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It makes the circulation temporarily better. The concentrations of income and the concentrations of people should be geographically coincident. If you look at
by logfromblammo 7y ago
It makes the circulation temporarily better. The concentrations of income and the concentrations of people should be geographically coincident. If you look at poor neighborhoods and rich neighborhoods very closely, you will see all the little pumps operating that move money from one to the other. The apartment building residents live here, but they send their rent checks over there. They consume water, electricity, and telecoms here, but send their utility checks over there. The socialize here, but then send licensing and royalties over there. When they need to find extra cash, it isn't here; it's all gone over there. And they can't get over there, because there's an admission fee at the gate, and guest fees for every hour they stay, that the members don't have to pay.
The reason the people that UBI would help most don't have additional productive capacity to improve their own lives is not because they are lazy or unfit, but because they are already attached to a system to siphon off their excess and shunt it elsewhere, whose capacity is currently limited by the amount of excess there is.
You can't pump enough money into UBI to overwhelm the system. So if you create an artificial excess by cutting $1000 checks to people, the siphon can just be dialed up from 2 to 3, and that excess gets (mostly) drained, too. If you start sending $100000 checks to people, that's probably more than the existing systems can drain away, but it's also more than the government revenue system can generate without annihilating the regular economy.
In order to solve the problem that UBI seems to want to solve, you have to disconnect people from the siphoning machines. That means owning the homes they live in, owning the tools they use, owning the businesses that use their labor, owning the culture they live in, and owning the infrastructure.
No matter how much money you put in a UBI check, if someone pays rent on their home, pays utility bills to private companies, shops at businesses that don't spend where they earn their money, and lives under a government that does not respect their interests, they will have just as much trouble saving or investing that extra cash as they had with the paychecks from their job(s).
Instead of dropping all that UBI cash from helicopters, use it to build or renovate houses that are sold at 10% over cost, regardless of what the market will bear. Use it to create municipal-owned utilities wherever private utilities are the only option. Use it to build municipal-owned health care facilities. Use it to build municipal-owned community colleges that can grant bachelor's degrees in at least one locally-relevant discipline, or grant educational credit that is transferable to any other college. Use it to keep public libraries, public radio, and public television operating. Use it to build separate passenger rail and cargo rail links to the nearest big city. Use it to promote small, locally-owned businesses in the community. Use it to smash political corruption in local government. Use it to pry all the money-draining machines off of the people that want to invest in themselves and their neighbors, instead of being human resources to be mined dry and then discarded. If more money stays in the community, the opportunities to earn money will stay in the community, and there will be less need to inject money back in via tax-funded government spending.
You don't need to go Marxist and seize the means of production. You just have to dismantle the mechanisms that automatically siphon off excess production and send it off to someone else. Hammer away the props that hold up the rentiers, and make the easiest path to great wealth to be providing great value to society--by seeking out win-win propositions, rather than playing a zero-sum game. Fewer people get rich, but more can climb up out of poverty, and more can be middle-class with reasonable working hours and retire with enough to maintain their previous lifestyle.
You will not see this proposed by any politician in 2019, because implementing it would be exceedingly difficult, and require a sharp political focus, that has not existed in the US since 1968. It is far easier to promise that checks in your mailbox every month will make it all better.
- dragonwriter 7y ago> You can't pump enough money into UBI to overwhelm the system. You aren't trying to, UBI isn’t an exogenous money flow into the bottom, it's a siphon that reverses the direction of the one you describe from poor to rich—you fund UBI with taxes on the wealthy (e.g., increased high-end income taxes, taxing capital as income) and tie the UBI level to the revenue from those taxes (with a bit of reserve so that you smooth out short-term revenue/population drops) > So if you create an artificial excess by cutting $1000 checks to people, the siphon can just be dialed up from 2 to 3 Which just pumps more money into UBI, if it's funded as I suggest.
- logfromblammo 7y agoAnd then the siphons ramp up from 3 to 4. Which pumps more money into UBI. So the rentiers raise the rent again. Which pumps more money into UBI. Now the rentiers are in a game of Chicken with the Fed, with respect to hyperinflation. Their owned property has about the same value no matter what dollars are worth, so it is a game of Chicken with one person in a bespoke killdozer with front-impact armor, and the other player in an AMC Pacer with a floppy purple protuberance duct-taped to the hood--the owner-rentiers will win every time. You can't beat the rentiers by taking their cash. You have to undermine the value of their ownership, by taking away the pricing power of their monopolies and oligopolies.
- dragonwriter 7y ago> Now the rentiers are in a game of Chicken with the Fed, with respect to hyperinflation. No, they aren't. Because the money supply isn't increasing because of UBI (which is redistribution, not extra supply), and “the rentiers” aren't the whole basket of goods that determined inflation. If they are sucking up more money, there is less money chasing every good that's sold in a competitive market, and those prices are falling. Also, at some point.the rentiers run into limits set by existing policies, or policies that their outrageous behavior provokes. E.g., the most major component of the rent-seeking siphon is the thing that inspired the broad economic term “rent”, that is, real-estate (specifically housing) rental, which already is often subject to limits on increases in many major urban markets (and, potentially as of next year, under a bill with the backing of leadership of both state houses and the governor, statewide in California.) Your thesis that it is necessary to attack the siphon by means outside of UBI is not entirely incorrect, but your suggestion that there is no political will to do that in the USA now (and further that there would be no greater will were rentiers try to counteract redistribution in the manner you suggest) does not seem consistent with the experience, which shows some mechanisms of the siphon you identify already subject to policy restrictions, and those restrictions likely to be escalated where the impacts of those siphons are most pronounced.