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Unleashing a lot of money is like a big dose of sugar for the economy. It causes a boom and then a bust. A UBI is just a constant redirection of resources from

by javert 7y ago

Unleashing a lot of money is like a big dose of sugar for the economy. It causes a boom and then a bust. A UBI is just a constant redirection of resources from investment/production/research to consumption. There is no magic you can do with the money supply. It's like the law of conservation of energy. Maybe in the best case you can smooth out the natural business cycle by contracting the money supply when the economy is growing and expanding it when the economy is shrinking. That is what modern central banks try to do. But good luck making it work right. At this point particular point in history there is no more room to expand the money supply, yet the economy is heading towards recession.

EGreg 7y ago
Although that may be standard thinking in some circles, in reality there are clearly areas where more money would lead to far more goods and services, making everyone in the area richer. Building up a community like Angola is one example. Any area where people are unemployed and could use their time more productively is another example. Even John Maynard Keynes famously said this. The trick is to find out where to invest for the next high-growth thing, and the government can make a big difference. Past examples included: Interstate Highway System Microwave Research + Silicon Valley GPS and Moonshots ARPAnet and other DARPA projects Now it's going to be solar, battery, seaweed for cows and other sustainable energy practices. Printing money and using it to build up infrastructure isn't necessarily bad. Another approach to looking at this is MMT, though I disagree with some of their conclusions.
- javert 7y ago
  > Although that may be standard thinking in some circles, in reality there are clearly areas where more money would lead to far more goods and services, making everyone in the area richer. Finance exists to do this. If it's a good investment, compared to the alternatives, money will be routed to it (and away from alternatives). Your government spending examples are examples where the government made "good" decisions, but it's equivalent to cherry-picking. For example, the U.S. government spends more on healthcare per capita than any other country, yet our healthcare is worse than most countries, AND patients still get bankrupted. The U.S. government indirectly financed the higher education bubble that has allowed college administrators to make out like bandits, AND students are still in massive debt. Government spending is an inherently vicious process because it overrides individuals' own economic judgement about how to deploy their resources and replaces it with authoritarian central "planning." Also, most of your examples (maybe all) are defense projects. I think defense is a legitimate part of the government and the DoD can make pretty good judgement calls when they have a reasonable and limited amount of funding. But should they have gotten trillions to punish Iraq and Afghanistan for something done by the Saudis? No. We can see government spending in the U.S. becoming increasingly more catastrophic and wasteful over time because that is the nature of an inherently vicious process.
  - EGreg 7y ago
    Your own examples are just arguments in favor of government spending. Take for example your claim “the US government spends more on healthcare per capita hhan any other country, yet our heathcare is worse than most countries” The data is clear - single payer systems achieve lower prices thanks to having MONOPSONY POWER over the market. Providers compete, regular consumers don’t, for basic services. Instead resources are prioritized by urgent need. Almost All the systems ahead of US in quality and outcomes in the Commonwealth Fund list are single payer systems. If the US government had a single payer system, it would do well. All around the world we have seen that governments can cover EVERYONE and do it CHEAPER if they have a single payer system, thanks to their massive MONOPSONY power. As for education: I am not talking about government run schools, but if we had vouchers (a single payer system) then private schools would compete for those dollars and once again it would pop up in areas where they are needed (eg next to a failing school). I am not in favor of FREE COLLEGE being funded by government but I am massively in favor of FREE EDUCATION which can mean MOOCs, coding schools, apprenticeships acting workshops and much much more. The idea that an inherently wasteful “four year cruise” should be subsidized by money meant for EDUCATION, or that we need to lock up great teachers in lecture halls to only reach 300 people while another 30 are reached by crappy teachers is ridiculous. I am not saying government should dictate what FORM the education would take, just provide people with vouchers or UBI to make their own decisions. But my original point was that the FEDERAL government being the only one who can issue currency is actually pretty limiting. Look at how well the PIIGS countries did in the south of europe after joining the Euro and giving up the power of running their own monetary policy. When Greece had the Drachma they did way better. Similarly Detroit wouldn’t have gone bankrupt if it could issue its own currency like Bristol and Brighton in England. There are tons of examples. Venezuela is a great example of government mismanaging the currency and people needing an alternative. And in fact, during the Weimar republic’s hyperinflation, there were pockets of private currencies the did very well and HELPED PEOPLE until they were OUTLAWED by the stupid principle of enforcing sanctions by the French after the treaty of Versailles. Who knows that alone could have averted WW2 and the Nazis rise to power in an impoverished Germany. And then of course in peacetime this is THE DEFAULT. In the free banking era before the greenback, most everyday money was banknotes circulating issued by various individual banks not the “official sanctioned by the Federal Government banks” And now we have cryptocurrencies AND social networks payment systems increasingly competing with banks. Also, I don’t just talk, I put my $ where my mouth is and build what I believe: https://intercoin.org https://intercoin.org
dv_dt 7y ago
By experience a lot of money all at once causes a boom and bust, but we can take a step back and think how much should we release at once, what combination of entities should be deciding to do the release, and while our system is currently girded against releasing too much, we may be actually suffering from systematically releasing too little money right now.

by javert 7y ago

EGreg 7y ago

Although that may be standard thinking in some circles, in reality there are clearly areas where more money would lead to far more goods and services, making everyone in the area richer. Building up a community like Angola is one example. Any area where people are unemployed and could use their time more productively is another example. Even John Maynard Keynes famously said this. The trick is to find out where to invest for the next high-growth thing, and the government can make a big difference. Past examples included: Interstate Highway System Microwave Research + Silicon Valley GPS and Moonshots ARPAnet and other DARPA projects Now it's going to be solar, battery, seaweed for cows and other sustainable energy practices. Printing money and using it to build up infrastructure isn't necessarily bad. Another approach to looking at this is MMT, though I disagree with some of their conclusions.

javert 7y ago
> Although that may be standard thinking in some circles, in reality there are clearly areas where more money would lead to far more goods and services, making everyone in the area richer. Finance exists to do this. If it's a good investment, compared to the alternatives, money will be routed to it (and away from alternatives). Your government spending examples are examples where the government made "good" decisions, but it's equivalent to cherry-picking. For example, the U.S. government spends more on healthcare per capita than any other country, yet our healthcare is worse than most countries, AND patients still get bankrupted. The U.S. government indirectly financed the higher education bubble that has allowed college administrators to make out like bandits, AND students are still in massive debt. Government spending is an inherently vicious process because it overrides individuals' own economic judgement about how to deploy their resources and replaces it with authoritarian central "planning." Also, most of your examples (maybe all) are defense projects. I think defense is a legitimate part of the government and the DoD can make pretty good judgement calls when they have a reasonable and limited amount of funding. But should they have gotten trillions to punish Iraq and Afghanistan for something done by the Saudis? No. We can see government spending in the U.S. becoming increasingly more catastrophic and wasteful over time because that is the nature of an inherently vicious process.
- EGreg 7y ago
  Your own examples are just arguments in favor of government spending. Take for example your claim “the US government spends more on healthcare per capita hhan any other country, yet our heathcare is worse than most countries” The data is clear - single payer systems achieve lower prices thanks to having MONOPSONY POWER over the market. Providers compete, regular consumers don’t, for basic services. Instead resources are prioritized by urgent need. Almost All the systems ahead of US in quality and outcomes in the Commonwealth Fund list are single payer systems. If the US government had a single payer system, it would do well. All around the world we have seen that governments can cover EVERYONE and do it CHEAPER if they have a single payer system, thanks to their massive MONOPSONY power. As for education: I am not talking about government run schools, but if we had vouchers (a single payer system) then private schools would compete for those dollars and once again it would pop up in areas where they are needed (eg next to a failing school). I am not in favor of FREE COLLEGE being funded by government but I am massively in favor of FREE EDUCATION which can mean MOOCs, coding schools, apprenticeships acting workshops and much much more. The idea that an inherently wasteful “four year cruise” should be subsidized by money meant for EDUCATION, or that we need to lock up great teachers in lecture halls to only reach 300 people while another 30 are reached by crappy teachers is ridiculous. I am not saying government should dictate what FORM the education would take, just provide people with vouchers or UBI to make their own decisions. But my original point was that the FEDERAL government being the only one who can issue currency is actually pretty limiting. Look at how well the PIIGS countries did in the south of europe after joining the Euro and giving up the power of running their own monetary policy. When Greece had the Drachma they did way better. Similarly Detroit wouldn’t have gone bankrupt if it could issue its own currency like Bristol and Brighton in England. There are tons of examples. Venezuela is a great example of government mismanaging the currency and people needing an alternative. And in fact, during the Weimar republic’s hyperinflation, there were pockets of private currencies the did very well and HELPED PEOPLE until they were OUTLAWED by the stupid principle of enforcing sanctions by the French after the treaty of Versailles. Who knows that alone could have averted WW2 and the Nazis rise to power in an impoverished Germany. And then of course in peacetime this is THE DEFAULT. In the free banking era before the greenback, most everyday money was banknotes circulating issued by various individual banks not the “official sanctioned by the Federal Government banks” And now we have cryptocurrencies AND social networks payment systems increasingly competing with banks. Also, I don’t just talk, I put my $ where my mouth is and build what I believe: https://intercoin.org https://intercoin.org

dv_dt 7y ago

By experience a lot of money all at once causes a boom and bust, but we can take a step back and think how much should we release at once, what combination of entities should be deciding to do the release, and while our system is currently girded against releasing too much, we may be actually suffering from systematically releasing too little money right now.