RE: What's the cost of universal basic income? A better question is what's the cost of not having it.

Scott
I just want to say that I'm not totally against your position. In fact, I could potentially support it after I see the details of the plan. I think at the very least we should make the first $12,000 tax free even if its not guaranteed. However, I do have a problem with your argument. It's completely unsound and without a sound argument people are going to dismiss your argument and you. There are a couple points here that seem on target such as the welfare cost. Assuming that welfare would be gotten rid of when the basic income started.

The problem is the other items that would not be affected by basic income such as the biggest one, health care. When I was in grad school I lived on $1,000 a month and there was nothing left over for health care. So, basic income will not replace health care.

Another, item is the illegal drug cost. Not sure what this number represents but I got the impression that it was the amount of money spent on illegal drugs. This is an individual cost, not a society cost. Therefore, it will not go away with basic income. If anything it would go up.

My final example is suicide. This is again, an individual cost and will not impact government spending even it it goes away. Also, I don't think that $1,000 a month will have an significant effect on suicide. I did a quick search to find some way of quantifying the effect of income on suicide. Did not find a really solid article for this fact but the one below shows that being single has a 25% increase in risk of suicide and the increase in risk for being in the lowest income quartile was only 8.8%.

http://ajp.psychiatryonline.org/doi/pdf/10.1176/appi.ajp.160.4.765

There are many arguments for basic income. Not everyone will agree with all of them.

Did you know that when Dauphin tested a basic income guarantee for 5 years, hospitalization rates decreased by 8.5%? Reduced stress led to better health which led to lower hospital costs. I'm not saying that UBI will negate the cost of health care. I'm saying that UBI will create a healthier population with less need for health care, and thus those costs will go down. One article I've written along these lines is that UBI is like a vaccine.

In regards to the drugs aspect. Drug use is in large part a matter of self-medicating. This too I've written about, and I suggest reading both this and this to gain a better understanding of how UBI will reduce drug usage. If you don't want to read both of those, at least watch this video.

In regards to suicide, yes economic insecurity is responsible for a percentage of suicides. Here's an interesting article to read about the economics of suicide.

Notice that this post is not about the cost to government. It's about the costs to society. There are many costs that aren't seen as costs, which is really a major point of my even compiling all this data in the first place.

One example is shoplifting. You pay this cost through higher prices. Stores include the cost of loss by theft. It's kind of a hidden tax. Another example is your health insurance premium. It's say $400/mo instead of $300/mo because of the people who go into ERs because they had no coverage. That's effectively a $100 cost to you that you don't see as a cost. Does this make sense?

Here's a great example in this article to further clarify that point:

In the paper, the authors studied the health care costs of 26,000 low income individuals before and after enrollment in a community health program in Richmond. After three years, total costs per capita dropped from $8,899 to $4,569 with concurrent drops in the number of ER visits (25%) and increased primary care visits (50%).

I’ve witnessed this problem first hand. Uninsured patients come to the ER with problems that were minor a week ago, but now are critical and will costs thousands of dollars to correct. The most egregious example I can think of was a patient with an infected boil that he ignored because he didn’t have a doctor or insurance. It eventually eroded through his skin as the infection failed to resolve after trying to put hot and cold compresses on it did absolutely nothing. When I saw him I could smell the rotting flesh from outside the examination room in the ER. The patient had to be admitted to the ICU as he was septic at this point, and needed IV antibiotics as well as an emergent operation to debride the wound. Followed by an even more expensive reconstruction since it involved his face. I would estimate the costs of his ICU stay, medications, and 12 hours of surgery were probably in the $60-90k range, and that’s a conservative estimate.

What would this problem have cost if he had a primary care provider? Probably 100-150 bucks. A PCP could have lanced this boil in office 2 weeks before, and maybe given him a short course of bactrim (an unnecessary use of antibiotics but a common enough one). The cost of the physicians time, a few alcohol swabs, some lidocaine and a knife would have been infinitesimal compared to the bill he racked up from not having insurance. Not to mention the pain, suffering, and shame he felt from how bad this problem got. And did he ultimately pay his bill? Nope. In the end we pay for it, with higher premiums, higher taxes, and higher medical bills for all. This is the hidden tax the uninsured place on us all. All Obama has done is acknowledged we pay this tax, and brought it out in the open, as well as requiring the irresponsible who don’t have health insurance and can afford it to buy it.

This kind of stuff happens all over the place. Because we refuse to give someone $12,000 in basic income, we end up spending $90,000 on them in a hospital, or $60,000 on them in a prison. As the saying goes, a stitch in time saves nine. Well, UBI is that stitch that can save us a shitload of stitches that we consider par for the course.