Guaranteed/Basic Income

[HuskerShark]

Couple of thoughts....

 

Please forgive me, as I am no expert in the field (I did take one Macro class in college, though), but I fail to see how this would cause inflation. If the $1 trillion (estimate I saw for welfare payments - people seem to debate the legitimacy of that value) is already in the system and being spent by those on welfare, I don't see how how shifting the money to a larger group of people to spend would cause problems, other than we'd be cutting the benefit to those currently receiving them by approx. 50%. Maybe that isn't a problem as I would imagine there are a lot of people just milking the system... but there are some that truly need it...

 

Also, I don't know why considering their economic beliefs are polar opposites, but for some reason I began reading 84's posts with Bernie Sanders/Larry David voice in my head and it was it quite enjoyable.... plan on doing it in the 'Crootin Forum.

 

If you redistribute the $1 trillion, each American would receive approximately $3...

 

The topic is paying $20-30K to every adult... Yeah, lots more government spending.

[cm husker]

But offset by reductions in other spending. I think most believe that you could achieve it for much less than the current cost of the welfare machine.

 

I'm surprised by the number of people arguing against what would be massive tax relief for a lot of middle class Americans.

[JJ Husker]

Couple of thoughts....

 

Please forgive me, as I am no expert in the field (I did take one Macro class in college, though), but I fail to see how this would cause inflation. If the $1 trillion (estimate I saw for welfare payments - people seem to debate the legitimacy of that value) is already in the system and being spent by those on welfare, I don't see how how shifting the money to a larger group of people to spend would cause problems, other than we'd be cutting the benefit to those currently receiving them by approx. 50%. Maybe that isn't a problem as I would imagine there are a lot of people just milking the system... but there are some that truly need it...

 

Also, I don't know why considering their economic beliefs are polar opposites, but for some reason I began reading 84's posts with Bernie Sanders/Larry David voice in my head and it was it quite enjoyable.... plan on doing it in the 'Crootin Forum.

Here's my concern. My example is based on very rough numbers that I am sure are far from accurate but I will use some that have already been tossed around and I think it will show why I feel one of the results would be inflation. Of course I'm no Milton Friedman....

 

Current welfare spending $1T. If that currently equates to about $20K per person, that would be 50M people already on the dole. The population of the USA is about 320M. So, 50M on the dole, 270M not on it currently.

 

Now we give everyone (all 320M) $20K per year, that would be a total outlay of $6.4T minus the existing $1T = an additional $5.4T being paid out by our government and thus ending up as additional disposable income, Yearly. So my questions remain the same: Where does that yearly $5.4T come from and how does that infusion of disposable income not drive up the cost of living? Sure it may drive some economic expansion to help offset some of it but I really need it explained where it comes from first so I can entertain that thought. Are we talking about increasing the taxes on the 270M to fund this? There isn't $5.4T of efficiency savings in a $1T system (well there might be the way our government works )

 

I get the feeling I'm missing something very important, and I might very well be, but cm sure hasn't spread any light on it yet. Maybe you can. I'm simply applying math and common sense and some basic understanding of economics. If that can't get me any closer to making it work than $5.4T I really have the feeling I'm mostly correct.

[BigRedBuster]

How much does it cost the government to manage these programs?

 

I fail to see why someone is getting all in a dither just because we are discussing an idea. Nobody has said..."HEY....WE NEED TO GO TO THIS PROGRAM RIGHT NOW".

 

All anyone has said is that it's an interesting idea and we would like to see the numbers behind it.

[cm husker]

 

Couple of thoughts....

 

Please forgive me, as I am no expert in the field (I did take one Macro class in college, though), but I fail to see how this would cause inflation. If the $1 trillion (estimate I saw for welfare payments - people seem to debate the legitimacy of that value) is already in the system and being spent by those on welfare, I don't see how how shifting the money to a larger group of people to spend would cause problems, other than we'd be cutting the benefit to those currently receiving them by approx. 50%. Maybe that isn't a problem as I would imagine there are a lot of people just milking the system... but there are some that truly need it...

 

Also, I don't know why considering their economic beliefs are polar opposites, but for some reason I began reading 84's posts with Bernie Sanders/Larry David voice in my head and it was it quite enjoyable.... plan on doing it in the 'Crootin Forum.

Here's my concern. My example is based on very rough numbers that I am sure are far from accurate but I will use some that have already been tossed around and I think it will show why I feel one of the results would be inflation. Of course I'm no Milton Friedman....

 

Current welfare spending $1T. If that currently equates to about $20K per person, that would be 50M people already on the dole. The population of the USA is about 320M. So, 50M on the dole, 270M not on it currently.

 

Now we give everyone (all 320M) $20K per year, that would be a total outlay of $6.4T minus the existing $1T = an additional $5.4T being paid out by our government and thus ending up as additional disposable income, Yearly. So my questions remain the same: Where does that yearly $5.4T come from and how does that infusion of disposable income not drive up the cost of living? Sure it may drive some economic expansion to help offset some of it but I really need it explained where it comes from first so I can entertain that thought. Are we talking about increasing the taxes on the 270M to fund this? There isn't $5.4T of efficiency savings in a $1T system (well there might be the way our government works )

 

I get the feeling I'm missing something very important, and I might very well be, but cm sure hasn't spread any light on it yet. Maybe you can. I'm simply applying math and common sense and some basic understanding of economics. If that can't get me any closer to making it work than $5.4T I really have the feeling I'm mostly correct.

 

 

 

I know you're using rough numbers, but they aren't even remotely close. There are not 320M adults in the country, for example.

And,w e need to look well beyond just the $1T figure that you're quoting to see the possible savings. That number is only based on the "means tested" federal welfare programs and does not include things like social security, medicare and medicaid (which this would replace). It also doesn't adequately capture the administrative costs that are lost under the current system.

 

It's also imperative to remind people that it's not clear that a guaranteed income would result in a net expenditure savings. It very well may not, but it would result in a more "fair" approach to redistribution of productivity than what we see today, because it would (or at least should) be coupled with a significant overall to our tax system, which, despite the rhetoric, actually tends to redistribute wealth from the less wealthy to the more wealthy through our complex system of deductions and exemptions.

 

It also achieves an ultra-important goal of taking away disincentive to work in order to avoid the "welfare cliffs" associated with "earning out" of a welfare benefit's means test.

 

 

p.s. My head is going to explode if one more person says "this drives up inflation" without actually addressing the numerous counter-arguments and evidence presented so far. That claim has been refuted time and again, but in any event, why would we deny people tax relief because it supposedly drives up COL? Why would, as noted by some here, replacing welfare stamps with cash have a more deleterious effect on inflation than the current system.

[huskerhill]

Wasn't the $20-$30k thrown out by BRB as an example?

 

From my lazy research, it would appear that a person on welfare will receive approx $10k a year. While I would agee with CM that getting rid of the numerous programs under wellfare would save quite a bit of money that could be put towards benefits, I don't think it would come close to providing the amount needed to give everyone that much money. I think our government has proven it is unable to slash spending so I doubt they would find other areas to fund the program.

 

I feel like I'm missing something now, also.

[huskerhill]

 

Couple of thoughts....

 

Please forgive me, as I am no expert in the field (I did take one Macro class in college, though), but I fail to see how this would cause inflation. If the $1 trillion (estimate I saw for welfare payments - people seem to debate the legitimacy of that value) is already in the system and being spent by those on welfare, I don't see how how shifting the money to a larger group of people to spend would cause problems, other than we'd be cutting the benefit to those currently receiving them by approx. 50%. Maybe that isn't a problem as I would imagine there are a lot of people just milking the system... but there are some that truly need it...

 

Also, I don't know why considering their economic beliefs are polar opposites, but for some reason I began reading 84's posts with Bernie Sanders/Larry David voice in my head and it was it quite enjoyable.... plan on doing it in the 'Crootin Forum.

 

If you redistribute the $1 trillion, each American would receive approximately $3...

 

The topic is paying $20-30K to every adult... Yeah, lots more government spending.

 

 

Check your work.....

[JJ Husker]

p.s. My head is going to explode if one more person says "this drives up inflation"

This drives up inflation.

[Moiraine]

 

 

Couple of thoughts....

 

Please forgive me, as I am no expert in the field (I did take one Macro class in college, though), but I fail to see how this would cause inflation. If the $1 trillion (estimate I saw for welfare payments - people seem to debate the legitimacy of that value) is already in the system and being spent by those on welfare, I don't see how how shifting the money to a larger group of people to spend would cause problems, other than we'd be cutting the benefit to those currently receiving them by approx. 50%. Maybe that isn't a problem as I would imagine there are a lot of people just milking the system... but there are some that truly need it...

 

Also, I don't know why considering their economic beliefs are polar opposites, but for some reason I began reading 84's posts with Bernie Sanders/Larry David voice in my head and it was it quite enjoyable.... plan on doing it in the 'Crootin Forum.

 

If you redistribute the $1 trillion, each American would receive approximately $3...

 

The topic is paying $20-30K to every adult... Yeah, lots more government spending.

 

 

Check your work.....

 

 

You mean there aren't 333 billion people in the U.S.?

[JJ Husker]

How much does it cost the government to manage these programs?

 

I fail to see why someone is getting all in a dither just because we are discussing an idea. Nobody has said..."HEY....WE NEED TO GO TO THIS PROGRAM RIGHT NOW".

 

All anyone has said is that it's an interesting idea and we would like to see the numbers behind it.

I think it's an interesting idea. I know the existing system needs to be fixed and I'm all for exploring all possibilities, even much wilder ones than this. But somebody has been saying much more than "it's an interesting idea and we would like to see the numbers". Somebody has been acting like it is a proven system and that there are no possible pitfalls or unintended consequences. If that causes my comments to come off as "all in a dither" well, so be it. I'll keep acting in that manner until somebody shows me where the numbers even come close to adding up but, I'll probably give up on the topic all together first because I find the discussion quite frustrating and unhelpful.

[BigRedBuster]

No, you came in with both barrels blazing claiming it was the dumbest idea and anyone who even considers it is basically uneducated on anything pertaining to this.

 

He, then has discussed it in a positive light and what might and corrected some of your assumptions.

[cm husker]

Wasn't the $20-$30k thrown out by BRB as an example?

 

From my lazy research, it would appear that a person on welfare will receive approx $10k a year. While I would agee with CM that getting rid of the numerous programs under wellfare would save quite a bit of money that could be put towards benefits, I don't think it would come close to providing the amount needed to give everyone that much money. I think our government has proven it is unable to slash spending so I doubt they would find other areas to fund the program.

 

I feel like I'm missing something now, also.

 

Correct, it would require political will. Maybe we don't have it. It would have to be coupled with holistic reforms of the tax system and the type/quality of people we attract to government.

 

Here's an interesting thought experiment:

 

Imagine a world that is completely automated, so that we can put production of goods and services on "cruise control" thereby retaining our GDP growth rate, but reducing the need for people to work.

 

In such a world, should we encourage people to stop working by simply cutting everyone a check and enjoy allow people to pursue less profitable, but potentially important pursuits, or even just increase their leisure time?

 

Would such a situation be different than an extension of the per/hour productivity improvements we've seen which have driven down the costs of goods and afforded people the ability to work only 40 hours a week?

 

Why keep people shackled to labor if we don't need to through automation or other efficiencies?

[huskerhill]

 

Wasn't the $20-$30k thrown out by BRB as an example?

 

From my lazy research, it would appear that a person on welfare will receive approx $10k a year. While I would agee with CM that getting rid of the numerous programs under wellfare would save quite a bit of money that could be put towards benefits, I don't think it would come close to providing the amount needed to give everyone that much money. I think our government has proven it is unable to slash spending so I doubt they would find other areas to fund the program.

 

I feel like I'm missing something now, also.

 

Correct, it would require political will. Maybe we don't have it. It would have to be coupled with holistic reforms of the tax system and the type/quality of people we attract to government.

 

Here's an interesting thought experiment:

 

Imagine a world that is completely automated, so that we can put production of goods and services on "cruise control" thereby retaining our GDP growth rate, but reducing the need for people to work.

 

In such a world, should we encourage people to stop working by simply cutting everyone a check and enjoy allow people to pursue less profitable, but potentially important pursuits, or even just increase their leisure time?

 

Would such a situation be different than an extension of the per/hour productivity improvements we've seen which have driven down the costs of goods and afforded people the ability to work only 40 hours a week?

 

Why keep people shackled to labor if we don't need to through automation or other efficiencies?

 

To be honest, that sounds horrible...

[JJ Husker]

No, you came in with both barrels blazing claiming it was the dumbest idea and anyone who even considers it is basically uneducated on anything pertaining to this.

 

He, then has discussed it in a positive light and what might and corrected some of your assumptions.

You're right, I did come in to the discussion with both barrels blazing and convinced it was idiocy. But then I apologized for that, backed off and tried to consider it more reasonably. But I still don't see where the numbers add up, and he pretty much continued to treat it like none of my concerns (which he largely failed to address) were valid. And he questioned my understanding of economics, my education, and has made numerous assumptions based on my political leanings which really are not affecting my thoughts on it in the least. But I guess that only makes me the dick here. Whatever man. You guys keep discussing it. I'm done. PM me when it goes absolutely anywhere in the real world and I'll come back and say I was wrong.

[HuskerShark]

My fault on the math. Friday brain.

 

Correction - $3000 per person.