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The Campaign To Get Every American Free Money, Every Year
merbs writes: Supporters of a basic income have finally organized a proper political movement. Basic Income Action is, according to co-founder Dan O'Sullivan, "the first national organization educating and organizing the public to support a basic income. "He tells me that "Our goal is to educate and organize people to take action to win a basic income here in the U.S." This 2013 Economist article does a good job of summarizing the pro and con viewpoints on the (ahem) basic idea.
There is no good reason to choose basic income (income guarantee) over a job guarantee where the government is the employer of last resort. This is still a form of Keneysian intervention, but a very direct one. Decreasing unemployment raises aggregate demand and brings on recovery from the recession. Inflation doesn't occur until you approach full employment. But at the same time as the recession is over, and since such work offered by the public sector is at or just below minimum wage, most would move back to private sector jobs. "Free money" is not given to those who are able to work and are simply failing to find employment, and is reserved for the severely disabled and so on — unlike the current situation.
"Politicians and diapers must be changed often, and for the same reason."
That just highlights even more problems, for example the $869 billion is divided between 59 million Americans, so most of those - the neediest - are going to be taking a substantial hit. Retired workers average at about $1300 a month, dropped under your vision to $800 a month. Disabled workers would lose about a third of their income. Over half of the $949 billion goes on medical care, and I'm willing to wager that's likewise divided up between a relatively small number of people.
As appealing as UI sounds on the face of it, it's a really ignorant idea at this point in our economic development.
My leanings are very much in the libertarian direction. I support property rights, free markets, etc, etc, etc.
With that in mind, if we, as a society, are going to have wealth redistribution, this method is the least offensive to me.
Inflation is an extraordinarily evil and offensive thing, but if we are going to create money out of thin air, the place where it can do the least harm is in the bank accounts of the people.
Government should stop debasing our money and stop encouraging idleness, but if they are going to do it anyway, this seems to be the least offensive option.
The catch is that it needs to coupled with responsibility. It needs to replace our other systems, to a large extent. It cannot simply be added to them, or the people will waste their free money, and come back looking for more.
See that "Preview" button?
Or maybe some people have kids and then things turn south? If I lost my job and I spent my savings while looking for a new one, I wouldn't be able to just give away my kids because I couldn't afford them anymore.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
They wouldn't be able to pay for this purely out of tax revenues already collected. It would require printing money and sending checks against money that hadn't been in the economy yet. That influx of money would cause some level of price inflation. It would also, however, create more demand for goods and generate more sales of goods. That would create some jobs and encourage further automation. Eventually when there's nothing left to automate, the businesses selling everything will be the primary sources of taxes. Workers will be lightly taxed and most of all of them will have subsidized incomes. Those not working are subsidized to the baseline.
The whole idea is basically turning corporate subsidies on their heads. Companies used to get subsidies for creating jobs and keeping their product prices down. Now much of those go back to the stockholders or other owners since automation is cutting production costs and cutting some jobs. As the jobs go away, though, the demand for the products goes away. It's largely a consumer economy, so it needs consumers to spend money. Stop subsidizing the corporations who are automating away the means to consume. Start subsidizing the consumers who then buy the products.
It's not necessarily the best plan, but that's the part necessary to understand before praising it or dismissing it.
Another competing but potentially complementary option is that if fewer person hours are needed but we have so many people, lower the number of hours before overtime kicks in. If we cut everyone's hours by 20%, 20% more people might get hired. Still, though, people wouldn't want to give up 20% of their pay, so giving more people jobs at the same pay rate for fewer hours does -- guess what -- inflate prices.
This has nothing to do with socialism. This is an attempt to strengthen the free market.
Money does magically appear. It has no value other than what a bunch of technocrats have agreed upon. We do print money with no value. But we give that money to a handful of institutions who decide as technocrats who gets money. A small club decides what market segments receive investments. They also decide who is able to get a loan. But that small club of technocrats have proven over and over again that they don't know what they are doing. Every 10-15 years governments over the world have to bailout banks with tax money. The financial sector is being kept alive with tax payer money, but don't bring to the society what they are supposed to bring. They only think about their own short term profits. That is socialism at its absolute worst!
Basic income also works with printing money with no value. But instead of giving it to a small club of institutions, the government gives everyone an equal share. Individuals, businesses, banks, ... have to compete for that money in a free market. Who gets the money? The person with the best idea. What business earns most? The business with the best products. What bank gets most? The bank with the best service toward the customer.
That's the idea of basic income. It is a liberal idea. But it is not the socialist kind of idea where the state runs businesses. The only thing the state does is collecting value added tax and giving everyone an equal share of money, without requiring the big bureaucracy to decide who is entitled for subsidizes or who has to pay what amount of income tax. Basic income goes hand in hand with a flat income tax system and a high value added tax. Flexible work, high VAT, low income tax, basic income, unregulated free market. That is what basic income is about. Are you happy with a basic income, a roof above your head and decent food? Just work a few days a month until you have enough. Do you want to live in luxury, go on holidays, have a big TV? Work a bit more.
Think about it. If you are happy with your basic income, you no longer need to work. If you want something more, you have to work for it. If you want to start your own business, you can spend your savings and work hard and succeed or fail. When you fail, no worries, you still have your basic income.
The main reason why I haven't started my own business is that I don't like insecurity. I've a nice income. Do I want to risk my safe live just to try my luck in my own business? I do not want to. When I start my own business, I need to invest my savings and I lose my income. Way too risky for me. With basic income, I would have started my own business 2 decades ago. When things wouldn't go as good as expected, I'd still have my basic income. If I would have succeeded I might have been an employer of many people.
It should be noted that such programs have been trialed in small areas. They're not only generally met with wide support, but they tell an interesting story. The rate of people working does drop, but only in certain categories: generally only 1) teenagers and young adults, who use the time to get a better education when they would otherwise have worked; and 2) new parents, who take more time to spend with their children. In other groups, the rate of work does not change. For those two groups, the lack of work is still a sacrifice - the basic income is well less than what one could earn with a proper job. But it lets people focus on what's important in their lives - for their happiness and their future.
"This administration is so incompetent that they cover their tracks with bigger tracks." - Seth Meyers