around knowing that at the very least,

you're gonna have $1,000 tax free from what I understand from the government. That would be so United States to give you $1,000 a month and then take back like 300 of it. Right, exactly. So this was, if you were a fan of Andrew Yang during his, I don't wanna say brief presidential bid.

Not long enough, I'll tell you that. You like Yang? I like Yang. Yumi was crazy for Yang, but I just thought his approach, his ideas were very level headed, were very apolitical. I just thought he was, I thought he was great. Yeah, he spoke to me too.

But he called it the freedom dividend. And that's what we're talking about, $1,000 a month. No questions asked. If you were Bill Gates, you get $1,000. If you don't have two pennies to rub together, you get $1,000. And we'll talk, this is one of the few episodes, I think where the history addressing that later

kind of works. I thought so too. But there is some history beyond him. And he's not the only person there. A lot of the Bill Gates' and the Zuckerberg's and the musks of the world. Yeah, it's huge in Silicon Valley right now. It is, in Silicon Valley, as we will learn,

is one of the areas that they would, that's in the crosshairs for providing this money to a large degree through taxes, because one of the fears is, and it's a legit fear, and I know in your existential risks podcast series, you talk about automation and robots and things. But the fact is, we are automating more and more. Some say that in the next 12, 10, 12 years,

that about 33% of all working Americans will lose their jobs to robots. Do you realize what an increase in unemployment that is? Huge. 33%, I think right now we're at somewhere around 3% unemployment, which is really low. It's close, very close to full employment, if not statistically full employment.

33%, all of a sudden, and how many years did you say? It said 12, I mean, that's an estimation. So that's probably like a sky is falling kind of scenario. But there are a lot of smart people out there who say, okay, maybe 12 years is a little soon. Maybe that percentage is a little high. Definitely some people will be put out of work in that time. But let's say, let's expand that window to 30 years,

or 50 years, then we might start getting into some really high percentages of people who are being put out of work. And not like, you could go over to company B, your job's just gone because we develop machines that are way better and way more efficient and way cheaper at doing that than you are. And so what do you do with those people?

And it's not just a question for governments of what do you do with that physical person who's now poverty stricken because their job doesn't exist any longer for people. But all of the social safety nets and a lot of other stuff that we have in this country that those people would need to participate in, those are funded by payroll taxes and unemployment tax

and stuff that is a tax on labor and employment. And so if you have a person whose job doesn't exist anymore, you can't tax that labor, you can't tax that employment. So now you have the problem of somebody who says, I need this assistance. And then the way of providing that assistance has just been removed because we automated that job away. Right, and there are some people like Bill Gates

that are saying, hey, companies that are automating all this stuff, you're avoiding all these payroll taxes now, you should pay it on the robot as well, which what I didn't see necessarily was whether or not that's, and I assume it is, one of the big benefits of automation is that you don't have to pay those payroll taxes any longer. If you're in a business?

Sure. That'd be a huge, yeah, if you can get rid of people, people are generally expensive. And if you were just strictly a utilitarian business owner, it was, it's very much in your favor of automating whatever jobs you can. Yeah, you're not paying payroll tax, you're not having to pay for that person,

the portion of their healthcare. You don't have to worry about unions, striking, people getting sick. Right, so as we become more automated, there are people speaking up and saying, sure, there's also a lot of job creation that happens with automating things, but the person that is taking care of your sanitation every week,

if that was replaced by a robot self-driving truck and clamper that dumps the garbage in there. The clamper trademark win-co. That person is not necessarily going to be the person that can be like, hey, I'll just get a job building these robots too. Right, right, right, yeah, which is ultimately kind of a, it's a supplementary part to this whole discussion of,

we're still gonna need people to do things like build robots. So how much of this should really be, how much of this attention and effort should be directed toward training people for this new economy? Yeah, and it's the same idea when you talk about alternative energy, teach the coal miner to build wind turbines. In an ideal world, all that happens very seamlessly

and you're just like, well, let's just take all these people that are out those jobs and give them the new jobs, it just doesn't work that way all the time. Right, right, and yeah, and I mean- You can't idealize that. No, you can't, and you shouldn't. Like these need to be like Frank Stark sober discussions that we have about this because-

We're a little drunk. We're talking, it doesn't hurt, maybe. Just to loosen up, you know. Some nice, maybe some nice homemade thumb print cookies with the Hershey's Kiss in there. Oh man, those are good. Just to get a little peckish. But yeah, we do need to talk about this stuff

because we're talking about human beings and who are gainfully employed now who may be, again, poverty-stricken because their job doesn't exist in the next decade or so. And yes, we need to be thinking about this now. And then other people chuck say, okay, that's a real possibility this robot taxes automated economy that we're clearly moving toward.

We don't know when it's going to really kick in. Is it gonna be 12 years? Is it gonna be 30? Is it gonna be 50? We don't know, but basically everybody agrees that that is the direction that we're heading. Yes. You're gonna have to be basically cuckoo

to argue against that, right? It's just when are the effects really gonna be felt? Other people say, yeah, that's a big problem and I'm glad we're thinking about it. But we have had poor people in the United States and a huge inequality gap basically since World War II. It's a national blemish of shame on our character, our country's character, that there are people

that are just gobsmackingly rich and other people who are gobsmackingly poor and they deserve to not live in poverty because they are citizens of the world's wealthiest economy. Just the fact that they are Americans says that they shouldn't have a life of poverty because we can provide for them at least enough so that they don't have to be poverty stricken.

And that's another argument for universal basic income as well. One that was championed by Martin Luther King. Look, we can take care of people and we should. We have a moral obligation to. And I just realized I suddenly started just talking like Bernie Sanders. Did you catch that like stammering kind of delivery?

That was weird. My hair turned white just now, didn't it? And shaggy. I hope it grows back to normal. So maybe we should take a break here in a minute. Wait, what about my hair? Do you think it's gonna go back to normal? Let's take a break now.

Okay. Bernie. And, cause that was a good setup and we'll talk a little bit about what exactly is in some of the pros and cons right after this. ["Snowflakes Show"] On the podcast, pay dude the 90s called David Lasher and Christine Taylor,

stars of the cult classic show, Hey Dude, bring you back to the days of slip dresses and choker necklaces. We're gonna use Hey Dude as our jumping off point, but we are going to unpack and dive back into the decade of the 90s. We lived it and now we're calling on all of our friends to come back and relive it.

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Listen to Hey Dude, the 90s called on the iHeart radio app, Apple Podcasts or wherever you get your podcasts. Hey, I'm Lance Bass, host of the new iHeart podcast, Frosted Tips with Lance Bass. The hardest thing can be knowing who to turn to when questions arise or times get tough or you're at the end of the road.

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Listen to Frosted Tips with Lance Bass on the iHeart Radio app, Apple podcast or wherever you listen to podcasts. All right, so we talked about the Freedom Dividend from Andrew Yang and his team and where you get a thousand dollars a month, whether you're working or not, with your rich or poor, And the idea is that it would replace the safety net programs

that all have strings attached. So if you are a part of the SNAP program and you get food stamps, you need to prove that you are below a certain income level. If you're getting unemployment, you have to show you're looking for work. If you're getting social security, then you have paid into that for a number of years.

If you have disability, then you have a doctor vouching for you. This is no questions asked, which sounds radical to some people, but other people say it just makes perfect sense. Yeah, and Yang's not the only one to address this. Like you said, it's kind of a hot topic in Silicon Valley and has been for the last five, six,

seven years to the point now where it's probably like old news and everybody's moved on to something else, like debtor's prisons are the new thing in Silicon Valley. But one of the co-founders of Facebook named Chris Hughes, he wrote a book, I can't remember what it's called. It's like, I read that it was half memoir, half basically policy layout plan.

Oh, like here's what I would like to do. Yeah, and it was basically arguing in favor of a universal basic income. And this guy put his money where his mouth is, he actually funded a pilot program in Stockton, I think. He said, here, take four families. Right, exactly. I'm gonna give them $100 each.

And we'll give them $5 each a month. No, his was $500 a month, but he hit on something that I saw other people have hit on too, that in addition to universal basic income, that's pretty good, but you have to go a little further and people would need to have at least catastrophic health insurance

to where if they needed surgery or long-term care or something like that, they had insurance that covered it, that those two things would probably help people get by. And then there's plenty of other people running experiments on the stuff that we'll talk about later. But the general idea is that, yes,

you just no questions asked, no strings attached, you get some amount per month just for being an adult. Some other plans say, maybe per household, it'd be a good way to cut it down. Or maybe if you make less than a certain amount of money. Sure, but one of the things that about universal basic income, typically is that there's no cutoff for wealth.

Everybody gets it just for being an American. And that it isn't per household, it's per individual, which really is beneficial for a whole segment of society, which are unpaid caregivers. Everybody from stay-at-home moms to people who are caring for their parent with Alzheimer's. Those people get $1,000 themselves. So now all of a sudden a household with two adults in it,

who pool their resources has $24,000 a year rather than just 12. Yeah, so that's one of the pros. Another is, if you are poverty stricken, if you're one of the one in eight Americans, which is striking that lives below the poverty line, you are probably not doing a lot of things to meet your health needs.

You're probably not getting up every day and saying, I need to work out and eat really healthy. We've talked about the food problem in this country and how the poorest people eat the biggest garbage diets because it's cheap. You're not thinking, you're not eating well, you're not exercising, you're not paying as much attention to your kids doing homework.

Sure, if you wanna idealize everything, you should be doing all those things. But if you're struggling day-to-day just to live and survive, a lot of these things go by the wayside. So the idea is that a universal basic income would provide you with enough of a buffer to where you can tackle some of these other things or you can maybe go back to school and get that degree

or start your own business, you know? And another thing for the very, like the poverty-stricken working class, they would be given this buffer or this check that everybody gets for them would be like a floor that would allow them to say, you know what, I don't have to take this job because I'm not desperate any longer

to put food on the table. So I can hold out for a better job that affords me more dignity or that isn't actually dangerous to do because the working conditions are so poor. So there's a whole employer exploitation that would largely dissolve when, because the working class,

the really right around the poverty level working class would have this kind of buffer that they could use to negotiate better working conditions in higher wages. Yeah, and we should point out, everything we're saying here, we should have this term in front of it is this is the idea that these things will happen. Right, this is all in theory.

Right, exactly. The one thing I didn't see listed as a pro, which I think is an obvious one is if you make a certain amount of money, then I imagine a lot of people would treat this 12 grand a year as something that they could just spend, thus propping up the economy or donate.

Right, yeah. I would hope that if you were very wealthy that it would become kind of trendy to just donate this part. Yeah, I haven't seen people talking about that in anything that I've read, and that just seems like a real obvious one to me. Yeah.

Because a lot of people that are doing pretty well and they might get a tax return and that's like TV time or whatever. Right. Let me go buy that flat screen. Well, actually, if we can throw out one of the cons, it actually dovetails with what you're talking about that there's a concern among economists

that if all of a sudden every adult over 18 in America was getting $1,000 a month, they would be like, heck yeah, I'm going to get a TV this month, next month I'm going to go get some clothes or I'm going to save up a few months and get a car much sooner than I normally would have. Yes, because if all of a sudden

a couple hundred million Americans are all doing this, spending more money way more than we had been before. Oh, I see where this is going. That we would outstrip, demand would outstrip supply and so the prices of goods would go up in inflation. And so it would cancel out any benefit there was from the universal basic income

because we would have all caused inflation to make prices rise and the cost of goods increase. That's valid. Oh, totally, it's very valid. But what's great about it is people are thinking about it. You know what I'm saying? Yeah. The other thing I like about this too is

it's not just liberals who are crazy about this, libertarians too and some conservatives as well are totally cool with it too for a number of reasons. Libertarians like the idea that it would conceivably replace that bloated welfare state because libertarians are not ones for big giant government bureaucracies. Correct.

And also in the same vein, that thing about the universal basic income just being like, here's your money, go do what you want with it. Not, here's some money, you have to spend it on food. And wait, you have to spend it on specifically these types of food, but libertarians love it. So because you're all, you're just saying like, I'm not,

I'm the government and I'm telling you how to spend this money on this particular kind of food. Here's your money, do what you want with it, which is just libertarian dream kind of stuff. Yeah. And that economist Charles Murray, you said he was a conservative economist. He's the one that's like, man, this would cost less

than Social Security, Medicare, Medicaid, the SNAP program and the entire welfare state. We could get rid of it. And this would actually be better for us in the long run. Yeah. And cut down on just the bureaucracy and the paperwork. And it's just, it's a much cleaner system. Yeah, just the fact that the bureaucracy itself

would be slimmed down, which ironically would put a bunch of people out of work. That in and of itself would be a cost efficiency savings, right? Yeah. And I guess there's a, I was looking, I was like, well, how much do we spend on entitlement programs in the United States?

No one knows, apparently. There's like some, I saw a heritage report, which I believe is a conservative think tank. They were saying that actually there's like a shadow welfare program budget that's like a trillion dollars in addition to the other trillion and a half dollars that's on the books or whatever. So if that's all correct, then this is about the same

because the rough estimates are that it cost about $2.3 trillion a year to mail a thousand dollar check every month to every adult over 18 in the United States, roughly 200 million adults, $2.3 trillion a year. But again, you're sending the same checkout to every single person over age 18. And that in and of itself could be very easily automated.

So it would be cheaper to actually do even if the actual amount of money you're shelling out is roughly the same. Yeah, and another one of the pros, and we'll talk about some of the limited studies they've done on this, but an interesting one in Kenya is they had a lot of malnourishment due to drought. And so the government said, you know what?

Instead of giving food aid to vulnerable households, let's do a direct cash test, basically. And they found that about 90% of these people, they bought some food, but 90% of them also used it to launch small businesses or to restock their herd of goats or whatever, kind of reinvest in themselves. And that's one of the, again, the idealized version is people use this money in an entrepreneurial way.

Yeah, and that's, I mean, these little pilot programs are just coming back with really mixed results. But one of the ones I saw, I think it was like a Nathan Heller piece in New Yorker from a couple of years ago, and he was talking about that Kenya experiment. And he pointed out one heavy drinking resident used that money not to go on a bender, but instead to buy a taxi cab and start his own taxi cab business,

bought a couple of milk cows and did a couple of other things that were fairly surprising, considering most people would expect that he would just squandered it all on booze or gambling or whatever, whatever you might expect somebody like that to do. And that's one of the big fears and one of the big arguments against it is, I mean, is it really a good idea

to just give $1,000 a month, no strings attached to absolutely everybody, including people who are addicted to whatever, including people who are terrible with money, including people who are con artists, just because they're Americans. And that's the, I don't know if that's one of the flaws, but also simultaneously one of the benefits of it is, yes, the answer is yes, everybody gets it.

And then it's up to that person to spend it in the best possible way. All right, should we take another break? Sure, man. All right, we'll take another break and talk about the criticisms and more, like how are they gonna pay for this right after this? And I hope you have a great night, thank you.

Have a great night. Have a great night. Let's do this. Ensure that there are thousand of us unただlights in this world. belly of pride and waif the bold the projecting eggplant ST that we'll make 집aip the

best he was ever made available. As well, our achievers have a brand-new It's a podcast packed with interviews, co-stars, friends, and non-stop references to the best decade ever. Do you remember going to Blockbuster? Do you remember Nintendo 64? Do you remember getting frosted tips? Was that a cereal? No, it was hair.

Do you remember AOL Instant Messenger and the dial-up sound like poltergeist? So leave a code on your best friend's beeper, because you'll want to be there when the nostalgia starts flowing. Each episode will rival the feeling of taking out the cartridge from your Game Boy, blowing on it, and popping it back in as we take you back to the 90s. Listen to Hey Dude, the 90s called on the iHeart radio app, Apple Podcasts, or wherever you get your podcasts. Ah, okay, I see what you're doing. Do you ever think to yourself, what advice would Lance Bass and my favorite boy bands give me in this situation? If you do, you've come to the right place, because I'm here to help. This, I promise you. Oh, God.

Seriously, I swear. And you won't have to send an SOS, because I'll be there for you. Oh, man. And so, my husband, Michael. Um, hey, that's me. Yep, we know that, Michael. And a different hot, sexy teen crush boy bander each week to guide you through life, step by step. Oh, not another one.

Uh-huh. Kids, relationships, life in general can get messy. You may be thinking, this is the story of my life. Let's stop now. If so, tell everybody, ya everybody, about my new podcast and make sure to listen so we'll never, ever have to say bye, bye, bye. Listen to Frosted Tips with Lance Bass on the iHeart radio app, Apple Podcasts, or wherever you listen to podcasts. Alright, so if you are against this, you probably fall into one of two camps, or both. One is that it's expensive, and how are you going to pay for this?

Mm-hmm. And the other is sort of combined with a lot of ways that certain Americans think, which is like, you shouldn't get anything for free. There are no free lunches. Right. And if you do that, then people aren't going to work. They'll just find a way to live on that 12 grand a year, and it won't change anything for them. Yeah, which is, you know, apparently some of the data that's coming back from these trials are, like I said, they're mixed. So some people spend it on a taxicab and start their own business, and other people are like, I don't have to work at all.

This is great. And that's a big problem. You don't, in a productive economy that relies on human labor, a government program that basically pays people not to work is disastrous. Right? And that's one of the big criticisms of the current welfare system is that it traps people in a cycle of poverty by disincentivizing them from working, where if you reach a certain point with your wages, you lose all of your safety net, you know? You lose your food stamps. You lose your healthcare.

You lose unemployment checks. You lose all that stuff because you now are employed. And on the one hand, it makes sense because you don't need support supposedly, but the problem is when it really washes out into practicality, you still do need that support, but you've just been booted off of this stuff for working, so it's actually better for you to not work. People say they're worried about the same thing with universal basic income. Yeah, I mean, I guess what's important is the overall picture because there's the idealized version where you give people $12,000 a year, and they're like, man, I was laid off. Now I can afford to go back to school and make my rent every month and get a better job, or now I can concentrate on health and wellness and invest in my children,

or I can care for my mother or my family member who's old, or I can be a stay-at-home parent. Or just live less stressed. Yeah, I mean, those are the idealized versions. There are also, of course, going to be people that gamble away or drink it away or drug it away. So the idea is you look at the overall picture. Does the good outweigh the bad or vice versa? I can't believe I just said that. I like it.

It's got a little one-yap to it, you know what I'm saying? So it's that overall picture, but I think we need to talk a little bit about how it would be paid for. We talked a little bit about it. Redirecting those safety net programs right now would be part of it. And this is like one of Yang's proposals, there are a bunch of different ones. A value-added tax of 10%, which I read up on that a little bit. It's a little bit confusing to me. Yeah, me too.

Should we talk about it, what it is? Yeah, I think just a little bit. Essentially, so from what I gathered, and just correct me if I'm wrong or you have a different understanding, but at each stage of production, the thing is taxed. So as like a raw material is sold to a manufacturer to make candy, I think I saw, that cocoa and all that stuff is taxed at 10%. Right? Well, then the manufacturer turns that cocoa into candy and they sell it to a retailer.

It's taxed at 10%. Then the retailer sells it to the consumer, it's taxed at 10%. And the government doesn't get 10%, 10%, like 30% of the total value. They get overall 10% of the total value. That's right. And that's this value-add tax, and it's like they use it in Europe and have for decades now. Basically, everyone but the US has a value-added tax. The great part about it is there's no way around it.

You can't hire from what I saw, you can't hire a really great accountant to find loopholes in the tax code. You're going to pay this 10% tax. It's a sales tax for every stage of a product's life. So companies can't get away with not paying any corporate taxes because they're paying this consumption tax. The problem with it is you, the consumer, are still paying that ultimate 10% tax on the end. That's coming out of your pocket, even if some of it's going to the business and some of it's going to the government. In addition to sales tax. You're still paying that.

Right. I don't know if it's in addition to- I don't think it replaces it, does it? Oh, okay. It might be in addition to. But the thing that Yang's plan, this was his big thing to use a value-added tax to pay for this basic income, was that this would be mostly on luxury goods and that basic staples and necessities would be exempted from this value-added tax, which would prevent it from being a regressive tax.

All right, that makes sense. Yeah. So Yang also said let's tax investment income, which would obviously target a certain very small percentage of the country. How about we tax carbon polluters, put a carbon tax? Right. Some people like Bill Gates, I think I mentioned earlier. He's like, hey, all these companies that are replacing people with robots and skirting payroll taxes and medical insurance and stuff like that. You tax them with a robot tax.

Right. Every robot that they replace a human being with or several human beings would have to pay a tax for every single one or software or something like that. The problem that I saw with that is that no one has any idea how to actually quantify it. Like you can say this robot replaced five factory workers on the factory floor. That's easy enough. But what is like software that helps transfer phone calls or something like that? How many people does that displace? It's really hard to say, which is from what I can tell, at least on the Reddit Yang gang thread, they explained it that like that's why Yang went with a value added tax because corporations can't get around it.

There's no way to loop all your way out of it and it's much more quantifiable than taxing software. Right. But the robot tax still captures that same sentiment that the people who are the ones who are automating away jobs are the ones who need to pay for the people who are being put out of jobs. That's kind of the spirit of the robot tax. Right. As far as studies, it's sort of been all over the place. There haven't been, I mean, there have been some studies in Canada and the U.S. and in Europe that seem to indicate that the, hey, these people just won't want to work. Is it really going to be a problem?

Like I said, some people will, of course. But overall, these studies are coming back saying, no, people are going to use this in the spirit as it is intended generally. Yeah. So, Rue's helped us put this together. He pointed to the Alaska Permanent Fund. I'm not sure where he saw that. That's so small though. It's kind of a tough. It's not exactly apples to apples. $1,600 a year in 2019.

Each resident of Alaska received $1,600. It is just such a small amount that you couldn't possibly really work less because of that. I bet Hippie Rob would find a way to get by on $1,600 a year. Some people would for sure. You can go fish with your bare hands in Alaska. So maybe that could supplement things. But the big question is, yeah, what really happens when you give a bunch of people, a large group of people $12,000 a year, would that mean that they would stop working and not even necessarily stop working but work less?

And from what I saw, it seems to be on both sides of the aisle, or both political stripes for economists, that yeah, there probably will be a reduction in worked hours, but that it would be nothing that would stall the economy out. People are not going to just quit jobs and droves. They just might work a little less. But is that necessarily a bad thing? Like what are they doing with that time? That's kind of what is the key factor. Sure.

Are they volunteering? Are they sitting around playing PlayStation games? That's some other economists have said that. I can't remember which one I saw. There was a technology review article I think I saw that really kind of, they didn't poo poo the concept. They just poo pooed some points of it. But one of the things they pointed to is that there are plenty of studies out there that show that when people reduce work hours, they just sit around and watch TV, you know? USA.

You know, but that's not really what you want to do. But again, if you're a libertarian economist, you would say, well, you know, that's where people... That's your right. That is your right. But then you should probably turn in your economist shield, because if you're an economist, you kind of want people working. Sure. Unless you're John Maynard Keynes.

He wrote, we've talked about him before, Keynesian economics. Oh, sure. Usually the super like government can spend its way out of a recession kind of stuff. That all came from Keynes. Yeah. And in I think 1933, Keynes wrote this essay, oh man, I can't remember the name of it, but something about, you know, work in our grandchildren. Something about Team Yang.

He said, he basically predicted in 100 years back in 1933 that we would not be working any longer, because we would have automated all our jobs away, but everybody would be living a life of leisure. And we missed that mark big time for all manner of reasons. But you could kind of look at Keynes' prediction and say, well, maybe he was off by 50 years. Maybe it's not 100 years, but the same thing's going to happen 50 years, or 150 years from when he predicted it back in 1933. And so some people say, okay, this robot tax idea in principle works really well,

or it could work really well, but we are way premature with this. Right. That this is something we need to start doing 30 years from now, not now. Yeah. And that it would actually harm our economy if we do it now, because there are people who will stop working. We would be paying some people to not work anymore, and we still are adding hundreds of thousands of jobs a quarter in the United States alone.

We still need human labor, so we don't want to prevent people from doing it. But when we do automate jobs like gangbusters, then yeah, we should take a significant amount of that wealth that's going to be generated by these robots, and not only make sure that people have their basic necessities provided for, why not just make it so every single person in America is wealthy compared to our standards here today, just because we have robots doing all this work and generating all this wealth for us, why not just share it for everybody? Why should just a handful of people who own the robots have all the wealth

while everybody else has been put out of work? Why not just make it so everybody's wealthy because the robots are doing all the work for us? I agree. And that has caused some people to say, well, wait a minute, it makes you wonder why Silicon Valley is into this whole thing as much as they are right now. Have they seen that this may be a road that we follow in the next 20, 30 years, and they're trying to stem the tide now and say, hey, how about we give you guys $10,000 a year?

Actually, how about the federal government gives you guys $10,000 a year? Just to basically be bought off now, cheaper now than we would be in the future when the real problem starts to come along. And so there are some people who say it's a good idea in principle, but it's too soon and we need to be wary of people who come bearing gifts of $10,000 a year today. Interesting. I thought so too. We promised a little history.

I think you mentioned Keynes, and the late 1930s, there was a free market economist named Milton Friedman, I'm sorry, Milton Milt Friedman, who had an idea sort of like this to ensure that people had a minimum standard of living, but this was through, it was called a negative income tax. So it essentially works kind of the same way. Once you do your taxes, if you were below a certain threshold, then you would actually get money from the IRS.

We mentioned Martin Luther King. What might surprise you is that a little guy named Tricky Dick Nixon. Isn't this surprising? Very surprising. We were surprised by something else recently. What was that? He was the first president that had the first African-American guest in the Lincoln bedroom, who was Sammy Davis Jr.

That's right. Yeah. So in 1969, Nixon said, hey, how about this? Why don't we start a program where it's the equivalent of about 11 grand a year today, where we pay people $1,600 a year plus food stamps if you are a family of four that doesn't have an income? Yeah. Basically, I mean, here's a quote that says, what I'm proposing is that the federal government build a foundation under the income of every American family

that cannot care for itself in wherever in America that family may live. This was Richard Nixon saying this. Yeah. I mean, that's universal basic income to a certain degree. It's not everybody, but he's saying, hey, if you don't have any money and you're an American, then we'll give some to you because you have a right to have a very basic level of income. Yeah. It was called the family assistance plan that actor was or that bill was.

And it went and made its way through Congress and Congress said, no. Senate said no. But there was one part of it that the Senate, I guess, said, oh, we like this though. It was a work requirement. And so from that point on, if you wanted federal assistance, you had to prove that you were working and that still survives today. And it's been upheld by not just GOP presidents, but Bill Clinton made sure that that was part of his welfare reforms as well. Yeah, sure. And it came from that.

So they said, no, we're going to do away with this guaranteed minimum income, but we like the work requirement part. And that was the legacy of it. Yeah. I mean, one thing is for sure, if this has any traction in the United States, there's going to have to be a lot more data behind these trial programs. And even if that data comes back in the positive that this would be a good thing, there would need to be a sea change of thought change. Right. And there's been a lot of Americans about giving people money. Yeah, we would basically have to say like the point of life is not work, which is not the way Americans think these days.

I mean, we might say that we don't, but no, we actually act differently. Like working is largely the purpose of life. Yeah. And there's a lot of like pleasure to be gained from like feeling productive. And I think even if everybody did have, it was able to just stop working and be wealthy, people would still find stuff to do. You'd still go like garden or learn to paint. Like you wouldn't just lay around and smoke opium all day or anything like that. Most of us wouldn't, right?

So I think there is like a lot of value to work, but I forgot what started this off. What did you say? When I was saying there would need to be a sea change of the fact that the government is giving handouts to people. Right. And that the value of work was divorced from the right to live life wealthy or cared for. It would require an enormous change. Although there are programs in place right now that kind of resemble this. And some people say, hey, there's this thing called the earned income tax credit.

Right. And that where it's basically Milton Friedman's negative income tax thing. And you know, Friedman, he was basically one of the architects of neoliberalism. Yeah. So this negative income tax plan he came up with kind of became the earned income tax, which is earned income tax credit, which is if you're below a certain level of income, not only do you not have to pay tax, this tax credit actually pays you back. Like you get a check from the IRS rather than vice versa. Yeah.

And then it fades out as you go, you know, you get further along the scale of wealth until it's, you don't get anything and you're paying lots of taxes. Or that's when you got all those great loopholes. Right, exactly. No, that's after that part, you know, that's beyond like a middle class and upper class. That's that 0.1% stuff. Right. So some people are saying, forget this universal basic income. We've already got this earned income tax credit.

Let's expand that. Right. So more people are able to get it. One of the big criticisms is that it incentivizes people to have children that they might not otherwise have. Do you think that's true? Well, yes, I think it is. From what I've seen, it is at the very least, if you're talking in hypotheticals, like we were talking about the idealized version. Yeah.

It's at least as real as that. Like there are people that are like, man, let's go have a few more kids to get those sweet write-offs. Well, here's the thing, let me put it to you like this. If you're a family with three or more kids, your maximum earned income tax credit is $6,318. If you have zero kids, your maximum is $510. Yeah, but kids are nothing but a money drain. Totally true, and so you remember that conservative, the conservative economist, what was his name? Charles what?

Murray? Yeah, Charles Murray. He pointed out that under the current entitlement welfare system, there are programs where you get additional benefits if you have kids, which theoretically can incentivize somebody to have a kid that they might not otherwise have. One of the things that he said, this is a great thing about universal basic income is it does away with those entitlement programs and replaces it with that money. And now all of a sudden, you're disincentivized to have a kid you wouldn't otherwise have because all you have is that 10 grand, and you can keep it all yourself or you can have a kid and have to support your kid with that 10 grand because nobody else is going to help you support the kid. There's no benefits. You don't get 10 grand plus two grand for having a kid.

You get 10 grand no matter if you have zero kids or 10 kids. So in that sense, it kind of disincentivizes people from having kids where they otherwise wouldn't, but and this is why some GOP people love it like that whole focus on the family thing. Although the GOP doesn't have the market cornered on families. That's not what I mean to say, but there is a bit of a focus on traditional families and family values. And this is, I think, who he was kind of speaking to was if you are a couple and you pull your $10,000 together a year, you've got $20,000, but you're also just having to pay rent once, pay for maybe a car, maybe two, groceries for the whole house. Like there's an economy of scale to building a family.

And so now it makes sense to have kids more than it does just by yourself with that 10 grand. You know what I'm saying? Yeah, but I tell you what, if you want to save all your money, don't have kids or pets. Right, right. That's just basic economy 101. Yeah, keep all that sweet dough for yourself. Yeah, exactly. I'm curious to know if, like you were asking, if that's like, if that actually does happen in real life and to what degree. I don't know, man.

I just have a hard time believing that there's that much like planning of like, well, let me think here. If I have three kids, I could get back all this tax money and they would cost me this much. And here's what the difference would be. So I'm coming out ahead by like $1,000 a year. Right. And even if there are people doing that, like what proportion of the general population do they represent? And is it really enough to prevent, you know, taking risks that could have huge payoffs like something like a universal basic income? Just because a few people are going to do it wrong, you know?

I would, for me, the answer is no, but I'm not fully sold on a universal basic income now. Right. I'm not either. And I'm also for someone who just said, keep all that sweet money for yourself. This is coming from someone who has four pets and an adopted child. Right. It's true. So I'm the biggest chomp in the history of chomps.

Well, and also if we're getting all like, you know, self perspective and all that stuff, we should probably say it's a lot easier for us to be like, pshh. We need that universal basic income now because you and I don't necessarily need it, but there are plenty of people who really do need it. Oh, sure. And we would put it to give you. So maybe we should just keep our fat mouths shut. Well, I would like to think that if this kind of thing came along, I can pay my bills and I would donate that money. There you go. Just start now, Chuck.

I already do. Chuck, what a great guy. Yeah, you know. You got anything else? What I feel guilty about is not donating it enough time. Oh, yeah. You know, because like donating money is great, but feet on the ground volunteer work is very valuable and valued. And the best thing you can possibly do is walk around volunteering and throwing money.

Yeah. Just tossing it. Just like, hey, I'm here to clean up the dog kennels and here's a wad of cash. Exactly. But you have to do it like De Niro. Like, you know, you shake somebody's hand and all of a sudden you've got like a 50 in there. Whoa. How did that happen?

And wear a suit while you're cleaning up the dog kennels. Oh, man. I wish I was cool enough to palm a $50 bill without noticing. All it takes is practice. That's right. Okay. Well, if you want to know more about universal basic income, just move to Silicon Valley and start talking to people. Although I am curious if it's not hot any longer.

What's the new thing? Let me know Silicon Valley. Okay. Let us know. And since I said, let us know Silicon Valley. It's time for Listener Mail. I'm going to call this from a listener I met in person recently. I've been doing, as you know, a little bit of alumnus work with the University of Georgia.

Doing some little speaking thing the other night. Nice. How'd it go? It went great, you know. It went really, really great. I had a lot of fun and I was able to speak to about 75 semi-recent graduates about podcasting. That's awesome. And everyone was super cool.

There were a lot of stuff you should know, people in the audience that were just delighted to get in a small room at a whiskey distillery. Oh, that's a great place for it. Big shout out to the ASW Distillery, another alumnus. Nice. They make some good stuff. You know what's something you'll get a kick out of? What? Is during the Q&A, one of the first questions they said was, what was your reaction when you were first asked to come back and talk to the university students and stuff like that?

Right. They said my first reaction honestly was, what took you so long? Nice. I've been waiting for years for UGA to, you know, show me a little love. Stick it to them, Chuck. They laughed. They thought it was funny. You put them on the spot?

I did. I like it. But this was from Greg Bell and I met Greg afterward and he told me a great story and I was like, you know what, send that in an email and I'll read it. So he said, hey Chuck, had the great pleasure of meeting you at the young alumni event. About 10 years ago, I was about six months away from graduating high school and had big plans to become a long haul truck driver. I stumbled across your podcast while looking for things to listen to on the road and was hooked. Your show was incredible to me because I didn't think I liked learning, but every Tuesday and Thursday morning I found myself refreshing my podcast feed just to see what you guys would be talking about. Over the next few months back then, I came to realize that I loved learning and I loved telling other people about the things I was learning from you both.

I talked about you so much that I got my dad and my wife to both start listening. And now we have conversations every time we're together about what episodes we've been listening to. We love this stuff when families... I'll eat this up all day. Yeah man. Family that listens to stuff you should know together. What's the second part? Rarely argues.

Sure. I think that's the same. You were both a major factor in me ultimately making a decision to stay in school and get my undergrad degree in history. Today I am an educator at an art museum in North Georgia and I seriously can't imagine how much different my life would be if I hadn't found stuff you should know when I did. Thank you both so much for the work that you do and the impact you have on so many people around the world. If you ever find yourselves in Cartersville, would like a tour of the Booth Western Art Museum. Oh that's a good one. I would be more than happy to make that happen and that is from Greg Bell and I met Greg and his wife and they were just great.

Super super cool. Greg Bell is one of the most UGA names I've ever heard in my life. What do you think? Aside from maybe Tucker Carlson and I don't think he went to UGA but that's a different side of UGA. Greg Bell is like straight ahead UGA name. I like it. Greg Bell, freshman. I think I might take him up on that museum tour.

You love your museums. I do, I do. Just got to make it up to Cartersville. That's the downside. Oh that'd be great. Well, if you want to get in touch with us like Greg did, apparently show up at Chuck's speaking gigs at whiskey distilleries. Yeah, there's more of those coming up if you're a UGA alumnus. Pay attention.

That's awesome, Chuck. Seriously, pay attention everybody. And if you are not a UGA alumnus or you can't make it out to one of these things, you can also get in touch with us via email. Wrap your email up. Spank it on the bottom and send it off to stuffpodcastatihartradio.com. Stuff You Should Know is a production of I Heart Radio's How Stuff Works. For more podcasts from I Heart Radio, visit the I Heart Radio app. Apple podcasts are wherever you listen to your favorite shows.

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