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Comment by imchillyb | Hacker News Reader

> Can UBI scheme help to overcome Unemployment crisis ? @varbhat

You realize that UBI requires monies, right?

The US Federal government, and most states, are bankrupt. There is no money for this years bills. There was no money for last years bills, and we keep borrowing at exorbitant interest rates.

Our deficit (shortfall for this year) is -more than- 2.7 trillion dollars.

Our debt (shortfall for previous years) is -more than- 4 trillion dollars.

We can't pay unemployment claims because there's no money...

Where the hell is anyone getting monies for UBI?!?!?!

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Neither the US Federal government, nor any state government are bankrupt. Under current law, it is impossible for any of those entitys to declare bankruptcy. There was a proposal by McConnell to allow states to declare bancruptcy; but it was widely ridiculed as a stupid idea (and I doubt seriously considered by him).

"No money" is not a meaningful concept for the federal government. It has two options for what to do with the money supply: increase it, or decrease it. Leaving the money supply unchanged is just a degenerate form of these and generally bad economic policy (deflationary).

Currently, there is a massive drop-off in the velicity of money, which, if not countered, would have a deflationary effect. Increasing the money supply has an inflationary effect to counter this. In fact, the federal reserve has been increasing the money supply to maintain target inflation. Currently they do so by giving money to banks (and recently, by buying bonds directly). Why shouldn't they run their monetary policy by giving money to individuals instead.

We could try taxing the rich a bit more. They're doing just fine.

> Where the hell is anyone getting monies for UBI?!?!?!

In times of crisis like this you just print it and claw it back through higher tax rates .

If MAGA means 1950's values and culture, does that mean 40%+ tax rate for the wealthy?

If only

Money is created by the government, and creating more of it to distributed equally across individuals just redistributes the relative purchasing power from people with more than average to people with less than average.

Not just the government, not really the government at all unless you consider the Federal Reserve Banks lending money to regional banks "government".

The majority of the M0 money supply, that bit of currency we use to get things done in our economy, is created by fiat at any of the ~4500 commercial banks (in the USA). Every time they give out a loan they create the money out of thin air as debt on their balance sheets. They are only required to have a tiny fraction of the money they 'loan'/create (fractional reserve).

If instead of letting only these banks create money, if the new M0 money supply was distributed to ~300 million human people instead of ~4500 corporate people, there'd be plenty for basic income. It'd be universal basic income then instead of commercial bank basic income. And banks could just be banks and get by on their actual services instead of being money machines.

... and that's not even acknowledging what the NY Fed have begun doing since October of last year, 10s to 100s of billions a week swapped for worthless items from corporations who can't pay their bills in Reverse Repo operations: a shallow attempt to pretend it isn't just giving money away (https://apps.newyorkfed.org/en/markets/autorates/temp).

Thanks for all the detail, agreed on all your points.

From the gov's point of view, citizens and companies are shareholders in the "US corporation". Right now, the poor citizens own a 10% stake in the corporation. UBI is about giving them maybe 20%, at the expense of diluting the share of bigger shareholders. The board members don't want to dilute their own share, but if the corporation goes out of business, their own stake won't be worth anything. The absolute numbers are irrelevant: what matters is the stake percentage, not whether it's measured in billions or trillions of shares.

Real interest rates on treasuries are negative. That is, adjusted for inflation, people are giving away money to the government when they loan it money. That's the opposite of exorbitant.

https://www.treasury.gov/resource-center/data-chart-center/i...

> You realize that UBI requires monies, right?

Like the $1.5trillion tax cut that had "no major impact on businesses' capital investment"?

https://www.nbcnews.com/business/economy/1-5-trillion-tax-cu...

God damn I hate the media. Nowhere, and I mean nowhere in that article does it clearly state that's $1.5T over 10 years.

So in fact, it's a $150B tax cut annually. For a $3.7T budget that's costing about 4%.

Yeah, we had $5 trillion to drop on bad market bets. We had something like $10trillion over 10 years to give as tax breaks to the ultra wealthy.

We can deal with a few trillion to establish basic income replacements for general benefits, universal healthcare, affordable college/education, and other programs to better our citizens vs the rich and stock market.

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