{"insight":{"id":"49378923","lede":"Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans.","slug":"a-deficit-funded-usd6k-year-ubi-is-modeled-to-decrease-gdp-by-6-1-by-2027-and-9-3","title":"A deficit-funded, $6k/year UBI is modeled to decrease GDP by 6.1% by 2027, and 9.3% by 2032","showTitleAsQuote":false,"epistemicStatus":"","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752","lede":"

GDP refers to the total value of a nation's production of goods and services.

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The formula for GDP is: consumer spending (C) + business investment (I) + government spending (G) + net exports (X-M). Nominal GDP refers to the unadjusted total, whereas "Real GDP" adjusts that total to account for inflation.

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Simon Kuznets invented the notion in 1937. It has since become the guiding metric to measure not only the volume and value of national production, but the welfare of the nation. Of all the criticisms of such "fetishization of GDP" (Joseph Stiglitz), the simplest may be that given by Kuznets himself, who wrote: "The welfare of a nation can scarcely be inferred from a measurement of national income."

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Thirty years later, Kuznets adds: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”

\n","ledeExcerpt":"GDP refers to the total value of a nation's production of goods and services.\n\nThe formula for GDP is: consumer spending (C) + business investment (I) + government spending (G) + net exports (X-M). Nominal GDP refers to the unadjusted total, whereas \"Real GDP\" adjusts that total to account for inflation.\n\nSimon Kuznets invented the notion in 1937. It has since become the guiding metric to measure not only the volume and value of national production, but the welfare of the nation. Of all the criticisms of such \"fetishization of GDP\" (Joseph Stiglitz), the simplest may be that given by Kuznets himself, who wrote: \"The welfare of a nation can scarcely be inferred from a measurement of national income.\"\n\nThirty years later, Kuznets adds: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

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Amidst debates over the merits of continued growth, we begin with the idea that all else equal, a society with growth, with more wealth, is preferable to one with less. Without growth, society becomes a zero-sum distributional game: anyone's gain is another's loss. Growth (all else equal) enables shared prosperity.

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But there is broad agreement that current measures of growth, such as GDP, are inadequate to the task of providing a suitable proxy to guide further growth. Whether devising improved measures that account for missing elements such as sustainability, equity, leisure time, or digital value, or constructing altogether new proxies (OECD's Better Life Index, for example), the conversation about how best to measure, and thus drive, equitable, regenerative, socially desirable growth is a rich field of debate.

\n","ledeExcerpt":"We define growth as the expansion of wealth in society; growth is about generating a \"a bigger pie\".\n\nAmidst debates over the merits of continued growth, we begin with the idea that *all else equal*, a society with growth, with more wealth, is preferable to one with less. Without growth, society becomes a zero-sum distributional game: anyone's gain is another's loss. Growth (all else equal) enables shared prosperity.\n\nBut there is broad agreement that current measures of growth, such as GDP, are inadequate to the task of providing a suitable proxy to guide further growth. Whether devising revised measures, such as Tyler Cowen's notion of wealth plus\" (GDP, plus measures of leisure time, household production, and environmental considerations), or constructing altogether new proxies (OECD's 'Better Life Index), the conversation about how best to measure, and thus drive, equitable, regenerative, socially desirable growth is a rich field of debate.","featured":true},{"slug":"deficit-funding","name":"Deficit funding","id":"49378922","lede":"

Deficit spending is when a government's spending exceeds its revenue, thus adding to the budget deficit.

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Since 1970, the US government has used deficit spending for all but four years, with larger budgets of spending that revenue. To close the gap, governments typically borrow by issuing Treasury bonds, adding to the national debt.

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The virtues and vices of deficit spending are highly contested, increasingly so in recent years. John Maynard Keynes famously quipped: "Anything we can actually do, we can afford", suggesting that so long as the economy's productive capacity remains underutilized, deficit spending can stimulate economic activity, to the benefit of all.

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Countervailing opinions, especially those of the neoliberal paradigm, argue that any deficit spending negatively impacts the economy, and should be strictly avoided.

\n","ledeExcerpt":"Deficit spending is when a government's spending exceeds its revenue, thus adding to the budget deficit.\n\nSince 1970, the US government has used deficit spending for all but four years, with larger budgets of spending that revenue. To close the gap, governments typically borrow by issuing Treasury bonds, adding to the national debt.\n\nThe virtues and vices of deficit spending are highly contested, increasingly so in recent years. John Maynard Keynes famously quipped: \"Anything we can actually do, we can afford\", suggesting that so long as the economy's productive capacity remains underutilized, deficit spending can stimulate economic activity, to the benefit of all.\n\nCountervailing opinions, especially those of the neoliberal paradigm, argue that any deficit spending negatively impacts the economy, and should be strictly avoided.","featured":null},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447","lede":"

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null}],"sources":[{"id":"49378903","lede":"","link":"https://budgetmodel.wharton.upenn.edu/issues/2018/3/29/options-for-universal-basic-income-dynamic-modeling","slug":"options-for-universal-basic-income-dynamic-modeling","kind":"","title":"Options for Universal Basic Income: Dynamic Modeling","year":"2018-01-01","researchers":[]}]}}