10 ms·

A Simple Fix for Our Massive Inequality Problem

42 points by untangle 9y ago

ng-user 9y ago
What if I told you there were no "Simple Fixes" for "Massive ____ Problems"
- heimatau 9y ago
  It's so simple...no one will do it. Lol.
cholmon 9y ago
FTA, "It’s called a social wealth fund, a pool of investment assets in some ways like the giant index or mutual funds already popular with retirement savings accounts or pension funds, but one owned collectively by society as a whole. One that paid dividends not to the few, or even just to the shrinking middle class lucky enough to have their savings invested, but to everyone."
- crooked-v 9y ago
  So, effectively the same thing as a basic income guarantee?
  - danans 9y ago
    The end result is a basic income, but this is more about how that would be accomplished, and it ties the income to the wealth if the country. The income is drawn from a dividend on a kind of sovereign wealth fund which would be gradually capitalized with government assets, increased wealth and capital gains taxes, and possibly directly via the Fed (rather than the Fed capitalizing private banks). This is in contrast to other schemes that directly pay the UBI based on more progressive taxation. In the end it is still redistributive, but it redistributes capital downwards and not just income.
  - Epenthesis 9y ago
    Similar. It's the 401k employer contribution to UBI's defined benefit pension.
  - ebiester 9y ago
    https://en.wikipedia.org/wiki/Social_credit https://en.wikipedia.org/wiki/Social_credit Social credit is slightly different than minimum income in that social credit is tied to the wealth of the country rather than the cost of subsistence.
  - gozur88 9y ago
    It wouldn't be a guarantee of anything, just a citizenship-based ownership of a big mutual fund.
- ccachor 9y ago
  This sounds an awful like a privatized social security system (that everyone knows would be abused...)
  - frgtpsswrdlame 9y ago
    What do you mean? It sounds like it's completely public not private. How would it be abused?
    - dragonwriter 9y ago
      It's invested in private firms (SS is in government securities), and it's abusable insofar as it is possible for those making investment decisions to pursue personal or corrupt agendas rather than the public interest. Except for scale, it's not at all unique in this way, every fund where managers act as agents with other people's money has this as potential abuse vector, and while many operate tolerably well most of the time, abuses are a recurring thing.
weberc2 9y ago
"Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source [of money to initialize the fund]?" So wealth redistribution was the punchline after all.
- jkolyer 9y ago
  It always is. So predictable. "It wasn't true communism"
- mtpn 9y ago
  Inequality refers to unequal distribution of wealth so in fairness what could this article have been about, if not some suggested mechanism for distributing wealth differently?
  - weberc2 9y ago
    The issue is the specific mechanism for distribution--taking wealth from people. Another mechanism would be taking proceeds from natural resources, or improving education to enable a broader range of people to succeed in the market. My point isn't that these are better options, just that redistribution is not the only kind of distribution. My issue with this article is that it claims a fund mechanism makes the inequality problem simpler, but it is still subject to all of the same problems that plague the existing redistribution schemes.
    - mtpn 9y ago
      > taking wealth from people None of the ideas in the article truly boil down to this, except maybe some specific implementations of taxation. > redistribution is not the only kind of distribution. I’m trying to understand this, but I can’t.
holograham 9y ago
simple sure but let's talk about what it would take to give a meaningful dividend to all americans If we used a conservative 3.5% average return to give $1,000 USD for each American (~325M) you need nearly 10 Trillion dollars in this fund or over half of our yearly GDP. Now keeping in mind this would need to be generated from a tax on some good/service/capital which obviously has a cost component at it's base. Just getting the initial 10Trillion in a fund would be ridiculously hard. Now add to that the fact that 1k is a pittance and figuring out a true basic income -- this is wayyyy more complex. I'd like to point out a HUGE fallacy in this "simple" plan -- it only works in low population high natural capital resource areas. Alaska and Norway happen to be relatively remote/cold places with an abundance natural gas/oil. Norway's 1T dollar fund would be comical at US scale.
- frgtpsswrdlame 9y ago
  >I'd like to point out a HUGE fallacy in this "simple" plan -- it only works in low population high natural capital resource areas. Alaska and Norway happen to be relatively remote/cold places with an abundance natural gas/oil. Norway's 1T dollar fund would be comical at US scale. What makes natural resources different from capital such that these wealth funds work with natural resources but not capital?
  - mljoe 9y ago
    Probably something to do with the rent seeking problem. It’s wealth tied mostly to possessing rights to exploit valuable land, not to the labor or ingenuity of people.
    - holograham 9y ago
      this ^ Value is value -- for sure but Value derived from luck of the draw (e.g. Norway's current citizens banking on their ancestors settling in a land rich in oil). Frame it this way -- would Saudi Arabia be as wealthy as it is today without Oil? Do you think their social and political structure would have produced equivalent wealth as their oil companies?
- 9y ago
tabeth 9y ago
I've yet to see a diverse company with no inequality, let alone a diverse society. On that note, I wonder how feasible it would be to have a company who uses profit to fund an endowment and then later vows to only pay employees a percentage of the gains from said principal. That'd be neat (assuming you could find employees to agree to said payment method). Assuming the company has no shareholders, wouldn't it exist in perpetuity? If this works, perhaps a similar scheme could work to fix real life inequality -- force rich people to invest their money and give the gains to the poor. Rich people don't lose any money (other than the opportunity) and poor people thrive. Win win?
indubitable 9y ago
I agree in principle. Alaska's state fund has worked phenomenally well. But there's a problem -- coincidentally one Alaska has recently faced. A fund with meaningful returns would be measured, quite rapidly, in the trillions of dollars. That is an enormous incentive to 'borrow just a little from' to solve this issue or that issue. Alaska has been facing a multi billion dollar budget deficit as they recklessly spent during times of high oil prices -- ironically not dissimilar to the events that led to the initial creation of the fund. So what was their solution? The governor unilaterally slashed payments from the fund - a decision that was challenged and then upheld in the state courts. We can write all the sort of legalese we want to try to prevent this from happening, but I think the current state of society illustrates quite clearly that laws are subject to the views of those in power. For instance are the actions of the NSA and CIA the sort of government programs the founding fathers intended to allow when passing the 4th amendments? I doubt many would say yes, yet here we are. And I'm not even considering the inevitable graft involved in the management of such a monumental fund. Ultimately, I just do not think this sort of idea is possible in the US on a national level. State level initiatives are a very interesting idea, however.
- c0ur7n3y 9y ago
  Until campaign finance and lobbying reform occur, no other meaningful changes could be made. This might be a good step 2.
- SubiculumCode 9y ago
  There is definitely a difference between state budgets and federal budgets: fiat currency.
  - rhino369 9y ago
    Fiat currency gives you some leeway, but if you start trying to monetize your budget, you are risking run away inflation.
  - dragonwriter 9y ago
    Perhaps more immediately significant is virtually all states have constitutional requirements for short-term balance of operating budgets, and often strict constitutionsl rules on approval and use of debt financing, while the federal government has neither. Fist currency in principal allows monetizing budgets (either in general or debt specifically), but this is avoided in practice (and one reason for independent central banks is to provide confidence that political actors will not engage in monetization.)
fvdessen 9y ago
The inequality problem only exists if you look at absolute wealth numbers, and not the level of confort and opportunities that wealth affords. The amount and the quality of goods and service that is available to even the lower income bracket has never been better; most families can afford access to a car, a washing machine, food from around the world, unlimited entertainment, unlimited knowledge, air travel, telephone, etc. etc. Put another way, all the money in the world can't buy you a better phone than a 1000$ one, and that phone is only marginally better than a 100$ one, which everybody can afford. And that is how it works for most things nowadays. The reason people are so pissed about inequality, is that despite people having material and service equality like never before, social status remain extremely unequal. But that is human nature, and no amount of money redistribution can change it.
- ovulator 9y ago
  Money still buys power. And $1 Billion buys much more power than $1 Thousand. Maybe that is what you mean by "social status", but an very unequal distribution of power is not a good thing in a society through many's eyes.
- amalag 9y ago
  I agree with you and there are opportunities afforded to almost everyone. I think a few small tweaks are necessary, not these large wholescale proposals. One tweak is having a robust estate/death tax. That will create a more level playing field. People will complain about double taxation because their whole lives they are building a fortune for their children, but passing tens of millions of dollars to your grandchildren is not something we need to protect.
- zupatol 9y ago
  How about lack of debt, education, satisfying jobs and free time?
- figurehe4d 9y ago
  It's a mistake to make any sort of broad claims about human nature because we are products of our material conditions. Hierarchies may have been a part of our past, present and even near future, but I don't think they are an intrinsic aspect of what it means to be human, because if anything hierarchies increasingly give way to egalitarianism the more advanced we become.
ccachor 9y ago
Maybe a simple fix is to make the Federal Reserve aware of the problems they are creating.
- AnimalMuppet 9y ago
  Why do you think they are not aware? Note well: "If they were aware, they would fix it" is not a valid response. Fixing inequality is not a part of the Fed's mandate.
gozur88 9y ago
>Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source? This has never been done successfully in an economy not based on resource extraction without destroying the engine that produces that "enormous wealth". The whole thing is both well intentioned and incredibly naive.
- frgtpsswrdlame 9y ago
  >This has never been done successfully in an economy not based on resource extraction without destroying the engine that produces that "enormous wealth". So it's a good idea as long as we constrain it to our natural resources?
  - benji-york 9y ago
    Until those natural resources are exhausted or otherwise no longer valuable.
  - gozur88 9y ago
    Well, it's not a spectacularly bad idea under those conditions. But it's not like companies don't already pay for drilling, mining, and grazing rights on federal land. Right now the money doesn't go into a special fund, though, and in any case it's not much divided over 340 million people. Norway's sovereign wealth fund is significant because there just aren't that many Norwegians.
- AnimalMuppet 9y ago
  Yeah. Be very careful of the idea that it would be "fair" to take what flows into "other" pockets. It always turns out that there's not enough flowing into "other" pockets, and therefore that it becomes "fair" to take what's flowing into your pocket.
Y7ZCQtNo39 9y ago
The Social Security fund kind of sounds like what is described in the fourth paragraph.
gricardo99 9y ago
This sounds pretty much like what Sam Altman proposed the other day[1]. Posted on HN here: https://news.ycombinator.com/item?id=15789108 https://news.ycombinator.com/item?id=15789108 1 - http://blog.samaltman.com/american-equity http://blog.samaltman.com/american-equity
languagehacker 9y ago
If you enjoy Matt Bruenig's writing, check out the [People's Policy Project](https://peoplespolicyproject.org/ https://peoplespolicyproject.org/), which he heads. Matt's a fantastic writer in the space of social issues and economic policy.
guelo 9y ago
> Norway uses its fund not to directly pay out dividends but as a source of revenue for its famously generous welfare state. That wouldn't work in the good ol USA because the rich would use racisim and sexual panic to turn people against the welfare state and divert the money for more tax cuts for the rich. In this country the only bennefits that stick around are direct benefits that are mostly targeted at the upper middle class, such as the mortgage interest deduction or 529 college saving fund.
DoreenMichele 9y ago
Have they not heard of Adam Smith's The Wealth of Nations? * IIRC, prior to Smith's famous book, the wealth of nations was viewed in terms of gold kept in the coffers of the kings. This was increasingly a source of puzzlement because it was failing to explain why some nations were thriving and others were not. This seminal work has been credited with being single-handedly responsible for transforming our understanding of wealth as "gold in the king's coffer" to what we now refer to as GDP. Wealth of a nation is measured by its productivity, not the money in the bank. While I agree we need to do something about the current trend towards concentrating money in the hands of the few, clearly at the expense of the many, this is not the way to do it. This in no way protects the productivity that gives rise to these riches. In fact, it is likely to undermine said productivity. There is no limit to how much people can spend. If you just cut everyone a check, whether you call it Basic Income or American Equity, the money will get pissed away. It will not get invested in a better future. We have to find ways to address the underlying structural problems that are causing the 1 percent to effectively bleed the masses for more. We also must do so without creating perverse incentives. This is a case of "the cure they are recommending is worse than the disease." * https://en.m.wikipedia.org/wiki/The_Wealth_of_Nations https://en.m.wikipedia.org/wiki/The_Wealth_of_Nations
- shove 9y ago
  How is the 600 billion spent annually on the military anything of productive value that is in any way significantly different than it getting "pissed away"? It's offensive to suggest more of that money will get spent on entertainment (etc) than food, clothing, shelter, education, medical expenses (etc)
  - DoreenMichele 9y ago
    If we do away with the US military, we will promptly be invaded and taken over by someone else. The military allows the country to exist at all. The world is not full of live-and-let-live hippies who all love the US and its people. The military is also a source of medical training, new medical knowledge, various forms of stability, and research that helps create new products. I am advocating for people not being bled by the 1 percent to begin with. Charity never provides anyone a secure, comfortable life. It makes you their bitch and thus de facto undermines quality of life. I want people to have the money they deserve, but not by saying it is okay for the rich to first bleed us and then we will ask for some piddling check afterwards and kiss their butts and say "Thank you, massah." They outlawed slavery in the US. I would like it to really die and not come back from the grave with a new name.
shove 9y ago
"That would never work" protest citizens of country whose military spending surpasses that of the next eight countries combined.
cameldrv 9y ago
I think we already have this -- it's called Corporate taxes. Nominally 35% of all of the profits of every U.S. corporation are paid to the federal government. In practice after deductions it's about 20%. His analysis of where the money comes from amounts to either diverting money from the federal budget in one way or another, or increasing taxes. It seems to me that the real problems here are this: An increasing share of GDP is going to corporate profits, and away from wages, due to deunionization, globalization, immigration, and automation. Government policies are mostly responsible for the first three. This stagnation of wages has combined with the post war relentlessness of Madison ave, which programs us to increase our consumption, even though there is no new income to support it. The result is decreased savings and increased debt among the bottom 90%.
firstplacelast 9y ago
Rich people are only rich because poor people aren't willing to kill themselves in large numbers. The best thing any individual can do to reduce inequality is to only contribute to institutions that do not exacerbate inequality. Is the median wage at your company less than the wage required to buy the cheapest home within a 2 hour commute of your office? You're likely exacerbating inequality every single day. Are one or more people at the top of your company working on buying their next Ferrari or second/third home? You'renliklwy exacerbating inequality every day. If poor people were more willing to die than to contribute to the same companies and people that fuck them over and the middle class was more willing to work for themselves instead of contributing to greedy corporations all for a mediocre home, then we would have much more equal power structures in this country. Every single person in this country is responsible for the way it is. Being at the bottom isn't an excuse to fall in line and do exactly what your masters tell you everyday.
Namarysanghata 9y ago
I am no economics expert but I found this idea to be very promising. Moreover the concept of buying more stocks during a downturn could resolve the boom and bust cycle. Perhaps this national wealth fund could pay out this citizens dividend or ubi as a cryptocurrency?

42 points by untangle 9y ago

ng-user 9y ago

What if I told you there were no "Simple Fixes" for "Massive ____ Problems"

heimatau 9y ago
It's so simple...no one will do it. Lol.

cholmon 9y ago

FTA, "It’s called a social wealth fund, a pool of investment assets in some ways like the giant index or mutual funds already popular with retirement savings accounts or pension funds, but one owned collectively by society as a whole. One that paid dividends not to the few, or even just to the shrinking middle class lucky enough to have their savings invested, but to everyone."

crooked-v 9y ago
So, effectively the same thing as a basic income guarantee?
- danans 9y ago
  The end result is a basic income, but this is more about how that would be accomplished, and it ties the income to the wealth if the country. The income is drawn from a dividend on a kind of sovereign wealth fund which would be gradually capitalized with government assets, increased wealth and capital gains taxes, and possibly directly via the Fed (rather than the Fed capitalizing private banks). This is in contrast to other schemes that directly pay the UBI based on more progressive taxation. In the end it is still redistributive, but it redistributes capital downwards and not just income.
- Epenthesis 9y ago
  Similar. It's the 401k employer contribution to UBI's defined benefit pension.
- ebiester 9y ago
  https://en.wikipedia.org/wiki/Social_credit https://en.wikipedia.org/wiki/Social_credit Social credit is slightly different than minimum income in that social credit is tied to the wealth of the country rather than the cost of subsistence.
- gozur88 9y ago
  It wouldn't be a guarantee of anything, just a citizenship-based ownership of a big mutual fund.
ccachor 9y ago
This sounds an awful like a privatized social security system (that everyone knows would be abused...)
- frgtpsswrdlame 9y ago
  What do you mean? It sounds like it's completely public not private. How would it be abused?
  - dragonwriter 9y ago
    It's invested in private firms (SS is in government securities), and it's abusable insofar as it is possible for those making investment decisions to pursue personal or corrupt agendas rather than the public interest. Except for scale, it's not at all unique in this way, every fund where managers act as agents with other people's money has this as potential abuse vector, and while many operate tolerably well most of the time, abuses are a recurring thing.

weberc2 9y ago

"Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source [of money to initialize the fund]?" So wealth redistribution was the punchline after all.

jkolyer 9y ago
It always is. So predictable. "It wasn't true communism"
mtpn 9y ago
Inequality refers to unequal distribution of wealth so in fairness what could this article have been about, if not some suggested mechanism for distributing wealth differently?
- weberc2 9y ago
  The issue is the specific mechanism for distribution--taking wealth from people. Another mechanism would be taking proceeds from natural resources, or improving education to enable a broader range of people to succeed in the market. My point isn't that these are better options, just that redistribution is not the only kind of distribution. My issue with this article is that it claims a fund mechanism makes the inequality problem simpler, but it is still subject to all of the same problems that plague the existing redistribution schemes.
  - mtpn 9y ago
    > taking wealth from people None of the ideas in the article truly boil down to this, except maybe some specific implementations of taxation. > redistribution is not the only kind of distribution. I’m trying to understand this, but I can’t.

holograham 9y ago

simple sure but let's talk about what it would take to give a meaningful dividend to all americans If we used a conservative 3.5% average return to give $1,000 USD for each American (~325M) you need nearly 10 Trillion dollars in this fund or over half of our yearly GDP. Now keeping in mind this would need to be generated from a tax on some good/service/capital which obviously has a cost component at it's base. Just getting the initial 10Trillion in a fund would be ridiculously hard. Now add to that the fact that 1k is a pittance and figuring out a true basic income -- this is wayyyy more complex. I'd like to point out a HUGE fallacy in this "simple" plan -- it only works in low population high natural capital resource areas. Alaska and Norway happen to be relatively remote/cold places with an abundance natural gas/oil. Norway's 1T dollar fund would be comical at US scale.

frgtpsswrdlame 9y ago
>I'd like to point out a HUGE fallacy in this "simple" plan -- it only works in low population high natural capital resource areas. Alaska and Norway happen to be relatively remote/cold places with an abundance natural gas/oil. Norway's 1T dollar fund would be comical at US scale. What makes natural resources different from capital such that these wealth funds work with natural resources but not capital?
- mljoe 9y ago
  Probably something to do with the rent seeking problem. It’s wealth tied mostly to possessing rights to exploit valuable land, not to the labor or ingenuity of people.
  - holograham 9y ago
    this ^ Value is value -- for sure but Value derived from luck of the draw (e.g. Norway's current citizens banking on their ancestors settling in a land rich in oil). Frame it this way -- would Saudi Arabia be as wealthy as it is today without Oil? Do you think their social and political structure would have produced equivalent wealth as their oil companies?
9y ago

tabeth 9y ago

I've yet to see a diverse company with no inequality, let alone a diverse society. On that note, I wonder how feasible it would be to have a company who uses profit to fund an endowment and then later vows to only pay employees a percentage of the gains from said principal. That'd be neat (assuming you could find employees to agree to said payment method). Assuming the company has no shareholders, wouldn't it exist in perpetuity? If this works, perhaps a similar scheme could work to fix real life inequality -- force rich people to invest their money and give the gains to the poor. Rich people don't lose any money (other than the opportunity) and poor people thrive. Win win?

indubitable 9y ago

I agree in principle. Alaska's state fund has worked phenomenally well. But there's a problem -- coincidentally one Alaska has recently faced. A fund with meaningful returns would be measured, quite rapidly, in the trillions of dollars. That is an enormous incentive to 'borrow just a little from' to solve this issue or that issue. Alaska has been facing a multi billion dollar budget deficit as they recklessly spent during times of high oil prices -- ironically not dissimilar to the events that led to the initial creation of the fund. So what was their solution? The governor unilaterally slashed payments from the fund - a decision that was challenged and then upheld in the state courts. We can write all the sort of legalese we want to try to prevent this from happening, but I think the current state of society illustrates quite clearly that laws are subject to the views of those in power. For instance are the actions of the NSA and CIA the sort of government programs the founding fathers intended to allow when passing the 4th amendments? I doubt many would say yes, yet here we are. And I'm not even considering the inevitable graft involved in the management of such a monumental fund. Ultimately, I just do not think this sort of idea is possible in the US on a national level. State level initiatives are a very interesting idea, however.

c0ur7n3y 9y ago
Until campaign finance and lobbying reform occur, no other meaningful changes could be made. This might be a good step 2.
SubiculumCode 9y ago
There is definitely a difference between state budgets and federal budgets: fiat currency.
- rhino369 9y ago
  Fiat currency gives you some leeway, but if you start trying to monetize your budget, you are risking run away inflation.
- dragonwriter 9y ago
  Perhaps more immediately significant is virtually all states have constitutional requirements for short-term balance of operating budgets, and often strict constitutionsl rules on approval and use of debt financing, while the federal government has neither. Fist currency in principal allows monetizing budgets (either in general or debt specifically), but this is avoided in practice (and one reason for independent central banks is to provide confidence that political actors will not engage in monetization.)

fvdessen 9y ago

The inequality problem only exists if you look at absolute wealth numbers, and not the level of confort and opportunities that wealth affords. The amount and the quality of goods and service that is available to even the lower income bracket has never been better; most families can afford access to a car, a washing machine, food from around the world, unlimited entertainment, unlimited knowledge, air travel, telephone, etc. etc. Put another way, all the money in the world can't buy you a better phone than a 1000$ one, and that phone is only marginally better than a 100$ one, which everybody can afford. And that is how it works for most things nowadays. The reason people are so pissed about inequality, is that despite people having material and service equality like never before, social status remain extremely unequal. But that is human nature, and no amount of money redistribution can change it.

ovulator 9y ago
Money still buys power. And $1 Billion buys much more power than $1 Thousand. Maybe that is what you mean by "social status", but an very unequal distribution of power is not a good thing in a society through many's eyes.
amalag 9y ago
I agree with you and there are opportunities afforded to almost everyone. I think a few small tweaks are necessary, not these large wholescale proposals. One tweak is having a robust estate/death tax. That will create a more level playing field. People will complain about double taxation because their whole lives they are building a fortune for their children, but passing tens of millions of dollars to your grandchildren is not something we need to protect.
zupatol 9y ago
How about lack of debt, education, satisfying jobs and free time?
figurehe4d 9y ago
It's a mistake to make any sort of broad claims about human nature because we are products of our material conditions. Hierarchies may have been a part of our past, present and even near future, but I don't think they are an intrinsic aspect of what it means to be human, because if anything hierarchies increasingly give way to egalitarianism the more advanced we become.

ccachor 9y ago

Maybe a simple fix is to make the Federal Reserve aware of the problems they are creating.

AnimalMuppet 9y ago
Why do you think they are not aware? Note well: "If they were aware, they would fix it" is not a valid response. Fixing inequality is not a part of the Fed's mandate.

gozur88 9y ago

>Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source? This has never been done successfully in an economy not based on resource extraction without destroying the engine that produces that "enormous wealth". The whole thing is both well intentioned and incredibly naive.

frgtpsswrdlame 9y ago
>This has never been done successfully in an economy not based on resource extraction without destroying the engine that produces that "enormous wealth". So it's a good idea as long as we constrain it to our natural resources?
- benji-york 9y ago
  Until those natural resources are exhausted or otherwise no longer valuable.
- gozur88 9y ago
  Well, it's not a spectacularly bad idea under those conditions. But it's not like companies don't already pay for drilling, mining, and grazing rights on federal land. Right now the money doesn't go into a special fund, though, and in any case it's not much divided over 340 million people. Norway's sovereign wealth fund is significant because there just aren't that many Norwegians.
AnimalMuppet 9y ago
Yeah. Be very careful of the idea that it would be "fair" to take what flows into "other" pockets. It always turns out that there's not enough flowing into "other" pockets, and therefore that it becomes "fair" to take what's flowing into your pocket.

Y7ZCQtNo39 9y ago

The Social Security fund kind of sounds like what is described in the fourth paragraph.

gricardo99 9y ago

This sounds pretty much like what Sam Altman proposed the other day[1]. Posted on HN here: https://news.ycombinator.com/item?id=15789108 https://news.ycombinator.com/item?id=15789108 1 - http://blog.samaltman.com/american-equity http://blog.samaltman.com/american-equity

languagehacker 9y ago

If you enjoy Matt Bruenig's writing, check out the [People's Policy Project](https://peoplespolicyproject.org/ https://peoplespolicyproject.org/), which he heads. Matt's a fantastic writer in the space of social issues and economic policy.

guelo 9y ago

> Norway uses its fund not to directly pay out dividends but as a source of revenue for its famously generous welfare state. That wouldn't work in the good ol USA because the rich would use racisim and sexual panic to turn people against the welfare state and divert the money for more tax cuts for the rich. In this country the only bennefits that stick around are direct benefits that are mostly targeted at the upper middle class, such as the mortgage interest deduction or 529 college saving fund.

DoreenMichele 9y ago

Have they not heard of Adam Smith's The Wealth of Nations? * IIRC, prior to Smith's famous book, the wealth of nations was viewed in terms of gold kept in the coffers of the kings. This was increasingly a source of puzzlement because it was failing to explain why some nations were thriving and others were not. This seminal work has been credited with being single-handedly responsible for transforming our understanding of wealth as "gold in the king's coffer" to what we now refer to as GDP. Wealth of a nation is measured by its productivity, not the money in the bank. While I agree we need to do something about the current trend towards concentrating money in the hands of the few, clearly at the expense of the many, this is not the way to do it. This in no way protects the productivity that gives rise to these riches. In fact, it is likely to undermine said productivity. There is no limit to how much people can spend. If you just cut everyone a check, whether you call it Basic Income or American Equity, the money will get pissed away. It will not get invested in a better future. We have to find ways to address the underlying structural problems that are causing the 1 percent to effectively bleed the masses for more. We also must do so without creating perverse incentives. This is a case of "the cure they are recommending is worse than the disease." * https://en.m.wikipedia.org/wiki/The_Wealth_of_Nations https://en.m.wikipedia.org/wiki/The_Wealth_of_Nations

shove 9y ago
How is the 600 billion spent annually on the military anything of productive value that is in any way significantly different than it getting "pissed away"? It's offensive to suggest more of that money will get spent on entertainment (etc) than food, clothing, shelter, education, medical expenses (etc)
- DoreenMichele 9y ago
  If we do away with the US military, we will promptly be invaded and taken over by someone else. The military allows the country to exist at all. The world is not full of live-and-let-live hippies who all love the US and its people. The military is also a source of medical training, new medical knowledge, various forms of stability, and research that helps create new products. I am advocating for people not being bled by the 1 percent to begin with. Charity never provides anyone a secure, comfortable life. It makes you their bitch and thus de facto undermines quality of life. I want people to have the money they deserve, but not by saying it is okay for the rich to first bleed us and then we will ask for some piddling check afterwards and kiss their butts and say "Thank you, massah." They outlawed slavery in the US. I would like it to really die and not come back from the grave with a new name.

shove 9y ago

"That would never work" protest citizens of country whose military spending surpasses that of the next eight countries combined.

cameldrv 9y ago

I think we already have this -- it's called Corporate taxes. Nominally 35% of all of the profits of every U.S. corporation are paid to the federal government. In practice after deductions it's about 20%. His analysis of where the money comes from amounts to either diverting money from the federal budget in one way or another, or increasing taxes. It seems to me that the real problems here are this: An increasing share of GDP is going to corporate profits, and away from wages, due to deunionization, globalization, immigration, and automation. Government policies are mostly responsible for the first three. This stagnation of wages has combined with the post war relentlessness of Madison ave, which programs us to increase our consumption, even though there is no new income to support it. The result is decreased savings and increased debt among the bottom 90%.

firstplacelast 9y ago

Rich people are only rich because poor people aren't willing to kill themselves in large numbers. The best thing any individual can do to reduce inequality is to only contribute to institutions that do not exacerbate inequality. Is the median wage at your company less than the wage required to buy the cheapest home within a 2 hour commute of your office? You're likely exacerbating inequality every single day. Are one or more people at the top of your company working on buying their next Ferrari or second/third home? You'renliklwy exacerbating inequality every day. If poor people were more willing to die than to contribute to the same companies and people that fuck them over and the middle class was more willing to work for themselves instead of contributing to greedy corporations all for a mediocre home, then we would have much more equal power structures in this country. Every single person in this country is responsible for the way it is. Being at the bottom isn't an excuse to fall in line and do exactly what your masters tell you everyday.

Namarysanghata 9y ago

I am no economics expert but I found this idea to be very promising. Moreover the concept of buying more stocks during a downturn could resolve the boom and bust cycle. Perhaps this national wealth fund could pay out this citizens dividend or ubi as a cryptocurrency?