> First, only the people making up to the amount of the basic income would be willing to quit their jobs- anyone making more than needed to survive would certainly continue wanting to maximize their earnings

You've made two assumptions here:

1. People are ENTIRELY rational (they're not)

2. No black market exists

If you could guarantee that those conditions could be met, I would be much more willing to engage in the rest of your comment further. But they can't be met, not even close.

In order to be useful the basic income has to be a substantial fraction of the median income, or else you can't really argue that it's basic. If receiving it means that you're still in poverty by a wide margin I don't think it's useful enough to talk seriously about.

But once it's a substantial fraction of the median income, working looks less and less attractive. What I mean is that say $2000 for 0 hours worked in a month is very nice, and $2020 for 1 hour worked is at least in percentages, infinitely less desirable. Perhaps once you get up to 30 hours per week worked and $4400 in income you're starting to see some benefits from working in some kind of a meaningful way.

The issue is that working has both a fixed amount of hassle and a marginal amount of hassle. Once you don't need to work to eat, now you're just doing gut-feeling comparisons of hassle/reward ratios. On days that I have to work I have to get out of bed, get dressed, commute, etc. That's a fair amount of hassle. There's also the marginal hassle of being at work and not getting to do exactly what I want.

It wouldn't be worth it to do all the fixed overhead hassle to only work a hour a day because that would make such a small different in the total monthly income. So that leaves people wanting/needing to work more, probably at least a 4-6 hour day to amortize the fixed overhead of hassle into a reasonable number of hours to make the total amount of hassle substantially less than the money received so that working makes sense.

So now that lots of people aren't willing to do low skill, low pay jobs the pay obviously would have to go up. But that means that prices are also going to go up. And that means that the basic income isn't basic anymore; it means that it's sub-basic since it can't provide for your basic needs. That then requires a bigger basic income, which leads to higher prices, which leads to higher basic income, until you've got at least the potential to have a zimbabwe-style hyperinflation.

"Crucial to both components is discipline over the creation of additional money. However, the Mugabe government was printing money to finance involvement in the Democratic Republic of the Congo and, in 2000, in the Second Congo War, including higher salaries for army and government officials." http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

Once those people (government officials and army) got more money and started to spend it, everyone started to realize that the money was not worth as much as they thought it was. That led to prices going up, which led to more money printing to keep salaries ahead of the curve and this spiraled out of control very quickly.

Granted there's no guarantee that a similar kind of runaway would happen under the basic income. But it's definitely a very real risk.

EDIT: I forgot to touch on the black market. If a person wants to accumulate income it might be better to do so on the black market. That allows a person to avoid high taxes (basic income has to come from somewhere, that somewhere is always proposed to be higher taxes). That makes the black market (or working "under the table") attractive. The shadow economy of Europe is already by one estimate 17% of the total economy. Basic income would further encourage such things: http://www.huffingtonpost.ca/salman-sakir/black-market-econo...