why don't Democrats propose tearing down all existing wall segments, thereby saving us the on-going expense of repairing and maintain the wall segments we have?
Most of the unauthorized immigrants are simply visa overstays. Many of the border crossers are migrant workers, and were coming and going until new security measures caused them to come and stay--increasing the unauthorized resident population. The drug lords and human traffickers build tunnels 90 feet below ground, under any wall.
The most-effective way to handle all this is to automatically renew any visa without cause to cancel; increase quotas and streamline the process of authorizing seasonal migrant workers; provide economic relief and development of the border towns in Mexico; eliminate the walls, aside from fences there more as a demarcation guide for importation of goods than any serious attempt to stop anyone; and establish a North American Compact allowing anyone granted pass into any of the US, Canada, or Mexico to freely move between any and allowing labor to move freely across borders.
Can you imagine the political impact of proposing this? Even the Democrats don't actually want to go that far, although they should.
Science is frequently like "we know MMR vaccine doesn't cause autism, this has been tested six times, let's peer-review the tests and use knock-out mice to test various genetic profiles as well, all of which will probably not experience autism". If some strain of mice experiences severe neurological and behavioral changes, then the scientists kind of gawk and go "WUT?" before recommending a change to MMR vaccine chemistry.
Often they expect to gain more information about something they don't much understand, and get something completely-unexpected instead of a refined viewpoint. It's like sailing out to find the edge of the earth and somehow ending up back where you started, then trying to explain how your pathing works on the flat-earth model. Scientists were surprised to discover the earth was round.
It looks like he took their Web site offline. If he actually did anything that endangers life and limb...well, that's the one thing I plan to leave in the Computer Fraud and Abuse Act as criminal; everything else--knocking out your Web site, for example--is a civil matter. We already have financial fraud laws.
The law is pretty much written like this: "BEING THAT HACKERS ARE SCARY WIZARDS AND MERE MORTALS CANNOT COMPREHEND THEIR AWESOME POWER, THOSE WHO USE THEIR WIZARDRY FOR EVIL ARE WITCHES AND SHALL BE BURNED TO DEATH WITH FIRE."
Seriously. Wrote a computer virus? 20 years in prison. Hacked a Web site? 10 years in prison. If we can stack up that you hacked into the site and took 500 unauthorized actions, or logged back in a dozen times, you're going to jail for LIFE!
This isn't helping. You know it's not helping. I know it's not helping.
If you do something dangerous, you should face criminal charges. If you're an annoyance, that's a civil matter.
It's not like Amazon can't fork the last fully-GPL MongoDB and continue on with life.
I've considered reimplementing the network and query protocols for MongoDB in an MIT-licensed library, allowing a storage back-end to use that as a drop-and-go MongoDB engine host--and if you're using the query protocol directly (without networking), you have MongoLite.
I've also considered extending it to include an optional transaction/relational model, but that's getting a bit out there.
The bankruptcy filing will cancel common stock and shield them from debts;
Many creditors will get nothing, or take a loss;
The big preferred-stock shareholders may be legally-entitled to a pay-out;
Executives walk off with whatever golden parachutes and existing compensation they've already received;
The employees will become unemployed.
The last two aren't interchangeable: executive mega-bonuses of a hundred million dollars divide up to around $400 per employee. These employees make thousands per month.
Because of the efficiency of concentration of production, the shock will cause a demand reduction in concentrated areas where AT&T employs people. That will reduce the revenues of other businesses, eliminating the need for and the capacity to pay
a number of employees. This cycles fractionally, eventually creating a multiplier of the original damage.
That, in turn, means several local areas will face high poverty and unemployment, resulting in crime, higher operating costs, and failures of local businesses. This causes more unemployment, and further reduces liquidity and money in the local area, increasing localized recessions.
In the end, even if the executives get zero bonuses, the employees get boned--and so do millions of people who don't even work for AT&T. Meanwhile the customers have to move to Verizon or T-Mobile, and we have to wait for the economy to turn over. These companies have localized operations in different geographical locations, and so the people who lose their jobs to AT&T's collapse may not be picked up by the recovery.
At infinity, governments or independent organizations make a magical infinite-goods machine once--the machine takes care of itself and does all the work, no human input.
Below that point, the same thing happens as has happened for the past hundreds of thousands of years.
If you're not supporting people, you still get the same downward spiral effect since the jobless still can't support themselves without crime which drives out business which makes more jobless, etc.
That's what your welfare system is for. The Dividend won't pay for your apartment; it will make you less-poor so HUD can pay for your apartment with less funding. HUD gives housing assistance to 1 in 4 qualified recipients; the remainder go on a waiting list, often for 10-15 years.
Welfare goes away when you get work, even if the economy is not yet coupled to the outside economy, which causes welfare stasis: the area stays in depression. The Dividend keeps pushing, so it lifts the economy even when everyone is working a minimal job, causing localized growth. Essentially, the income tax rate has to be negative in an area that cannot self-support so as to continue to lift and grow the economy.
You also lose the boost in entrepreneurship and the ability to shut down welfare and food stamps as well as eliminate minimum wage
Not looking to eliminate welfare, and I'm looking to tie minimum wage to 2/3 GNI/C (about $21/hr in 2016), although the transition takes a while. Minimum wage always falls on its own, and a higher minimum wage has some specific economic advantages in terms of shaping the economy.
A particular demogrant, yeah. This one is self-managing and doesn't attempt to supply income to cover basic needs; rather it supplies a share of all income by way of pay-in-pay-out (you pay X% in, you get R/p out for R revenue and p population).
Essentially it's a negative income tax. The zero point is ((R/p)/X%): if the premium is 2% and the payment is $1,400/year, the break-even for a one-adult household is $70,000 and for a two-adult household is $140,000. Everyone below that point is getting a net-benefit, although when you add in the general taxes the middle point is lower.
The middle-point follows GNI/C, rather than inflation; so does the payment. That means it grows faster than inflation. It's perpetually revenue-neutral and can't go insolvent (the design is such that it would survive the Great Depression--although it would more-likely prevent it).
Generally, a UBI tries to provide people support. This doesn't support households; it supports economies. Welfare and social insurances support households.
In Maryland, there's interest in a millionaire's tax, and I've proposed a State-level policy at 2% that substitutes as one. I've actually proposed quite a bit.
It is easy to fix, but hard to sell the fix until those 12,000 in A who are in no way qualified for one of the jobs in B decide that survival means they need to use their guns and knives.
Those cities become crime-riddled and folks decide that the people are like that because they're bad people. The guns and knives thing actually makes it harder to sell.
It's basically a liquidity problem. In Baltimore City, you'll get on the light rail when a fair is in town and people will be there with money, having shown up at 8am and worked until they got kicked out. They go right back the next day. There are people wandering around telling people they need jobs in these high-poverty, high-unemployment areas.
People are poor. "Poor" means you don't have enough money to buy things--if you didn't want to spend money, you wouldn't be poor. Thing is you can't pay people without revenue: businesses don't have a printing press.
High-poverty areas generally don't couple, and instead rely on local jobs (nobody has transit to distant jobs) and local consumers (they're not drawing in enough outside purchasing to create local jobs). The result? People want to work and to buy, and there's a lot of wealth here; we can't get any of it, because folks can't work, because they can't get paid, because folks can't buy.
This is a special type of problem: you can solve it by literally printing money and dumping it into the hands of these people, specifically, without any negative economic consequences. As you might imagine, that doesn't usually work: if we gave everybody a free $500,000/year, people wouldn't all be rich as shit; we'd just get inflation. (By contrast, if you go QE and fill the banks with money at low interest rates when there's a liquidity problem, nobody can pay loans, so nobody can get loans, so nothing happens--this doesn't cause inflation or fix the problem.)
The self-managing system for this is a Universal Dividend, an invention of my own that essentially creates a negative income tax via social insurance. You use a flat-rate tax to fund a Trust, and you divide the Trust's revenue in 24 equal payments throughout the year among all adults. Thus your dollar amount paid in depends on income, and your benefit doesn't: the poor are net-receivers and the rich are net-payers.
Such a system tends to pull its revenues from the incomes of people who have more of their money going to investments and savings--basically money that does nothing--and, at the high end, has zero impact on actual spending because the wealthiest are eventually just buying stocks with their excess money and simply purchase less stock.
Conversely, it tends to put the most net benefit in the hands of the poorest and, by extension, into the geographical regions represented by concentrated poverty. As such people can't afford savings, that money is spent.
The result is a dislodging of the liquidity crisis. More people work, so dividend revenues go up, and the payment increases. Higher minimum wages usually destroy high-poverty, high-unemployment areas because they must necessarily be paid by the poor there and thus reduce the number of jobs; but in combination with a dividend, the support actually increases. First, the concentration causes those who don't lose jobs to receive more of the money spent as wages, increasing the multiplier effect--more of that money recirculates in the local economy. Second, anyone who does become unemployed is impacted by a higher net benefit from the Dividend, which is then spent and affected by the multiplier effect, having a greater localized impact.
Welfare and social insurances help to hold households together under poverty pressures; as jobs become available, that input money evaporates, and the support for jobs reduces, reaching an equilibrium. A sufficiently-strong dividend breaks this and pushes toward coupling because it continues to have a net-positive impact on lower-income workers. Welfares and so
but not so well for the people who used to make the hot dogs
Right. The particular individuals (microeconomy) are generally SOL. You have social insurances and other government initiatives to clean that up.
The macroeconomics are that your unemployment rate is fine and the numbers prove it works out well for everybody. "Everybody" is a mass noun. What actually happens is town A collapses and town B fills with wealthy Silicon Valley workers as the industries shift around, so 10,000 unemployed over here become 12,000 new jobs over there.
It's a structural change issue, basically. As more damage piles up, it piles up as population numbers: the economy around the damage gets bigger, so it always looks like only a small number affected--because it's a small proportion. That's sustainable, but not optimal. It's easy to fix, though.
True, that makes hotdogs cheaper, but unless it makes them cost zero, the out of work hotdog and bun makers can't afford them.
The trick here is that only a portion of the population is out of work. In the real world it's usually something like 0.1% to 0.3% due to a factory shutting down or moving or whatnot. The other 99% can buy just fine, and the reduction in cost creates booming demand...somewhere. Maybe not for hotdogs. Somebody invents the hamburger.
When 5% of the jobs go away, you get the 2008 Great Depression. When 25% of the jobs go away, you get the 1932 Great Depression.
Basically, if the cost doesn't go to zero, the problem fixes itself...eventually. If the cost does go to zero, some charity or government takes over production, sets it up once, and provides it all for free to everyone.
That's because the rate of service is limited by the rate of customers, which is already being met fine
We have people outside begging for money to buy a hamburger at McDonalds. I've spent over $650 in one month to feed MYSELF eating fast food all the time. Are you telling me that if people had twice the money or fast food cost half as much that there wouldn't be more fast food sales per year?
Likewise, you're shifting from an economic model that's ridiculous in one way to one that's ridiculous in another way. When we try to address the obvious flaws in the hotdog model, we end up looking at an economy with way more than just hotdogs and buns--and a nursing shortage in the services industry. People are able to afford so much healthcare that we aren't hiring nurses fast enough already: we have more jobs there than people ready to do them.
We also have this 4% unemployment rate going on right now for some reason, and I still see liquidity problems outside--people saying they need jobs right in the same neighborhoods where people are begging for money to buy food. No revenue, no wage, no job. If people start buying, the shelves start emptying, and you have to hire more people.
I would really need to see your figures and reasoning regarding the middle class having a negative tax rate.
I usually carry around a rough worksheet on this stuff. The gist is that we can restructure the Federal social insurances to build on top a foundation of a 12.5% universal dividend without cutting services, largely re-basing OASDI (retirement and disability) on top that. For example: you receive $1,500 from retirement and disability each month; under the new system, everyone receive $500 each month, and you receive $1,000 from retirement and disability, so you get a total of $1,500 per month.
This income is counted as means-test, but not as taxable income (like OASDI FICA, it's not deducted from your income, and so is already taxed when you pay into it--yes, it's stupid, we double-tax OASDI because we tax you on Social Security payments as income!). Thus because people are less-poor, they are less-eligible for welfare, and our welfare system can provide stronger benefits and reach further with lower costs.
In any case, the blunt restructuring is 40.2% of collected income taxes, shifting the OASDI payroll FICA to personal incomes. Cut that out, add a 12.5% Dividend, then rebuild OASDI to fill in the gap left and you end up with higher middle brackets and a lower top bracket--or, as you said:
The dirty secret of the Scandinavian countries is that compared to the U.S. they have a much flatter tax rate.
Now here's the rub.
That pays $500/month, or $6,000/year, in 2016 to every adult.
If you account the program's benefit as a sort of rolling tax refund, then a person paying in $4,000 and getting back $6,000 is essentially paying -$2,000 of taxes. For a two-adult, joint-filing household, you can get near around $50,000 with a total tax load of less than $12,000, meaning those households are paying less than zero in taxes.
Further, taking a flat tax on gross personal income and net corporate profits trends with the per-capita income, meaning it includes all productivity gains: if inflation is 2% and you have a 5% productivity gain, then per-person you have 7.1% more dollars. OASDI's cost-of-living adjustment (COLA) raises that payment by 2%; the Dividend, meanwhile, increases by 7.1%, further reducing the load on the OAS and DI Trusts.
A larger minimum wage--Norway's is around 60% GNI/C or $21/hr, and I'm looking at moving to 2/3 GNI/C here in 1.75% increments--further reduces welfare claims. This works largely because the Dividend has its biggest impact on local spending around the poorest, thus creating jobs where unemployment and poverty are highest.
When you consider the reduction of localized unemployment by this strong collective risk sharing, you realize one more thing: a lot of people are out there demanding jobs, but there are no jobs because there is no spending in their area (liquidity problem). Resolving that doesn't merely reduce welfare costs; it increases per-capita productivity, bringing a larger tax base and more revenue. Criminal justice reforms do the same by reducing prison population and activating those people as productive labor.
As a result of all of this, the zero-tax point creeps upwards, approaching the GNI/Adult (higher than GNI/C) for a single adult or the household average for households. The tax rate on the middle-class eventually becomes negative wholesale.
Likewise, with fewer institutionalized, fewer unemployed, and higher minimum wages, productivity per-capita increases, even though productivity per working-hour doesn't: the activated per-capita working hours goes up when the unemployed become employed. That means the government has the same number of citizens to support, and the cost spreads. That means lower taxes for the same services.
The top rate of 25% is a stretch, but a middle-class negative rate is easy.
we are hitting an inflection point where computers and computerized machines are getting better than (most) humans at most types of work.
You mean someone actually invented the power loom? Oh, or were you talking about the wooden shipping pallet? The air-drive frame nailer?
You can say, well that's never happened before, so it won't happen this time.
I'm saying that's what has happened repeatedly. You're missing something: you surmise there will be no net-increase in human jobs because you don't understand where human jobs come from.
We don't invent jobs. We don't say, "Ah, now humans can make a new widget!" We simply respond to demand. Humans become more productive by employing machines, and so there is less total human labor, and less cost (don't pay so much in wages, due to fewer hours worked). This brings price competition, leaving us with the capacity to buy everything we used to buy and still have money left over.
Consumers, with money left over, say, "Hmm, I would like to buy a new widget!" This new widget, then, is affordable to consumers, and so the widget factories must expand.
Now you'll say: "But we automated the widget factories years ago, too!" Yes. Instead of 3,000 workers to produce a million widgets a year, we only use 30 workers. Those widgets cost 1/100 as much, and we can buy 100x as many--or we can buy less than 100x as many, and spend the money elsewhere. Thus if we produce ten million widgets--300 workers--and suddenly there is demand for thirty million widgets, the widget factory hires six hundred more workers.
The aggregate jobs come from the aggregate demand--or, rather, the aggregate spending divided among the aggregate labor costs, with profits taken out. Taxes tend to get spent, so the tax wedge does odd things, particularly it can be 10% without causing 10% increase in unemployment (and the net impact, if it dislodges a market failure, can be a reduction in unemployment and an increase in productivity).
There's one more thing.
Humans can multiply by roughly twenty-six times every ten years--more if you get every teenager pregnant as often as possible, too. They don't. We import labor to fill a need for labor at around 300,000 per year, plus any undocumented. When there's a sudden spike in job availability, we get boomer generations.
Basically, job availability impacts fertility decisions and labor movement. The population and workforce adjust continuously to match the labor demand. A long-term slowing of job growth results in a long-term slowing of population growth, and vice versa. That means you don't always need a net growth of 5%, or even a net growth; you just need to avoid a systemic shock.
You're hinting that laissez faire capitalism is fine because the system is self correcting
Nope, I'm suggesting that the jobs aren't all going away forever and that the economy actually doesn't work in this magical way people imagine.
The main point, however, is that the proposed solution is wrong. The proposed solution is to ensure the jobs never come back by ensuring the need for labor goes down while the prices don't.
When in your life has the correct solution to a complex problem been to ignore it and hope it goes away? Because that's more or less what you're suggesting.
Oh, the correct solution is to correct how minimum wage works and provide a universal dividend. Basically, all the shit you're babbling about with our economy isn't a food shortage problem (you're trying to project over from technological unemployment to climate change with a broken bridge, and the point here is the economics of progress and the shift in jobs--climate change is a separate problem), but a liquidity problem.
Minimum wage doesn't solve any liquidity problem (it actually makes it worse); however, a larger minimum wage doesn't increase unemployment rates, either--sort of. The labor force grows with job availability, and a larger minimum wage reduces job growth, leading to slower population and labor force growth.
When you combine minimum wage with a liquidity-crisis-solving tool like a universal dividend, the minimum wage acts as a modifier on the money multiplier effect: each dollar from the Dividend (or any assistance program, social insurance, or other stimulus) is divided proportionally less into outflow and more into wages. Combine a structural minimum wage at 2/3 the GNI/C (basically $21/hr, although we'll need to phase it in over years) with a Universal Dividend and a robust welfare and social insurance system and you essentially eliminate poverty and retain minimum unemployment at all times.
In other words: the correct solution to these particular economic problems is to pour money on it so it goes away.
Take a look at Norway and such, although we can do better. My models suggest the top tax rate would hit 45% if I got my own wishlist (and it's huge), and then long-term would reduce to around 25%, with the middle-class tax rate actually being negative.
Not enough pictures, but here's the gist: if the economy only produces hotdogs and buns, automating hotdog manufacture gets you producing 33% more hotdogs with 33% less labor. The journalist screams that millions of jobs have been destroyed, yet unemployment is low because we now need to produce 33% more buns and it takes 33% more labor to do that.
Long ago, we proclaimed America's economy was agriculture. Agriculture became more-productive--we make more agricultural products today than we did when we had 25 million farm workers, and we have fewer than one million farm workers--and there was this economic crisis because the agriculture industry collapsed. America didn't collapse: we got a lot of manufacture jobs.
General Motors was once the biggest company in the world. It was called the "Heartbeat of America". Manufacturing was American employment. We hear this story a lot today...oh, wrong story. There's a nursing shortage, and nursing is becoming a bigger part of our employment base because manufacturing is so damned productive. We manufacture a lot more today than we did in ages past; now everyone's getting into services--accounting, nursing, lawyering, even fast food.
So what does this have to do with taxing robots?
Imagine if we obsoleted 30% of our workforce.
Now imagine if the products didn't get any cheaper as a portion of income. We spent 40% of the average household income on food in 1900 and 13% in 2000--and in 2000 we ate a lot more food out of home, meaning we spent a lot of that 13% on services (the food number is closer to half that). As the cost of food and transportation went down, we spent money on other things.
"Taxing the robots" freezes economic growth and creates poverty. It's just raising the price for the consumer--or rather preventing the price from falling as jobs vanish.
If you want to turn productivity gains back to workers without increasing consumption, shorten working hours. This actually reduces the number of available jobs, but productivity gains increase the number of available jobs anyway.
There are good reasons to raise minimum wage with productivity and to provide a sort of universal dividend; the reasons you've given are complete bullshit.
The S&P500 recently, with a few annotations for RSI moving from above-50 to below-50; the confirmation of the 50-day moving average as a ceiling instead of a support; the 50-200 death cross; the dead cat bounce signaling the loss of the support floor at 2,635; and the weakness earlier this week showing the peak of the recent micro-swing as RSI recovers from oversold.
That doesn't even address the increase in bankruptcies, poor earnings reports, and layoffs since 2017; nor does it account for the loss of our soybean export market to Brazil.
Excise tax mostly hurts the poor. You're not making EVs cheaper; you're making non-EVs more-expensive.
Imagine if poor people could afford 30 days's worth of cheap junk-quality food or 12 days's worth of produce and fresh meat. They keep buying garbage processed canned goods, so you tax the shit out of it so they can only afford 9 days's worth of canned goods. What happens?
Slashdot Mirror
why don't Democrats propose tearing down all existing wall segments, thereby saving us the on-going expense of repairing and maintain the wall segments we have?
Most of the unauthorized immigrants are simply visa overstays. Many of the border crossers are migrant workers, and were coming and going until new security measures caused them to come and stay--increasing the unauthorized resident population. The drug lords and human traffickers build tunnels 90 feet below ground, under any wall.
The most-effective way to handle all this is to automatically renew any visa without cause to cancel; increase quotas and streamline the process of authorizing seasonal migrant workers; provide economic relief and development of the border towns in Mexico; eliminate the walls, aside from fences there more as a demarcation guide for importation of goods than any serious attempt to stop anyone; and establish a North American Compact allowing anyone granted pass into any of the US, Canada, or Mexico to freely move between any and allowing labor to move freely across borders.
Can you imagine the political impact of proposing this? Even the Democrats don't actually want to go that far, although they should.
You ever see what happens when children are rewarded for misbehaving?
Don't negotiate with terrorists.
Science is frequently like "we know MMR vaccine doesn't cause autism, this has been tested six times, let's peer-review the tests and use knock-out mice to test various genetic profiles as well, all of which will probably not experience autism". If some strain of mice experiences severe neurological and behavioral changes, then the scientists kind of gawk and go "WUT?" before recommending a change to MMR vaccine chemistry.
Often they expect to gain more information about something they don't much understand, and get something completely-unexpected instead of a refined viewpoint. It's like sailing out to find the edge of the earth and somehow ending up back where you started, then trying to explain how your pathing works on the flat-earth model. Scientists were surprised to discover the earth was round.
Is there a magic "we exchange the key without it being eaves dropped" in there?
two ends then compare their polarizer settings and discard the bits where the polarizer setting did not match
How do they transfer this information?
The mechanism they describe is also classical physics.
That's what USB-C is.
It looks like he took their Web site offline. If he actually did anything that endangers life and limb...well, that's the one thing I plan to leave in the Computer Fraud and Abuse Act as criminal; everything else--knocking out your Web site, for example--is a civil matter. We already have financial fraud laws.
The law is pretty much written like this: "BEING THAT HACKERS ARE SCARY WIZARDS AND MERE MORTALS CANNOT COMPREHEND THEIR AWESOME POWER, THOSE WHO USE THEIR WIZARDRY FOR EVIL ARE WITCHES AND SHALL BE BURNED TO DEATH WITH FIRE."
Seriously. Wrote a computer virus? 20 years in prison. Hacked a Web site? 10 years in prison. If we can stack up that you hacked into the site and took 500 unauthorized actions, or logged back in a dozen times, you're going to jail for LIFE!
This isn't helping. You know it's not helping. I know it's not helping.
If you do something dangerous, you should face criminal charges. If you're an annoyance, that's a civil matter.
Actually, the DMCA contains a provision such that doing this may result in losing the right to ever make another copyright claim.
It's not like Amazon can't fork the last fully-GPL MongoDB and continue on with life.
I've considered reimplementing the network and query protocols for MongoDB in an MIT-licensed library, allowing a storage back-end to use that as a drop-and-go MongoDB engine host--and if you're using the query protocol directly (without networking), you have MongoLite.
I've also considered extending it to include an optional transaction/relational model, but that's getting a bit out there.
AT&T has 250,000 employees. If they fail:
The last two aren't interchangeable: executive mega-bonuses of a hundred million dollars divide up to around $400 per employee. These employees make thousands per month.
Because of the efficiency of concentration of production, the shock will cause a demand reduction in concentrated areas where AT&T employs people. That will reduce the revenues of other businesses, eliminating the need for and the capacity to pay a number of employees. This cycles fractionally, eventually creating a multiplier of the original damage.
That, in turn, means several local areas will face high poverty and unemployment, resulting in crime, higher operating costs, and failures of local businesses. This causes more unemployment, and further reduces liquidity and money in the local area, increasing localized recessions.
In the end, even if the executives get zero bonuses, the employees get boned--and so do millions of people who don't even work for AT&T. Meanwhile the customers have to move to Verizon or T-Mobile, and we have to wait for the economy to turn over. These companies have localized operations in different geographical locations, and so the people who lose their jobs to AT&T's collapse may not be picked up by the recovery.
This is why we have bail-outs.
At infinity, governments or independent organizations make a magical infinite-goods machine once--the machine takes care of itself and does all the work, no human input.
Below that point, the same thing happens as has happened for the past hundreds of thousands of years.
If you're not supporting people, you still get the same downward spiral effect since the jobless still can't support themselves without crime which drives out business which makes more jobless, etc.
That's what your welfare system is for. The Dividend won't pay for your apartment; it will make you less-poor so HUD can pay for your apartment with less funding. HUD gives housing assistance to 1 in 4 qualified recipients; the remainder go on a waiting list, often for 10-15 years.
Welfare goes away when you get work, even if the economy is not yet coupled to the outside economy, which causes welfare stasis: the area stays in depression. The Dividend keeps pushing, so it lifts the economy even when everyone is working a minimal job, causing localized growth. Essentially, the income tax rate has to be negative in an area that cannot self-support so as to continue to lift and grow the economy.
You also lose the boost in entrepreneurship and the ability to shut down welfare and food stamps as well as eliminate minimum wage
Not looking to eliminate welfare, and I'm looking to tie minimum wage to 2/3 GNI/C (about $21/hr in 2016), although the transition takes a while. Minimum wage always falls on its own, and a higher minimum wage has some specific economic advantages in terms of shaping the economy.
A particular demogrant, yeah. This one is self-managing and doesn't attempt to supply income to cover basic needs; rather it supplies a share of all income by way of pay-in-pay-out (you pay X% in, you get R/p out for R revenue and p population).
Essentially it's a negative income tax. The zero point is ((R/p)/X%): if the premium is 2% and the payment is $1,400/year, the break-even for a one-adult household is $70,000 and for a two-adult household is $140,000. Everyone below that point is getting a net-benefit, although when you add in the general taxes the middle point is lower.
The middle-point follows GNI/C, rather than inflation; so does the payment. That means it grows faster than inflation. It's perpetually revenue-neutral and can't go insolvent (the design is such that it would survive the Great Depression--although it would more-likely prevent it).
Generally, a UBI tries to provide people support. This doesn't support households; it supports economies. Welfare and social insurances support households.
In Maryland, there's interest in a millionaire's tax, and I've proposed a State-level policy at 2% that substitutes as one. I've actually proposed quite a bit.
It is easy to fix, but hard to sell the fix until those 12,000 in A who are in no way qualified for one of the jobs in B decide that survival means they need to use their guns and knives.
Those cities become crime-riddled and folks decide that the people are like that because they're bad people. The guns and knives thing actually makes it harder to sell.
It's basically a liquidity problem. In Baltimore City, you'll get on the light rail when a fair is in town and people will be there with money, having shown up at 8am and worked until they got kicked out. They go right back the next day. There are people wandering around telling people they need jobs in these high-poverty, high-unemployment areas.
People are poor. "Poor" means you don't have enough money to buy things--if you didn't want to spend money, you wouldn't be poor. Thing is you can't pay people without revenue: businesses don't have a printing press.
High-poverty areas generally don't couple, and instead rely on local jobs (nobody has transit to distant jobs) and local consumers (they're not drawing in enough outside purchasing to create local jobs). The result? People want to work and to buy, and there's a lot of wealth here; we can't get any of it, because folks can't work, because they can't get paid, because folks can't buy.
This is a special type of problem: you can solve it by literally printing money and dumping it into the hands of these people, specifically, without any negative economic consequences. As you might imagine, that doesn't usually work: if we gave everybody a free $500,000/year, people wouldn't all be rich as shit; we'd just get inflation. (By contrast, if you go QE and fill the banks with money at low interest rates when there's a liquidity problem, nobody can pay loans, so nobody can get loans, so nothing happens--this doesn't cause inflation or fix the problem.)
The self-managing system for this is a Universal Dividend, an invention of my own that essentially creates a negative income tax via social insurance. You use a flat-rate tax to fund a Trust, and you divide the Trust's revenue in 24 equal payments throughout the year among all adults. Thus your dollar amount paid in depends on income, and your benefit doesn't: the poor are net-receivers and the rich are net-payers.
Such a system tends to pull its revenues from the incomes of people who have more of their money going to investments and savings--basically money that does nothing--and, at the high end, has zero impact on actual spending because the wealthiest are eventually just buying stocks with their excess money and simply purchase less stock.
Conversely, it tends to put the most net benefit in the hands of the poorest and, by extension, into the geographical regions represented by concentrated poverty. As such people can't afford savings, that money is spent.
The result is a dislodging of the liquidity crisis. More people work, so dividend revenues go up, and the payment increases. Higher minimum wages usually destroy high-poverty, high-unemployment areas because they must necessarily be paid by the poor there and thus reduce the number of jobs; but in combination with a dividend, the support actually increases. First, the concentration causes those who don't lose jobs to receive more of the money spent as wages, increasing the multiplier effect--more of that money recirculates in the local economy. Second, anyone who does become unemployed is impacted by a higher net benefit from the Dividend, which is then spent and affected by the multiplier effect, having a greater localized impact.
Welfare and social insurances help to hold households together under poverty pressures; as jobs become available, that input money evaporates, and the support for jobs reduces, reaching an equilibrium. A sufficiently-strong dividend breaks this and pushes toward coupling because it continues to have a net-positive impact on lower-income workers. Welfares and so
but not so well for the people who used to make the hot dogs
Right. The particular individuals (microeconomy) are generally SOL. You have social insurances and other government initiatives to clean that up.
The macroeconomics are that your unemployment rate is fine and the numbers prove it works out well for everybody. "Everybody" is a mass noun. What actually happens is town A collapses and town B fills with wealthy Silicon Valley workers as the industries shift around, so 10,000 unemployed over here become 12,000 new jobs over there.
It's a structural change issue, basically. As more damage piles up, it piles up as population numbers: the economy around the damage gets bigger, so it always looks like only a small number affected--because it's a small proportion. That's sustainable, but not optimal. It's easy to fix, though.
True, that makes hotdogs cheaper, but unless it makes them cost zero, the out of work hotdog and bun makers can't afford them.
The trick here is that only a portion of the population is out of work. In the real world it's usually something like 0.1% to 0.3% due to a factory shutting down or moving or whatnot. The other 99% can buy just fine, and the reduction in cost creates booming demand...somewhere. Maybe not for hotdogs. Somebody invents the hamburger.
When 5% of the jobs go away, you get the 2008 Great Depression. When 25% of the jobs go away, you get the 1932 Great Depression.
Basically, if the cost doesn't go to zero, the problem fixes itself...eventually. If the cost does go to zero, some charity or government takes over production, sets it up once, and provides it all for free to everyone.
That's because the rate of service is limited by the rate of customers, which is already being met fine
We have people outside begging for money to buy a hamburger at McDonalds. I've spent over $650 in one month to feed MYSELF eating fast food all the time. Are you telling me that if people had twice the money or fast food cost half as much that there wouldn't be more fast food sales per year?
Likewise, you're shifting from an economic model that's ridiculous in one way to one that's ridiculous in another way. When we try to address the obvious flaws in the hotdog model, we end up looking at an economy with way more than just hotdogs and buns--and a nursing shortage in the services industry. People are able to afford so much healthcare that we aren't hiring nurses fast enough already: we have more jobs there than people ready to do them.
We also have this 4% unemployment rate going on right now for some reason, and I still see liquidity problems outside--people saying they need jobs right in the same neighborhoods where people are begging for money to buy food. No revenue, no wage, no job. If people start buying, the shelves start emptying, and you have to hire more people.
I would really need to see your figures and reasoning regarding the middle class having a negative tax rate.
I usually carry around a rough worksheet on this stuff. The gist is that we can restructure the Federal social insurances to build on top a foundation of a 12.5% universal dividend without cutting services, largely re-basing OASDI (retirement and disability) on top that. For example: you receive $1,500 from retirement and disability each month; under the new system, everyone receive $500 each month, and you receive $1,000 from retirement and disability, so you get a total of $1,500 per month.
This income is counted as means-test, but not as taxable income (like OASDI FICA, it's not deducted from your income, and so is already taxed when you pay into it--yes, it's stupid, we double-tax OASDI because we tax you on Social Security payments as income!). Thus because people are less-poor, they are less-eligible for welfare, and our welfare system can provide stronger benefits and reach further with lower costs.
In any case, the blunt restructuring is 40.2% of collected income taxes, shifting the OASDI payroll FICA to personal incomes. Cut that out, add a 12.5% Dividend, then rebuild OASDI to fill in the gap left and you end up with higher middle brackets and a lower top bracket--or, as you said:
The dirty secret of the Scandinavian countries is that compared to the U.S. they have a much flatter tax rate.
Now here's the rub.
That pays $500/month, or $6,000/year, in 2016 to every adult.
If you account the program's benefit as a sort of rolling tax refund, then a person paying in $4,000 and getting back $6,000 is essentially paying -$2,000 of taxes. For a two-adult, joint-filing household, you can get near around $50,000 with a total tax load of less than $12,000, meaning those households are paying less than zero in taxes.
Further, taking a flat tax on gross personal income and net corporate profits trends with the per-capita income, meaning it includes all productivity gains: if inflation is 2% and you have a 5% productivity gain, then per-person you have 7.1% more dollars. OASDI's cost-of-living adjustment (COLA) raises that payment by 2%; the Dividend, meanwhile, increases by 7.1%, further reducing the load on the OAS and DI Trusts.
A larger minimum wage--Norway's is around 60% GNI/C or $21/hr, and I'm looking at moving to 2/3 GNI/C here in 1.75% increments--further reduces welfare claims. This works largely because the Dividend has its biggest impact on local spending around the poorest, thus creating jobs where unemployment and poverty are highest.
When you consider the reduction of localized unemployment by this strong collective risk sharing, you realize one more thing: a lot of people are out there demanding jobs, but there are no jobs because there is no spending in their area (liquidity problem). Resolving that doesn't merely reduce welfare costs; it increases per-capita productivity, bringing a larger tax base and more revenue. Criminal justice reforms do the same by reducing prison population and activating those people as productive labor.
As a result of all of this, the zero-tax point creeps upwards, approaching the GNI/Adult (higher than GNI/C) for a single adult or the household average for households. The tax rate on the middle-class eventually becomes negative wholesale.
Likewise, with fewer institutionalized, fewer unemployed, and higher minimum wages, productivity per-capita increases, even though productivity per working-hour doesn't: the activated per-capita working hours goes up when the unemployed become employed. That means the government has the same number of citizens to support, and the cost spreads. That means lower taxes for the same services.
The top rate of 25% is a stretch, but a middle-class negative rate is easy.
we are hitting an inflection point where computers and computerized machines are getting better than (most) humans at most types of work.
You mean someone actually invented the power loom? Oh, or were you talking about the wooden shipping pallet? The air-drive frame nailer?
You can say, well that's never happened before, so it won't happen this time.
I'm saying that's what has happened repeatedly. You're missing something: you surmise there will be no net-increase in human jobs because you don't understand where human jobs come from.
We don't invent jobs. We don't say, "Ah, now humans can make a new widget!" We simply respond to demand. Humans become more productive by employing machines, and so there is less total human labor, and less cost (don't pay so much in wages, due to fewer hours worked). This brings price competition, leaving us with the capacity to buy everything we used to buy and still have money left over.
Consumers, with money left over, say, "Hmm, I would like to buy a new widget!" This new widget, then, is affordable to consumers, and so the widget factories must expand.
Now you'll say: "But we automated the widget factories years ago, too!" Yes. Instead of 3,000 workers to produce a million widgets a year, we only use 30 workers. Those widgets cost 1/100 as much, and we can buy 100x as many--or we can buy less than 100x as many, and spend the money elsewhere. Thus if we produce ten million widgets--300 workers--and suddenly there is demand for thirty million widgets, the widget factory hires six hundred more workers.
The aggregate jobs come from the aggregate demand--or, rather, the aggregate spending divided among the aggregate labor costs, with profits taken out. Taxes tend to get spent, so the tax wedge does odd things, particularly it can be 10% without causing 10% increase in unemployment (and the net impact, if it dislodges a market failure, can be a reduction in unemployment and an increase in productivity).
There's one more thing.
Humans can multiply by roughly twenty-six times every ten years--more if you get every teenager pregnant as often as possible, too. They don't. We import labor to fill a need for labor at around 300,000 per year, plus any undocumented. When there's a sudden spike in job availability, we get boomer generations.
Basically, job availability impacts fertility decisions and labor movement. The population and workforce adjust continuously to match the labor demand. A long-term slowing of job growth results in a long-term slowing of population growth, and vice versa. That means you don't always need a net growth of 5%, or even a net growth; you just need to avoid a systemic shock.
You're hinting that laissez faire capitalism is fine because the system is self correcting
Nope, I'm suggesting that the jobs aren't all going away forever and that the economy actually doesn't work in this magical way people imagine.
The main point, however, is that the proposed solution is wrong. The proposed solution is to ensure the jobs never come back by ensuring the need for labor goes down while the prices don't.
When in your life has the correct solution to a complex problem been to ignore it and hope it goes away? Because that's more or less what you're suggesting.
Oh, the correct solution is to correct how minimum wage works and provide a universal dividend. Basically, all the shit you're babbling about with our economy isn't a food shortage problem (you're trying to project over from technological unemployment to climate change with a broken bridge, and the point here is the economics of progress and the shift in jobs--climate change is a separate problem), but a liquidity problem.
Minimum wage doesn't solve any liquidity problem (it actually makes it worse); however, a larger minimum wage doesn't increase unemployment rates, either--sort of. The labor force grows with job availability, and a larger minimum wage reduces job growth, leading to slower population and labor force growth.
When you combine minimum wage with a liquidity-crisis-solving tool like a universal dividend, the minimum wage acts as a modifier on the money multiplier effect: each dollar from the Dividend (or any assistance program, social insurance, or other stimulus) is divided proportionally less into outflow and more into wages. Combine a structural minimum wage at 2/3 the GNI/C (basically $21/hr, although we'll need to phase it in over years) with a Universal Dividend and a robust welfare and social insurance system and you essentially eliminate poverty and retain minimum unemployment at all times.
In other words: the correct solution to these particular economic problems is to pour money on it so it goes away.
Take a look at Norway and such, although we can do better. My models suggest the top tax rate would hit 45% if I got my own wishlist (and it's huge), and then long-term would reduce to around 25%, with the middle-class tax rate actually being negative.
because they're afraid we might start taxing their robots
Okay let's start with this.
Not enough pictures, but here's the gist: if the economy only produces hotdogs and buns, automating hotdog manufacture gets you producing 33% more hotdogs with 33% less labor. The journalist screams that millions of jobs have been destroyed, yet unemployment is low because we now need to produce 33% more buns and it takes 33% more labor to do that.
Long ago, we proclaimed America's economy was agriculture. Agriculture became more-productive--we make more agricultural products today than we did when we had 25 million farm workers, and we have fewer than one million farm workers--and there was this economic crisis because the agriculture industry collapsed. America didn't collapse: we got a lot of manufacture jobs.
General Motors was once the biggest company in the world. It was called the "Heartbeat of America". Manufacturing was American employment. We hear this story a lot today...oh, wrong story. There's a nursing shortage, and nursing is becoming a bigger part of our employment base because manufacturing is so damned productive. We manufacture a lot more today than we did in ages past; now everyone's getting into services--accounting, nursing, lawyering, even fast food.
So what does this have to do with taxing robots?
Imagine if we obsoleted 30% of our workforce.
Now imagine if the products didn't get any cheaper as a portion of income. We spent 40% of the average household income on food in 1900 and 13% in 2000--and in 2000 we ate a lot more food out of home, meaning we spent a lot of that 13% on services (the food number is closer to half that). As the cost of food and transportation went down, we spent money on other things.
"Taxing the robots" freezes economic growth and creates poverty. It's just raising the price for the consumer--or rather preventing the price from falling as jobs vanish.
If you want to turn productivity gains back to workers without increasing consumption, shorten working hours. This actually reduces the number of available jobs, but productivity gains increase the number of available jobs anyway.
There are good reasons to raise minimum wage with productivity and to provide a sort of universal dividend; the reasons you've given are complete bullshit.
Well, mostly what I meant to say is: back your shit up with actual facts, because I have actual economic data which shows you're wrong.
Oh you want to play that game? Okay.
Unemployment rate, complete with which president was in power at the time.
Stock market, complete with sitting president at the time.
Federal deficit spending, by year, you know who was president when.
The S&P500 recently, with a few annotations for RSI moving from above-50 to below-50; the confirmation of the 50-day moving average as a ceiling instead of a support; the 50-200 death cross; the dead cat bounce signaling the loss of the support floor at 2,635; and the weakness earlier this week showing the peak of the recent micro-swing as RSI recovers from oversold.
That doesn't even address the increase in bankruptcies, poor earnings reports, and layoffs since 2017; nor does it account for the loss of our soybean export market to Brazil.
Excise tax mostly hurts the poor. You're not making EVs cheaper; you're making non-EVs more-expensive.
Imagine if poor people could afford 30 days's worth of cheap junk-quality food or 12 days's worth of produce and fresh meat. They keep buying garbage processed canned goods, so you tax the shit out of it so they can only afford 9 days's worth of canned goods. What happens?