5 ms·

> Direct, debt free issuance of a citizens dividend to every US citizen. Coupled with a wind-down of the debt bubble. There are three ways to make it possible:

by xyzzyz 7y ago

> Direct, debt free issuance of a citizens dividend to every US citizen. Coupled with a wind-down of the debt bubble. There are three ways to make it possible: 1) issue government debt to pay for it 2) increase taxes to cover it 3) print money to cover it. Number 3) will cause significant inflation, so it will effectively be paid for by tax on cash savings. High inflation is really bad, it’s a terrible idea. 1) has the problem of only working temporarily: you cannot indebt yourself indefinitely, at some point the service payments will become simply untenable. 2) is the only one practical, but the only way to make it work in practice is to increase taxes all across the population. In result, this will be $1000 monthly only for the very poor. For people around the median, this will balance out to zero or negative. So, the only way this destroys debt bubble is by 1), inflation destroying cash debt. This is terrible: businesses will not have access to debt to finance operations, mortgages will not be accessible for people without significant savings to buy houses, etc. All around, a terrible idea.

whack 7y ago
The fed's job is literally to control the money supply, which includes expanding it at certain times. Currently they are doing it through various transactions and loans conducted with other banks. The proposal is to simply give cash to citizens instead. Saying that this will lead to inflation is moot - this proposal will only take effect when inflation is explicitly desired. https://www.investopedia.com/articles/08/fight-recession.asp https://www.investopedia.com/articles/08/fight-recession.asp
toomuchtodo 7y ago
> There are three ways to make it possible: 1) issue government debt to pay for it 2) increase taxes to cover it 3) print money to cover it. There is another way to do it without issuing debt, but while still controlling monetary policy. 1. Provision "dividend.federalreserve.gov" CRUD app (or just dividend.gov for convenience). Create "Fed" accounts, very similar to what you get with a Social Security Administration account at https://ssa.gov https://ssa.gov. Accept routing and account numbers from citizens. Issue debit cards with no fees to the unbanked. Provide local service at Social Security offices. 2. The Fed slowly buys up income producing assets (equities, fixed income, etc), and distributes the gains monthly to everyone. Many central banks go on buying binges to support asset prices already (the Bank of Japan already owns a significant amount of the Nikkei [1]). You will eventually arrive at a UBI supported by the economic productivity of your country. Alaska does something smaller with oil revenue already [2]. This also keeps with Fed mandates to maximize employment and keep inflation around their 2% target (inflation will never increase because of structural demographics, the shift to a service economy, the transition to EVs and renewables, etc). [1] https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be-top-shareholder-of-Japan-stocks https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be... [2] https://en.wikipedia.org/wiki/Alaska_Permanent_Fund https://en.wikipedia.org/wiki/Alaska_Permanent_Fund
aeternum 7y ago
QE already is #3. The Fed is printing money to purchase bonds/treasures/bad mortgages. The printing of money definitely needs to be balanced in order to stabilize inflation, but the fed is doing that. The only difference would be that instead of the Fed injecting the printed money through financial instrument purchases which benefit the top 5%, they would provide it to all citizens as a UBI.
- xyzzyz 7y ago
  Another difference would be that QE, as practiced by Fed in 2008-2014, would pay a basic income of around $150/month. Now, consider what inflationary impact would QE have if it was 6 times larger, and perpetuated indefinitely. Then remember that because of the way QE was structured, it had much smaller inflationary impact than directly printing that money and handing it over to government or people. While I'd like for it to be possible to pull $12k/year for every American out of thin air, there's simply no way.
  - aeternum 7y ago
    QE likely had a smaller inflationary impact simply because the printed money went only towards treasuries and financial instruments disproportionately benefiting the rich (top 5%). There's a strong argument that this is why it didn't show up in the consumer price index and we've also significantly increased wealth inequality. 12k / year for every american is likely too high. I think the Fed should still determine the amount of QE based on inflation and economic metrics, however that QE should be distributed via a UBI rather than used to purchase financial instruments.
    - xyzzyz 7y ago
      > I think the Fed should still determine the amount of QE based on inflation and economic metrics, however that QE should be distributed via a UBI rather than used to purchase financial instruments. But why go the roundabout way of going through QE to pay for UBI? Why not just increase taxes directly? The answer is, clearly, because once you talk about increasing taxes to pay for something, you start thinking hard about numbers, and having them add up. When you talk about some vague ideas like the above, calculating the impact exactly becomes difficult, so instead one can just throw up their hands in the air and ignore the problem altogether. The impact however stays very real, as real as when you pay for it through taxation.
EastLondonCoder 7y ago
I agree that high inflation is really bad, but during the last decade there has been several rounds of QE without causing particularly high inflation. The recent QE package from the FED is about 2000USD per person in the US, perhaps some of it could be dished out as a helicopter drop instead.
BoiledCabbage 7y ago
You act like these are wild approaches. But during this this current term we've already done #1 via the 1Trillion tax cuts to mostly the wealthy. Those (many of us on here) who won't use it for goods and services, but instead to further prop up your asset bubble of choice. Ie not improve the economy much, but make the appearance of improvement via higher asset pricess. Then we've done #3 via re-introducing QE via the fed. Both back in September, and again last week, and why yet again just 30 mins ago. While we call them short term loans, they still haven't been paid back since the start of the GFC. And not only have we continued printing more via the Fed, when the fed finally tried to get some companies to pay them back a year ago the repo market siezed up last fall. The fact that there was a flood of Treasury Securities on the market to pay for item #1 (it increased supply by 50%) likely had a lot to do with it. If you want the economy to function, then get money in the people who will spend it. What's the factor? For lower incomes every extra dollar they have, introduces 1.5x or 2x or something into the economy. And for every dollar given to middle-high and high incomes only 0.4x or less actually goes into the economy. Propping up assets isn't a functioning economy.
- xyzzyz 7y ago
  > You act like these are wild approaches. But during this this current term we've already done #1 via the 1Trillion tax cuts to mostly the wealthy. $4T a year, required to pay for monthly basic income of $1k to all Americans is much wilder than $1T of tax not collected over 10 years, yes. The former number is 40 times larger than the latter. > Then we've done #3 via re-introducing QE via the fed. No, we've done only small part of 3) via QE. QE over its history had bought around $4T of assets, which is a far cry from what's required to pay every American $12k/year. QE also doesn't directly "print money", and so Fed buying $4T of assets has much smaller inflationary impact than actually printing $4T and giving it to the government or people. What I want is for people to be honest about how much basic income actually costs, and where will that money actually come from. Quite simply, you cannot double federal government spending overnight by some clever accounting trick or increasing taxes on "the wealthy": there aren't nearly enough wealthy people to cover that.
  - BoiledCabbage 7y ago
vearwhershuh 7y ago
Number 3 will not create inflation. Not in all cases and not in our current environment. That is a myth pushed by the banks in order to keep the current system in place. Debt spends the same as money. We have already had the inflation, paid for with debt. Now the debt system is becoming unstable and will lead to deflation unless we put non-debt spending power in the average persons hands. Read Keen's site, he explains the situation: http://www.debtdeflation.com/blogs/manifesto/ http://www.debtdeflation.com/blogs/manifesto/ Most economists view debt as a wash. "We owe it to ourselves." But, at Keen demonstrates, that isn't the case. We need a debt jubilee if we want the economy to function properly again, and he, alone and mocked by any mainstream economist who actually paid attention to him, came up with a modern, fair way to do it.
throw0101a 7y ago
> ... 3) print money to cover it. > Number 3) will cause significant inflation, so it will effectively be paid for by tax on cash savings. Yeah, the same was said before QE was rolled about and it did not happen--as predicted Krugman and those that follow IS-LM models: * https://krugman.blogs.nytimes.com/2015/02/12/qe-truthers/ https://krugman.blogs.nytimes.com/2015/02/12/qe-truthers/ * https://en.wikipedia.org/wiki/Zero_lower_bound https://en.wikipedia.org/wiki/Zero_lower_bound Stimulus now could be very useful, and 'helicopter money' is probably just as good as any other method: * https://www.nytimes.com/2020/03/07/opinion/the-case-for-permanent-stimulus-wonkish.html https://www.nytimes.com/2020/03/07/opinion/the-case-for-perm... * https://archive.is/Z2TMK https://archive.is/Z2TMK

by xyzzyz 7y ago

whack 7y ago

The fed's job is literally to control the money supply, which includes expanding it at certain times. Currently they are doing it through various transactions and loans conducted with other banks. The proposal is to simply give cash to citizens instead. Saying that this will lead to inflation is moot - this proposal will only take effect when inflation is explicitly desired. https://www.investopedia.com/articles/08/fight-recession.asp https://www.investopedia.com/articles/08/fight-recession.asp

toomuchtodo 7y ago

> There are three ways to make it possible: 1) issue government debt to pay for it 2) increase taxes to cover it 3) print money to cover it. There is another way to do it without issuing debt, but while still controlling monetary policy. 1. Provision "dividend.federalreserve.gov" CRUD app (or just dividend.gov for convenience). Create "Fed" accounts, very similar to what you get with a Social Security Administration account at https://ssa.gov https://ssa.gov. Accept routing and account numbers from citizens. Issue debit cards with no fees to the unbanked. Provide local service at Social Security offices. 2. The Fed slowly buys up income producing assets (equities, fixed income, etc), and distributes the gains monthly to everyone. Many central banks go on buying binges to support asset prices already (the Bank of Japan already owns a significant amount of the Nikkei [1]). You will eventually arrive at a UBI supported by the economic productivity of your country. Alaska does something smaller with oil revenue already [2]. This also keeps with Fed mandates to maximize employment and keep inflation around their 2% target (inflation will never increase because of structural demographics, the shift to a service economy, the transition to EVs and renewables, etc). [1] https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be-top-shareholder-of-Japan-stocks https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be... [2] https://en.wikipedia.org/wiki/Alaska_Permanent_Fund https://en.wikipedia.org/wiki/Alaska_Permanent_Fund

aeternum 7y ago

QE already is #3. The Fed is printing money to purchase bonds/treasures/bad mortgages. The printing of money definitely needs to be balanced in order to stabilize inflation, but the fed is doing that. The only difference would be that instead of the Fed injecting the printed money through financial instrument purchases which benefit the top 5%, they would provide it to all citizens as a UBI.

xyzzyz 7y ago
Another difference would be that QE, as practiced by Fed in 2008-2014, would pay a basic income of around $150/month. Now, consider what inflationary impact would QE have if it was 6 times larger, and perpetuated indefinitely. Then remember that because of the way QE was structured, it had much smaller inflationary impact than directly printing that money and handing it over to government or people. While I'd like for it to be possible to pull $12k/year for every American out of thin air, there's simply no way.
- aeternum 7y ago
  QE likely had a smaller inflationary impact simply because the printed money went only towards treasuries and financial instruments disproportionately benefiting the rich (top 5%). There's a strong argument that this is why it didn't show up in the consumer price index and we've also significantly increased wealth inequality. 12k / year for every american is likely too high. I think the Fed should still determine the amount of QE based on inflation and economic metrics, however that QE should be distributed via a UBI rather than used to purchase financial instruments.
  - xyzzyz 7y ago
    > I think the Fed should still determine the amount of QE based on inflation and economic metrics, however that QE should be distributed via a UBI rather than used to purchase financial instruments. But why go the roundabout way of going through QE to pay for UBI? Why not just increase taxes directly? The answer is, clearly, because once you talk about increasing taxes to pay for something, you start thinking hard about numbers, and having them add up. When you talk about some vague ideas like the above, calculating the impact exactly becomes difficult, so instead one can just throw up their hands in the air and ignore the problem altogether. The impact however stays very real, as real as when you pay for it through taxation.

EastLondonCoder 7y ago

I agree that high inflation is really bad, but during the last decade there has been several rounds of QE without causing particularly high inflation. The recent QE package from the FED is about 2000USD per person in the US, perhaps some of it could be dished out as a helicopter drop instead.

BoiledCabbage 7y ago

You act like these are wild approaches. But during this this current term we've already done #1 via the 1Trillion tax cuts to mostly the wealthy. Those (many of us on here) who won't use it for goods and services, but instead to further prop up your asset bubble of choice. Ie not improve the economy much, but make the appearance of improvement via higher asset pricess. Then we've done #3 via re-introducing QE via the fed. Both back in September, and again last week, and why yet again just 30 mins ago. While we call them short term loans, they still haven't been paid back since the start of the GFC. And not only have we continued printing more via the Fed, when the fed finally tried to get some companies to pay them back a year ago the repo market siezed up last fall. The fact that there was a flood of Treasury Securities on the market to pay for item #1 (it increased supply by 50%) likely had a lot to do with it. If you want the economy to function, then get money in the people who will spend it. What's the factor? For lower incomes every extra dollar they have, introduces 1.5x or 2x or something into the economy. And for every dollar given to middle-high and high incomes only 0.4x or less actually goes into the economy. Propping up assets isn't a functioning economy.

xyzzyz 7y ago
> You act like these are wild approaches. But during this this current term we've already done #1 via the 1Trillion tax cuts to mostly the wealthy. $4T a year, required to pay for monthly basic income of $1k to all Americans is much wilder than $1T of tax not collected over 10 years, yes. The former number is 40 times larger than the latter. > Then we've done #3 via re-introducing QE via the fed. No, we've done only small part of 3) via QE. QE over its history had bought around $4T of assets, which is a far cry from what's required to pay every American $12k/year. QE also doesn't directly "print money", and so Fed buying $4T of assets has much smaller inflationary impact than actually printing $4T and giving it to the government or people. What I want is for people to be honest about how much basic income actually costs, and where will that money actually come from. Quite simply, you cannot double federal government spending overnight by some clever accounting trick or increasing taxes on "the wealthy": there aren't nearly enough wealthy people to cover that.
- BoiledCabbage 7y ago

vearwhershuh 7y ago

Number 3 will not create inflation. Not in all cases and not in our current environment. That is a myth pushed by the banks in order to keep the current system in place. Debt spends the same as money. We have already had the inflation, paid for with debt. Now the debt system is becoming unstable and will lead to deflation unless we put non-debt spending power in the average persons hands. Read Keen's site, he explains the situation: http://www.debtdeflation.com/blogs/manifesto/ http://www.debtdeflation.com/blogs/manifesto/ Most economists view debt as a wash. "We owe it to ourselves." But, at Keen demonstrates, that isn't the case. We need a debt jubilee if we want the economy to function properly again, and he, alone and mocked by any mainstream economist who actually paid attention to him, came up with a modern, fair way to do it.

throw0101a 7y ago

> ... 3) print money to cover it. > Number 3) will cause significant inflation, so it will effectively be paid for by tax on cash savings. Yeah, the same was said before QE was rolled about and it did not happen--as predicted Krugman and those that follow IS-LM models: * https://krugman.blogs.nytimes.com/2015/02/12/qe-truthers/ https://krugman.blogs.nytimes.com/2015/02/12/qe-truthers/ * https://en.wikipedia.org/wiki/Zero_lower_bound https://en.wikipedia.org/wiki/Zero_lower_bound Stimulus now could be very useful, and 'helicopter money' is probably just as good as any other method: * https://www.nytimes.com/2020/03/07/opinion/the-case-for-permanent-stimulus-wonkish.html https://www.nytimes.com/2020/03/07/opinion/the-case-for-perm... * https://archive.is/Z2TMK https://archive.is/Z2TMK