A basic income could boost the US economy by $2.5 trillion
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- Effect on crime
- Effect on drug addiction
- Effect on family outcomes
- Effect on education opportunities
I'd gladly pay more taxes if I could draw a direct link between UBI and a safer, happier society.
GDP isn't everything. I can't say it better than Kennedy: https://www.youtube.com/watch?v=77IdKFqXbUY
Currently it sounds like a blood from a stone situation: no one has any money, so requiring the park to install a sanitation system would simply cause it to file bankruptcy, likely with no change of any kind.
What you're describing is a special case of the exact sort of inflation that critics are afraid of (more money for tenants across the board just means more money that rentiers can extract).
If the argument is "we could use tax money (via a stipend to citizens, and then extracted as rent) to implement a law that required a trailer park to provide a functioning sewage system", then the easiest and most efficient way to do that would be use tax money to provide a functioning sewage system.
That said, you make a good point that landlords (in many cases) extract as much "value" from their tenants as they possibly can. If they knew each tenant was getting a fixed amount of additional income we could expect them to increase rents by approximately that amount and that would be bad.
My example was optimistic in that it presumed this would not be the case. I do think my basic idea is sound: if people had a basic income of a certain amount, then we could expect systems supporting those people to improve (to some degree) by a portion of that amount.
That's assuming the only objective was to fix trailor park sewage, when realistically there are thousands or maybe tens of thousands of similar problems that different populations. The federal government simply doesn't have the resources and logistical capabilities, to identify and address each need in turn. If they tried lots of needs would end up overlooked. So instead you provide the UBI and let the money get directed to the most pressing need.
We already made the assumption that they do, with the original claim " If every member of the park was getting some form of basic income, the state could require the trailer park to install a septic system".
Without that requirement, you're taking on the risk that the rentiers will extract the additional income and make no changes to the sewage system. That assumes a few things:
(1) The trailer park owners don't currently have the money to building a sewage system
(2) The lack of money is the only reason that the owners aren't building a sewage system
(3) The owners don't have other goals that they prioritize higher than providing a sewage system to tenants
(4) The amount that the rentiers would be able to extract from the stipend would be enough to cover a sewage system
I'm generally pretty sympathetic to the premise that allowing rational actors to choose how to spend their limited resources tends to produce results that ~everyone agrees are better than top-down planned efforts. But when you're talking about a situation in which the negotiating leverage of the two parties is so drastically imbalanced, and a problem which has such wide-reaching externalities as this one does, that's a really big leap of faith to take. Compare that to the alternative, where we've identified a concrete problem that we're looking to solve, and we use a normal process for budgeting and directing funds towards a targeted goal.
This sounds like something in between where there's a law requiring an increase in quality. I expect that wouldn't be necessary. People with (a little) more money have more options and can vote with their feet by moving to a better trailer park.
If, today, the trailer park owner is not required to provide adequate sanitation (which strikes me as heinous btw), why would UBI change that? Either the state couldn't care less or their are laws that are being flouted. Either way, it's not clear why a change in distribution methodology would change either.
The bit of your argument that I completely agree would occur is that the trailer park owner will charge the renters more. That's pretty much a given. Whether or not the renters will receive anything for that rent change is likely to be an orthogonal question.
My concern with UBI isn't that it won't work. It's that it's a right winger's wet dream.
I mean, imagine. With a great fanfare of fairness, we give everyone $x00/month. Dismantle all the means tested benefits for pensioners, disabled etc. Then watch as successive governments either ratchet it up or ratchet it down depending on their persuasion and the state of the economy. And as a target for when things get tight, it's a bloody big one.
The only really meaningful change from the status quo would be that the the truly disadvantaged would get royally stiffed.
What I think might be a positive aspect of basic income is that we can expect everyone to have more money, so we can expect them to spend some of that money to improve their situation. The sanitation issue in this trailer park is one example I thought of as the story was posted recently. In my opinion, when people are at a subsistence level they can't invest in improving their situation in a meaningful way. If employment isn't growing in their location there's no way to increase their income without basic income. Tax breaks will not help them as their income is already so minimal.
You are, of course, correct. Why? Because the investment usually needs some form of capital outlay and folk don't have the capital nor have reasonable access to capital. And UBI, assuming it's at a non-trivial level, will not solve the former problem but most definitely will the latter.
Again, imagine what happens when you give a lot of poor folk access to a regular, guaranteed, future income stream. Overnight, you've pretty much taken all the default risk out of the payday loan business. Let's assume the first call is from a septic tank company. You can have that $15k tank installed next week! What's the monthly payment on that going to be? And what if it's not the sanitation company who calls. What if it's a white goods company or an AC company or an auto financer?
And note, I'm not arguing that poor people make poor financial decisions. Some do, some don't. Like rich folk. But these are all things that would genuinely make their lives better. And, they are very likely to get offered them. At a "reasonable" interest rate.
So there's no solution? I don't know. I do know that it can be substantially better than it is today without diving into the unknown. It's not as if no welfare state models have been attempted to varying degrees of success (for varying definitions of success).
But that's really the point. If you want to "fix" poverty, the problem isn't the distribution model, it's actually having people want to fix poverty.
Everyone gets an extra $1000/month. Great. That's extra money flowing into an economy which absolutely affects supply/demand for the things everyone needs (food, shelter). Food might be fine because there's a lot of competition, but landlords? Rental prices are almost completely set by market demand, not cost of service.
Its possible UBI could help sidestep this by allowing more people to purchase homes, but housing supply is constrained in many urban areas today; adding more capital to that market will increase prices. Granted, this isn't as bad a thing as money entering the renter markets, because that money just goes to build more developments and eat up more land that could be owned by people to build equity instead of corporations. But its still something to keep in mind.
No, it's not, in most proposals, since it's funded by a combination of new taxes and displacing other spending programs.
If you fund it by printing money, sure, it's new money, but that's not what is usually proposed with UBI.
Take a look at social security to see how this plays out. Why do you think so many retirees move to Florida?
There have been some studies, and from my recollection the takeaway is that most people, once their basic needs are met, strive to actually do something "useful". People on average do not become drug-addled sloths.
For many reasons it is difficult to do a comprehensive, long term study on this idea. The first, of course, is the cost. People or organizations with the money to spend on research tend to be motivated by profit, and thus far we've been taught (incorrectly, I would argue) that giving things away doesn't result in having more for yourself.
Because it's a huge change to society and it might have unexpected consequences. I feel this way, even being on the pro BI side.
250m[1] * $1000 * 8 * 12 = $24,000,000,000,000
1. http://datacenter.kidscount.org/data/tables/99-total-populat...
250m * 1000 * 12 = $3 trillion.
If you use that to replace means-tested aid, you get rid of the management overhead.
And, maybe, if the US cuts costs for the military, making them build roads and schools instead of bombing them, you'll realize you really didn't need to spend that much in the military anyway...
There is also an important point in terms of opportunities lost due to low surplus. As you reduce the pressure on the poor, they will end up making better decisions (http://thepsychreport.com/research-application/featured-rese...) with better overall outcomes.
Right; that is, whichever economy those rich folks choose to call home. :)
I.E. California has one of the biggest economies in the world...
http://minnesota.publicradio.org/features/2011/02/documents/...
The story is going to be rather different in that situation, I would bet.
Plus it’s not like US citizens have much choice, they have to pay the IRS no matter where you live in the world forever. Nowhere to run, nowhere to hide haha.
Depends on the total amount of taxes paid. Some people dodge a couple billion every year by doing some clever tricks with their residence, citizenship and tax domicile.
Kansas has low taxes, but no one's dying to move there.
When it's all said and done, having a $1000/m basic income would be little different than increasing the minimum wage by the same amount.
It's sort of like when you say "NAFTA grows the US economy but $1 trillion" and the guy who's job was outsourced to Mexico ask "Okay, but how does that help me make rent or buy groceries for my family?"?
Basic Income (and other welfare schemes) are like that too, except for the rich. They're absolutely worse off if the economy grows 10% but their personal wealth and income declines by 20%.
Personally I'm a fan of UBI, but I sell it as (1) welfare is the right thing to do, and (2) UBI is the most efficient way to do it.
I'd probably start with something less than $1,000/month though. I'd offer a package deal to employers and the rich that looks like this: the government will pay healthcare costs and provide $500/month to each adult and $250/month for each child, and in return we abolish the minimum wage.
If someone wants to work for $1 / hour and someone else wants to hire them for $1 / hour... what right does a third party have to prevent them from doing business with each other?
If people had the right not to work, you'd have a more liquid labor market. If people's basic necessities were met before needing to work, you'd have a more liquid labor market.
Until that day, minimum wage are basic hacks to try to present some of those labor externalities as a basic deserved negotiating position.
People need money to live. Some of them need money more desperately than others. Some are willing to work long hours under shitty conditions for almost anything.
So, if you have 1 job, and 2 people need to work to survive, then the salary for that job will approach zero because those people have no other choice.
We, as a society, realize that is a bad outcome for everyone, and so we say "Look, I know you /could/ hire someone to clean your toilet for $1 an hour, but that isn't the true cost of toilet cleaning because we don't live in a truly free market and there are larger factors that might force people to accept that wage against their will. Therefore, we're going to say that $X is the lowest you are allowed to pay to overcome the inherent coercion in jobs."
One of the beauties of UBI is that, at least theoretically, low wage jobs will have salaries that actually come closer to the true market clearing price of the job itself. To be clear, it is likely that the true cost of toilet cleaning is closer to $3 or $4 an hour, but people with no options would take the job for $1...and there are a ton of those people out there. Under UBI there might not be people that desperate any longer and so they would only take the toilet cleaning job if it paid more...closer to the true market value of having clean toilets.
The UBI angle works both for and against worker negotiating leverage. On the one hand, workers know that their entire income isn't on the line if they quit, so they have more leverage. On the other hand, they know that they're getting X from the government, and while they need Y to live, they'll accept work at Y-X.
Someone's wage has an absolute ceiling at the level of "this is how much value I produce per hour". No one will hire you for more than that. And currently, there are some people who cannot be hired at minimum wage.
A UBI (and national health insurance) would help a lot with wages though. With less fear of losing their job, employees would have more bargaining power. They'd also have more resources to spend on commuting or time off work for interviews. By expanding the number of potential employers a person has access to, you indirectly allow them to bargain for higher wages, even without explicitly setting a minimum wage.
Especially in leafless winter, the sheer uglyness of this swath of in-disrepair America is almost shocking.
Abandoned factories and houses. Lifeless downtowns. Trash along the tracks. Non-sweet graffiti.
Paying people to do nothing when there is so much to be done seems crazy to me. It's not like we have figured out how to solve these problems with AI or robots yet.
I could listen to an argument for paying people to participate in FDR-style public works programs. Building a bicycle lane network. Planting flowerbeds. Demolition and recycling and then re-urbanization or re-forestation of those crumbling factory grounds. And so many more things that would make this a better place to exist.
It would also move money back into these economies in a way that support some of the kinds of industrial district revitalization that you see in more urban areas nowadays.
All in all, the capitalist in me wants to say that you'll get better results if you just give people money and let them figure out how to dispose of it, rather than letting some government bureaucrat off in the state capital or wherever try to figure out how best to use the money. The latter option is worryingly similar to the root causes of the worst of the prosperity-destroying waste that went on in places like the Soviet Union. And I do think you'll see people (mostly) put the money they'd get from a basic income to good use. It's not like anyone enjoys living in a blighted town; it's just that they're living under economic conditions that leave them with little other choice, aside from maybe doing like I did and contributing to the blight by moving out of town.
It's very hard to acquire those skill sets if you need to choose between having enough money to pay the bills, and spending time and money on acquiring those skills. Or alternatively, it's a lot easier to attract people with those skills into your community if you have the money to pay them for their skills.
My point remains, I think you'd see people in blighted areas sink a lot more of their resources into community improvement if the opportunity cost of doing so weren't as cripplingly high as it is now.
Most companies don't have incentives to care about the communities their employees are from, or the skills to help. It's not deemed productive or efficient in current corporate interests to use corporate wealth to ensure their employees have healthy home lives in healthy communities. (Shareholders, C-Suite, board members most companies certainly care enough about their home lives/communities right now, but outside of the investor class there's very little financial empathy and little incentive to have empathy because that stuff doesn't necessarily show up on a quarterly report.)
Crime is a huge problem in poor communities, dealing with it is hideously expensive to taxpayers, and one of the major motivators behind it is economic stress. Wouldn't it be sweet if people who are currently motivated to commit crimes were instead motivated to do nothing?
Basic income will only FEED these two problems.
Crime also tends to correlate negatively with wealth redistribution, not positively. Correlation != causation, natch, but it's also the case that if your causative claim were true, then one would expect the correlation to be positive rather than negative.
If victimless crimes like gambling, high interest lending, drug use and adult prostitution were all legal, there be less of a reason for organized crime to exist.
My feeling is that this sort of things should be regulated at a neighborhood level, so that it is possible to not have them in some neighborhoods where they are unpopular, while still being accessible in other not-too-distant areas where people do want them.
In any case, such trade is not a crime that would go away with basic income. People will have MORE to spend on vices, actually.
I think there are plenty of people on disability who also use opioids. That would be a lot harder without that money.
Sure, some crime is due to just people being too lazy to get a job, but it's not a universal cause.
When I said "Crime is caused more by envy", I was not making an absolute statement about all kinds of crime.
"Paying people to do nothing"
As easily as one might complain of rewarding mediocrity and paying into an unredeeming, bottomless void that bears no fruit, another might complain that a civilization founded on the threat of starvation and death by exposure isn't very civilized at all.
Take these two extremes on their own, and it's pretty easy to understand that a wide, ignored middle-ground exists, that rhetoric neglects. On one hand, a person is met by an offer to participate in society, in exchange for the obvious benefits society has to offer. On the other hand, stepping off the treadmill for too long risks permanent demotion, and a life sentence of perhaps animalistic subsistence, pan-handling, living off stolen cat food in a shanty town under a bridge, or worse, maybe suicide and unspoken realities in between.
"Paying people to do **nothing** when there
is **so much** to be done seems crazy to me."
Some of the things I have thought about when considering BI have been, is it really "nothing" we are paying for? Lets say you're living in a neighborhood without any jobs available, and without jobs and property taxes your educational infrastructure is lacking, and without a job in the first place your mobility is lacking. However you do find employment in selling illegal drugs, the market is wide spread, the risk is low for the street level dealers. Now into that market your provide a basic income for the youth who can now pursue their interests without participating in some form of underground economy. Can you see paying people to not participate in that economy?
When I think about BI I have come to think about removing worry rather than paying for 'nothing'. IF you look at income disparity versus economic efficiency, economies grow when there is incentive to get ahead but they begin to contract once that disparity exceeds a threshold. If the bottom of the economy is worried about where they are going to sleep and eat tonight, they aren't very efficient or contributory to the overall GDP, if the top end of the economy is keeping all of its wealth bottled up in trading games with other top end users, it isn't contributing to the overall GDP either.
If you force disparity to zero, you essentially get communism, if you leave disparity unconstrained forever you appear to get monarchistic type trapped wealth. If you change the rules of the game so that people can be wealthy or not, but the total difference between maximum wealth and minimum wealth is constrained to 2 orders of magnitude rather than 4. Perhaps you get a better system overall.
I'm with the parent comment. There is so much work to be done in this world - we should first try to tackle those before taking the BI shortcut.
Every time, it's the exact same argument, "if you give the poors more, everything will cost more, and they'll be right back where they started." And, well, we didn't always look like this. Obviously it's possible for there to be a different equilibrium in society, one with less disparity. So something has changed.
Seems like there should be ways to change it back, even to the disparity we had (overall, I know life was horrible for PoC) in post-WWII America. That'd be a step up from this.
Your comment hints that the government (federal or state) will be the employer and the work will involve public works of some kind. So far, neither have been interested in actually doing these kinds of projects despite the need. Maintaining such project is also a concern: in an area where the income of the population is tied directly to public works projects, what happens when these projects come to an end and the population returns to unemployment?
The current regime explicitly excludes those who do not have income. Whenever we talk about helping people in poverty in the US, we inevitably circle back to tax breaks. If these people have little or no income to begin with, in what way will tax breaks help? If so many decisions are going to be made based on "the market deciding", how will they participate without enough income? If we look at broadband access in these areas, we'll see vendors complaining that there's no point in rolling out service if no one can afford it.
Basic income will allow these people to participate in the market and, hopefully, in their local economy. They will decided what projects deserve funding based on the way they spend their money.
A dozen people erect tents and lean-to shelters out of ad-hoc materials on a city street to stay out of the weather while they sleep. They use the gutter (or not) as an open air latrine. If a BI system is providing them with some money which they can apply toward a system of shelters or temporary living space, I "receive" an environment where I'm more productive because I'm not worrying about the people living on my doorstep. That is worth a lot to me, and I can unilaterally start giving money to anyone sleeps in front of my house so that they can get a room at a hotel or shelter bed but it doesn't change the systemic reasons that person is sleeping on the street. Now if I give them a BI stipend and combined with wages they get from working they can find a shelter, then not only are they better off but I am better off as well and the economy as a whole is more productive.
That is achieved by capturing some of the excess wealth being generated by the economy and directing it toward the quality of life improvement for everyone (the homeless are housed and I don't have to dodge their encampments on the street and city services are more able to cope with people living in expected places and provide garbage and sewage services.
"And some projects aimed at reducing poaching by alleviating poverty have backfired, said Duffy. For example, one program in Ghana was intended to decrease poaching by paying a premium on crops, on the theory that hunter-poachers would focus instead on farming. They did for a period, but then used the money they’d earned to buy more sophisticated weapons that they used to shoot more lucrative species [1]."
Beyond that, everyone seems to ignore the inflationary nature of BI. What will happen to the economy in real, not nominal, terms?
[1] http://america.aljazeera.com/articles/2015/5/22/zambia-poach...
We have so much idle capital that is currently only being used to take over the competition rather than for innovation and investment. Am I alone in seeing the general public and local communities have more of a stake in what infrastructure and things we need, and should be more economically involved?
I'm a fan of UBI in that I believe we have the ability to provide everyone with the basic necessities of life, and providing it without demeaning means-testing and the attendant labelling and stigma seems the right way to do it.
But I'm not a fan of only giving money. That money ultimately comes from the corporate economy, which owes a large debt to the common purse. For example, we pedestal google, amazon, etc, but they wouldn't exist without the DARPA (government) funding which created the internet, and even more basic research before that, law and order to protect it, education to allow people to even read it, a road network to allow it to spread, I could go on. And then there are what should be commonly-owned monopolies like land, radio spectrum, etc, etc. So I think corporations, rather than just paying this "common debt" in taxes (which they don't appear too keen to do), should be part-owned collectively.
So, we should have some kind of Universal Basic Income, but it should come in the form of dividends derived from Universal Basic Ownership, eg a system something like all companies should be 30% owned by a Universal wellfare fund which everyone gets a share of.
Printing trillions and trillions of dollars of money would increase the debt and increase GDP. Let's do that too!
[1] I'm actually European, but the ECB and the Federal Reserve are behaving in similar fashion, in this case.
Quite the opposite.
The people who benefit the most from quantitative easing and inflation are people who are in debt. The rich tend to be net debtholders, not net debtors, so they're the ones primarily harmed by quantitative easing and an increase in the money supply.
EDIT: Fixed typo
Inflation obviously helps those in debt but QE didn't inflate anything except risky asset classes objectively held by the wealthy. Even by the feds own studies & public communications by the chair woman inflation continues to remain "subdued" almost 10 years after.
Wages have stagnated & only recently picked up, GDP has been the lowest post-recovery ever, net household debt is again at new highs, interest rates at forever in the history of human civilization lows. Meanwhile every single risk seeking asset class primarily owned by the wealthy has appreciated to levels last seen at prior bubble peaks.
QE helps the rich & if it helps anybody else it's an accident. Sadly by the time non-rich households are able to participate in risk seeking asset classes they are so expensive that when objectively measured against historical readings future returns are flat to negative. Uncle Warren said "the fool does in the end what the wise man did in the beginning" & QE will guarantee the non-rich fall into the same foolish traps.
Between the two of us, one has a degree in economics from one of the top universities in the US and is posting under an established, identifiable handle. The other is posting from a brand-new throwaway account.
I'm willing to accept that I might be wrong about things sometimes, but when a random, anonymous person on the Internet says they're "stunned" by me paraphrasing an established economic principle, I'm going to be pretty unconvinced unless they present some compelling evidence and solid analysis.
As for the rest of your comment, even if one takes your statements about the current state of the world at face value, it doesn't leave you anywhere. You can't generalize entire economy of the last ten years and assume that it reflects the effects of quantitative easing (and no other confounding factors).
I don't really want to litigate the post-2008 economy here, because that's pretty off-topic. In the context of the orginal statement - the claim that "basic income would be better than EQ because QE primarily benefits the rich" - yes, it's pretty clear that that goes against a rather straightforward and established body of both economic theory and empirical research.
How about Japan pre GFC since they started QE in March 2001[1] meanwhile CPI in japan since 2001 has remained near 0[2]. Is 17 years enough data points? Which QE regime that resulted in any meaningful inflation or wage growth would you like to discuss? I'm afraid any I'd bring up from G7 sovereigns would be marginalized due to your credentials.
Buying bonds does not help out anyone other than the rich. Artificially reducing interest rates makes borrowing easier which companies take advantage of[3] to buy back stock[4] which adds buying pressure to risk assets. Fewer shares to buy[5] helps the "E" in the P/E through financial engineering.
Who buys those corporate bonds for the juicy yield (besides the ECB & BOE)? Hedge funds & those who have disposable income that can be allocated to risky assets via pensions & mutual funds. Not part-time workers or FTE's that live pay check to paycheck which most do[6].
QE doesn't primarily benefit the rich, it ONLY benefits the rich.
[1] https://en.wikipedia.org/wiki/Quantitative_easing#Japan_befo... (see its citations) [2] http://www.inflation.eu/inflation-rates/japan/historic-infla... [3] https://fred.stlouisfed.org/series/TDSAMRIAONCUS [4] https://www.yardeni.com/pub/buybackdiv.pdf [5] https://www.yardeni.com/pub/sharesos.pdf [6] https://www.cnbc.com/2017/08/24/most-americans-live-paycheck...
> Wages have stagnated & only recently picked up[1]
> GDP has been the lowest post-recovery ever[2][6]
> Net household debt is again at new highs[3]
> Interest rates at forever in the history of human civilization lows.[4]
> Meanwhile every single risk seeking asset class primarily owned by the wealthy has appreciated to levels last seen at prior bubble peaks.[5]
[1] https://tradingeconomics.com/united-states/wage-growth (can you even spot QE?)
[2] http://fortune.com/2015/07/30/us-gdp-economy/
[3] https://www.reuters.com/article/us-usa-fed-debt/americans-de...
[4] https://www.cnbc.com/2016/11/17/200-years-of-us-interest-rat...
[5] https://stansberrystreaming.com/presentations/grant-williams... (this years stansberry vegas conference)
[6] https://www.economist.com/blogs/dailychart/2011/07/american-...
Do you have a source for this?
On the contrary, central banks buy financial assets with the money they print from QE. This directly benefits investors who hold those assets as the central bank buying increases the prices of those assets.
Don't confuse a slight ny-fed tighetning with central bank prudence. They have none. Aggressive interventionism is a policy that will never go away & will likely become even more aggressive in the future.
The "economists" you're talking about don't matter. They have no voting power over monetary policy. All fed govenors that control monetary policy at all the major central banks speak daily about how inflation is subdued, possibly a long-term phenomenon, & indicates plenty of slack in the labor force. If I drank every time Janet Yellen said "inflation remains well anchored for the foreseeable future" in just 2017 then I'd be passed out asphyxiated. Ben Bernanke himself just recently authored a piece indicating the next series of tools to use in future crisis since rate cuts won't have as much impact at historical low levels (surprise more aggressive! price fixing & negative rates in the US). He did a tour in Japan discussing the use of "Helicopter Money" in the next crisis. Basically anybody that has any ability to control monetary policy is running away from what you think & say at an accelerating pace. They have a deep bench of folks to maintain that groupthink too so don't expect one of your enlightened economists to be in a position of power any time soon.
Economists don't matter in determining real life, real world monetary policy. Fed governors & politicians do.. repeat that to yourself in front of a mirror because you are confused.
Remember QE didn't just happen. It was TARP, QE1, QE2, Operation TWIST, QE3 (open ended). Across the pond it was QE, Corporate bond buying, negative interest rates, yield pegs. It always progresses every single time. In fact, the burden of proof is on you to find an economic down turn with decreasing interventionism on behalf of the central banks.
Japan started QE in 2001. Now they have over 1 quadrillion (yes that's real not me being tongue in cheek) in debt primarily owned by the BOJ & the BOJ now owns a stunning >70% of the entire domestic ETF market & are still buying at record clips. They are outright buying stocks! The SNB is actively buying stocks.. in fact they own a shit ton of Apple. Why is the SNB printing money & buying Apple? Look it up they issue the equivalent of a 13d form.. it will blow your nips off at how much more extreme they get every single day. I can cite every single thing & will if you don't believe me but simple google searches from the central banks own research firms are where I get my data.
The next crisis will have any or all of the following MORE EXTREME central bank "tools" deployed: capital controls, selling bans, negative rates (possibly on depositors), outright buying of stocks via ETF's, outright buying of corporate debt by the NY-FED, price fixing of 10 year treasuries, helicopter money.
Timestamp this shit cause it's gold son.
How 'bout taking some of that fresh money to set up a new department of Federal officers who drive around and break windows? Think of all the business that would generate! That would really boost the economy.
One serious question though: since the Federal government is printing all the money they need, why should they collect income taxes? If we're going to ignore fundamental economic consequences, what's a little more fresh ink? Let's just party 'till the walls fall in, right? (A: it's all fun and games until the velocity of that money increases and hyperinflation comes calling.)
The institution of bankruptcy already answers, in general outline, the question of what to do with bankrupt folks: in short, cancel debts that aren't payable without excessive hardship. UBI should obviously be payable only to the beneficiary (except in the case of legal incapacity), who might contract to pay an equal amount to someone else, but such a contractual liability would be as subject to cancellation in bankruptcy as any other debt.
Borrowing money from my credit card does not increase my annual salary.
If you have people buying and selling nothing that's going to be a small economy.
If you have the same people, with the same wealth, buying and selling stuff to each other, that grows the economy.
If you have the same people buying and selling stuff faster, they may still retain the same wealth but the economy will grow even further.
The size of the economy is about the number of transactions, and printing money or borrowing money can definitely grow the economy (IF that money gets used to accelerate economic transactions).
At the expense of creating huge amounts of personal debt.
At the expense of future growth. All of the money borrowed must eventually be paid back, which reduces growth by reducing that same money supply (increasing taxes to pay for it reduces the money supply similarly). It only makes sense to borrow when the future rate of return is greater than the interest rate of the debt, i.e. it'll take more than 8 years to see any return on investment from UBI.
You can be dismissive about it all you want, but you're the one who has a fundamental disagreement with how civilized society has been run for the last hundred years (or longer if you look outside the United States).
Your satire fails to hit the mark of making someone look ridiculous, because they are describing a long-established status quo. Society isn't going to think someone describing the status quo is ridiculous or crazy for defending the status quo.
You're confused. Depending on a factor does not mean that this factor owns what you produced. Example: To make ice-cream, you depend on cows. Cows do not own your profits.
That's where the concept of taxes comes from. You use the services that the government provides in order to create value. As such, the government claims part of the value that you created.
Ideally, then, the government reinvests into other services that future generations will also be able to use to create value.
We can have a disagreement over how much the government should be able to claim from individuals, but I have seen very few people advocate for no taxation.
If you think taxes are stealing, you don't have a problem with hipsters. You have a problem with governance of civilized society over the last hundred years (much longer for most of the world, since the signing of the 16th amendment in 1913 in the US).
When you say "wealth transfer", from whom to whom? In this case you could argue the transfer is from the federal government to individual constituents, I don't think you can follow the dollars further then that. IMHO, it'd be refreshing to see a "wealth transfer" the benefited that bulk of the population, rather than an elite few (i.e. banking bailout during the housing crisis).
Does it make a better work for a lot of people? Does it give a lot of people freedom? Does it give a lot of people more access to their basic human rights?
Then bring on wealth transfer.
Watching out for the rich and their tax rates is possibly the very last item on my list of priorities for "how to structure the world".
Seems like that would fuck someone up way more than any Basic Income. In this case, BI basically exists _because_ of that.
Means we would save around 300 billion per year!
Of course families would require more, but this does not seem quite as crazy for a country that has a 18 trillion GDP.
Also, your math doesn't make sense. You say we currently spend $927B on social welfare programs and propose BI as a complete replacement for those programs. But that number includes Social Security, and you subtracted the people on social security from your list of people. Social security cost $917B by the way, almost all of our social welfare spending.
You also can't just subtract all the people currently employed. A large portion of people on welfare are employed.
https://www.cbpp.org/research/federal-budget/policy-basics-w...
You wind up with ~$949.2B, which is close to what we're paying currently.
It would also involve cuts to various groups. For instance, the average retiree gets ~$1,300/mo from Social Security.
There's actually a larger issue I forgot to mention: what you're talking about isn't actually BI. In your computation you assume we're only paying $1000/mo to those who are not on Social Security and are not employed. But the whole point of Basic Income is that it goes to everyone. What you're talking about is just a different form of welfare, and completely unrelated to what this system is proposing.
So maybe a better name for it would be Guaranteed Minimum Income, that way it takes employed people out of the pool.
And yes you could call it welfare. It would also replace the unemployment income system, another source of expenses.
https://www.vox.com/policy-and-politics/2017/5/30/15712160/b...
If the answer to my question isn't a very high percentage, then such a program would never even be discussed in Congress.
Older, with no work experience, and maybe having children, are they really going to be able to launch a career from scratch?
It may not be called basic income but it exists already in Switzerland. I know people that haven't worked since a decade and still receive their monthly payments.