7 ms·

How was $1000/month for anyone over age 18 supposed to be funded? Without exact details answering such, do voters believe this is more than seeking voter-atten

• cheez 7y ago
  Yang's was well considered, I'm sure it's still on his website.
• therealdrag0 7y ago
  What are the options? - Taxes - Debt - Money printing
• generalpass 7y ago
  We'll have to pass the bill to find out!
• cultus 7y ago
  The same way we are funding massive corporate bailouts. Sovereign government debt does not work like personal debt, for the simple reason that money can be printed. Fears of inflation in a time like this are completely unwarranted. edit: Back of the envelope math shows that 1000/month for the US population is about $4 trillion/year. The Fed has pumped more than that into financial markets since this pandemic has started, alone. That is why the S&P is back up to where it was in 2018, despite the world suffering the greatest demand shock in history. Pumping up the financial markets is doing nowhere near the economic good that a UBI would right now.
  • xur17 7y ago
    I agree that worries of inflation are unwarranted (if anything we are at risk of deflation), but what happens after the economy returns? Aren't we at risk of inflation from all of the new money dumped into the economy?
    • cultus 7y ago
      We'll have to wait and see. If it winds up being too much government spending to avoid inflation, then taxes would have to be raised to cut down the inflation. I don't think this would be such a bad thing, since the income redistribution would be a benefit anyway. My guess is that it wouldn't cause much inflation, since much of the demand destruction we've seen will be permanent.
    • guerrilla 7y ago
      US consumer debt is exceptionally high [1]. This was true long before the pandemic. There is plenty of demand for money on the books and the underclass has a long way to catch up even after that. 1. https://www.thebalance.com/consumer-debt-statistics-causes-and-impact-3305704 https://www.thebalance.com/consumer-debt-statistics-causes-a...
    • LaEc 7y ago
      If inflationary pressures get to high, the Fed will raise the Fed Funds rate, affecting the market interest rates, incentivizing saving, decreasing inflationary pressures.
  • throwaway894345 7y ago
    Why are they completely unwarranted? I'm not an economist, so it's not obvious to me why printing money wouldn't lead create an inflation problem that is worse than the unemployment problem. I would be very interested to know the details that allow us to say such things so confidently. EDIT: Thanks to those who provided such insightful answers! Very helpful for a layperson like me.
    • zhte415 7y ago
      https://en.wikipedia.org/wiki/Equation_of_exchange https://en.wikipedia.org/wiki/Equation_of_exchange The velocity has dropped rapidly in recent weeks. To not increase supply would be deflationary.
    • cultus 7y ago
      It's completely unwarranted because you essentially can't have inflation in a depression. There isn't enough demand competing for supply to raise prices. That is why governments and central banks usually try to inject money into the economy in lean times, and take it out to keep it from overheating. It's the basis of essentially all macroeconomic management. The real danger in times of low demand is a deflationary spiral. Those are fiendishly hard to get out of, as the last few decades for Japan have demonstrated.
    • guerrilla 7y ago
      Inflation is caused by "too many dollars chasing too few goods" not literal money printing. The demand for basic goods as needs are going unmet is actually pretty high. A lot of the printed money would actually go to paying off debt and thus actually destroying money.
  • deleted 7y ago
    [deleted]
  • legitster 7y ago
    The Fed did not just print money - it added liquidity into the market via long term term obligations or asset swaps.
    • cultus 7y ago
      That's money that wasn't in the economy before that is now. They are growing their balance sheet with bonds and other assets, and paying for it with money they make.
  • AnimalMuppet 7y ago
    Isn't that the approach that Venezuela took? To me, any proposal to fund UBI by printing money has to explain why Venezuela failed, and how the new proposal is different in a way that matters.
    • bsanr2 7y ago
      Venezuela - and, frankly, the rest of the world - is reliant on monetary policy set by outside parties, who can also impose explicit (import/export) and de facto (loan terms) sanctions should their political positioning be undesirable. How much does the US government subsidize the average US citizen in services, tax rebates, etc.? Is it more or less than what Venezuela offered its citizens in cash payments? I honestly don't know, but I've become more convinced lately that Venezuela's issues have less to do with the efficacy of their policies than they do objections to the nature of their intended distribution of wealth.
  • LaEc 7y ago
    The Fed is lending money to prevent a financial crisis, not simply giving it away. Look back at the 2008 crisis and see that the government actually profited significantly from issuing those debts in the long term. UBI is a giveaway not a loan.
    • toomuchtodo 7y ago
      UBI is a generous tax credit. The Fed is printing money by their lending operations, devaluing the dollar in the process.
      • cultus 7y ago
        Six of one, half a dozen of the other. The difference is that Fed injections benefit the wealthy, and a UBI benefits the poor most. This is not inflationary, since we are in a depression. As far as devaluing the dollar versus other currencies, everyone else is creating tons of money as well. I'd really welcome a dollar devaluation, actually, to help with our trade deficit.
        • toomuchtodo 7y ago
          No argument from me! It's all just spreadsheet economics, with everyone attempting to shape the narrative to meet their ideology.
      • LaEc 7y ago
        Let us assume that your concerns about devaluation come true. Let us say that Poor Man has $10,000 and Rich Man has $10,000,000. Devaluation of dollar by 10% means poor man loses $1,000 and Rich man loses $1,000,000. Who loses out more under devaluation?
        • vkou 7y ago
          Poor man typically doesn't have $10,000, what they have is $10,000 and a $200,000 debt. And not all inflation is created equal. With QE, the printed dollars never make it to Main street, they end up inflating asset prices, while the price of butter stays the same. Whether that's a good thing is an exercise for the reader.
  • deleted 7y ago
    [deleted]
  • pxue 7y ago
    QE is not magically injecting trillions into the economy. Feds really don’t give a shit about the economy of dinners and rents of the little people. They care about macro employment rates. Shit, we could have a country 100% employment rate and people can’t pay rent, feds would still be patting themselves on the back for a job well done.
• throwaway287391 7y ago
  Yang proposed to fund it using a 10% VAT, which just about works out to the right amount if you assume you can enforce the VAT on the entire $20T US GDP. I doubt Pelosi has made a concrete funding proposal. (Edit: I answered specifically about Yang's/Pelosi's funding proposals because I thought that was what parent asked -- not sure if I'm crazy or they edited their post.)
  • jjtheblunt 7y ago
    Thanks for doing that; i edited the post realizing several had spoken of such.
• Reedx 7y ago
  Answers: https://www.yang2020.com/what-is-freedom-dividend-faq/ https://www.yang2020.com/what-is-freedom-dividend-faq/ He also talked about the actual implementation a lot during the campaign.
  • olivermarks 7y ago
    After Yang ran out of money to campaign (sic) and joined CNN, Tulsi Gabbard vowed to continue the UBI efforts (which she had also previously championed) with a proposed bill on March 12th as Direct Coronavirus Pandemic Relief. The DNC old guard, who mostly ignored Yang and ostracized and smeared Gabbard now seem to be slowly grasping some of these ideas and seeing how they could be tetrised into their status quo without disturbing too much... https://gabbard.house.gov/news/press-releases/rep-tulsi-gabbard-introduces-resolution-calling-emergency-universal-basic https://gabbard.house.gov/news/press-releases/rep-tulsi-gabb...
• mister_hn 7y ago
  By really applying taxation to rich?
  • basch 7y ago
    Or a tax on natural resources, extracted from America. Instead of a few people owning the mineral rights to everything underneath the country, you make American oil, coal, natural gas, sunlight, wind, nuclear energy something the people own. It's something that already happens in part of America, and it works in Europe. Supplement it with a VAT on luxury items above a certain threshold (yachts, jewelry, property) and a sin tax against sugar and other drugs. Cap it off by replacing agriculture subsidies with the tax break + a "heath discount" on the purchase end of the transaction. https://en.wikipedia.org/wiki/Alaska_Permanent_Fund https://en.wikipedia.org/wiki/Alaska_Permanent_Fund https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor... I would even advocate taking it a step further, and replacing HSA's and Social Security with individual savings accounts, a la Singapore. Approved purchases (up to a certain amount of rent, food stamps like foods, medical expenses) qualify for tax free or subsidized purchase (this is mostly psychological, giving people a "discount" vs depositing more money in their account, but it can also steer their behavior.) The government invests a certain amount in each person, and then they can contribute an additional amount from payroll. Segregate the money into two tiers, allow money in the "long term" side of the account to grow through some kind of investment, but minimize or eliminate the choice of how it is invested. Cap per year spending on everything except medical. Make it closer to a CD than SP500 investment. Everybody gets the same glide, per a single factor such as age or retirement date. Returns are guaranteed. Allow certain penalized/taxed hardship withdrawls. https://en.wikipedia.org/wiki/Central_Provident_Fund https://en.wikipedia.org/wiki/Central_Provident_Fund Plan: America First Sovereign Fund (mineral/luxury/sin tax), deposits into Forced Savings Account at USPS, which includes a tiered account that subtracts the qualifying part of a purchase from Savings Account, the rest gets charged to a Debit/Credit card on file. Allow the reverse, where Chase, WF, BoA, Citi can link their cards to your Savings Account, and automatically deduct qualifying purchases from it. Allow opt in for digital receipt tracking, or receipt scanning a la expensify, so you don't have to maintain records of purchases for disputes. If you use your bank card, you control what records are forwarded and stored in your USPS account. This does five things. It pays for the program. It gives everybody some individual responsibility to manage their account, while helping them save. It steers their purchases towards healthy. It gives everyone access to a public bank account that is tax exempt. It lets them not have to manage multiple swipes at the register. Finally, I'd advocate for a hybrid FTC/AG managed consumer protection service. Sort of a Consumer Reports / Wirecutter service on steroids that's easy for everyone to track their purchases, warranties, and to comparison shop with. A single place for product recalls, safety warnings, price comparisons, and information regarding what the best purchase to make is.
• zabil 7y ago
  I don't know how the numbers work. But I also don't think the plan is one page document that can be explained to a 5 year old. Same holds true for universal health care, social housing, subsidies etc etc. They may sound absurd in beginning but governments do implement them.
• quaquaqua1 7y ago
  I was typing out a really long response to you with many if...then statements, but then I realized there are too many powerful agencies and institutions that don't want to give up their ability to tax/spend. Medicaid/Medicare, Social Security, IRS, all 50 states etc have defined (and flawed processes) and probably will refuse to give up control over welfare spending or tax revenue generation. So if you can't completely start from scratch, then ultimately the only source of revenue for UBI would be to cut spending somehow (good luck convincing the Pentagon of that), or to generate additional taxation on businesses (which resulted in them moving crucial facilities to Mexico, Eastern Europe, India, China, etc) At some point, the USA might be better off if we all have a dividend for every citizen based on our country's profit, like Alaska has currently. This way it is not a guarantee how much you will make, but it is something.
  • SubiculumCode 7y ago
    First off, it doesn't have to be funded. We have a fiat currency. However the extent that new dollars are to be offset because of fear of inflation (not an immediate concern given current deflationary trends), the a partial offset via a VAT tax could work.
    • quaquaqua1 7y ago
      I am for a UBI. I think it should replace bureaucracy generated by all these alphabet agencies. Funding sources can all be explored. If we dont do this, surely robots will replace most jobs.
• petermcneeley 7y ago
  Its called redistribution. I understand and appreciate that that answer is not palatable to many people but that is the clear answer.
  • missedthecue 7y ago
    Even if you took all the money from all the billionaires, and we're assuming frictionless transaction and 100% liquidity, you can't afford it for more than a couple years. The money just runs out.
    • petermcneeley 7y ago
      USA gpd per capita is ~60k a year right? And your saying 12k per year per capita is impossible?
      • missedthecue 7y ago
        It's certainly possible to tax the average person $1050 monthly in order to pay that average person $1000 every month, but i really just don't see the point. There are just not enough rich people to transfer $2.5 trillion from annually.
        • petermcneeley 7y ago
          I think your arguing against some position that I am not even suggesting. You think im saying "if we took the money of billionaires we would have enough to give the whole country 1k/month forever" Im suggesting that there is enough money when you think in totality so this is merely a question of how comfortable you are with redistribution. Your saying 2.5 trillion annually; ok thats only like 12% of GDP. It is also completely logical that in the 21 century that only about 10% of value generated is enough to keep everyone fed clothed and sheltered.
          • missedthecue 7y ago
            You're saying redistribution. Meaning taking money from people with more to give to people with less. (I assume youre not just talking about moving figures around but leaving everyone with the same amount in the end). I'm saying there are not enough people with more than people less to provide that $12,000 transfer to each person in a way that benefits most people.
• SubiculumCode 7y ago
  Well if it was Andrew Yang's plan, then by a 10% VAT, and other things i.e. a carbon tax. In general, why the taxes are regressive, when paired with the UBI, the product is quite progressive.
  • xyzzyz 7y ago
    But Yang numbers weren’t even close to adding up. Last I checked them, even if you are very optimist and assume that he’ll get exactly as much as he expects in taxes, this wouldn’t fund even half of $1000/mo.
    • throwaway287391 7y ago
      How do you figure? A 10% VAT would bring in $2.1T on the $21T GDP. There are about 200M adults in the US. 200M * $12K is $2.4T, which is certainly in the right ballpark.
      • xyzzyz 7y ago
        Look at countries that actually have VAT. Germany for example has VAT at 19% rate, and it brings 6% of GDP to government budget. For Yang’s plan, he’d need more like 30% VAT. Of course this would be on top of already existing taxes.
        • throwaway287391 7y ago
          Ok, but your previous post said "even if you are very optimist and assume that he’ll get exactly as much as he expects in taxes", so I was operating under that optimistic assumption. Was Yang planning to exempt any part of the GDP from his VAT? Genuine question but I didn't think he was. Speaking of which, I googled Germany's VAT and it seems there are quite a few exemptions ("food, books, hotel accommodation, cultural services and other goods and services") that only get VATed at 7%, which is much closer to the 6% they apparently collect in practice. But sure, they probably do fail to collect quite a bit of what they theoretically could.
• vkou 7y ago
  By taking $950/month from the middle-class, $2000/month from the upper-middle-class, and $200 from the lower class. And a couple of million/month from billionaires. (If you can't tax the billionaires, increase all the payments above by $40/month.) You can't squeeze enough money out of the rich to give the middle class a free ride, there's not quite enough of it, and there's too much of a middle class. Edit: If you really want to tax the rich, don't tax their money, tax the things they own. Land value taxes. Taxes on stocks. The purpose of doing this shouldn't be to fund a social program, but to align the prosperity of the nation with their prosperity. If the government were a passive shareholder in ~40% of the S&P 500, then the nation as a whole would directly benefit from 40% of the returns of capitalism. If we had land value taxes, then the nation would directly benefit from the high cost of land (Which currently is nothing but a cost, and a drag on the economy, and funds all sorts of rent-seeking, unproductive uses of land.) And would skim a good slice of the rent-seeking parts of the economy.
• mytailorisrich 7y ago
  They do not give answers because it is very clear with a simple calculation that this is unaffordable in addition to serving no purpose. Giving $1000 a month to 210 million people costs $210 billion a month, $2.5 trillion a year. I believe that the annual federal tax revenue is about $3.4 trillion.
  • ardy42 7y ago
    > They do not give answers because it is very clear with a simple calculation that this is unaffordable in addition to serving no purpose. > Giving $1000 a month to 210 million people costs $210 billion a month, $2.5 trillion a year. > I believe that the annual federal tax revenue is about $3.4 trillion. If you're going to implement a UBI program (or any kind of large-scale social democratic benefits program), taxes will be increased to pay for it.
    • mytailorisrich 7y ago
      "just increase taxes" does not work in the real world (especially here it would be close to doubling taxes) and still does not answer why you would want to hand money to everyone across the board. It also sounds a little circular: Increase people's taxes so that you can use the income to give money back to them.
      • ardy42 7y ago
        > It also sounds a little circular: Increase people's taxes so that you can use the income to give money back to them. Progressive taxation doesn't work that way. The whole idea is that some would pay in more than they take out; in some cases, far more.
• CapriciousCptl 7y ago
  By the people under 18. It's worked for 2 decades now-- issue massive debt and let our children figure out how to pay it.
• jonahbenton 7y ago
  In general Andrew intended that proposal to re-orient the conversation about spending priorities and service delivery. In concrete terms, Andrew proposed a VAT, while also reorganizing existing social welfare programs, of which there are uncountable multitudes, each with highly specific eligibility requirements and screening and fraud machinery, into a more coherent, holistic delivery model that de-prioritized or eliminated eligibility. His numbers "work" but at that scale they entail such an enormous reworking of federal and state machinery that they're in practical terms a non-starter. Cue up recent conversations about M4A, Obamacare, etc, but on an even larger scale. (disclaimer: I support the idea, but appreciate it is more conceptual value than concrete implementation.) Right now, Fed govt takes in $3.8 trillion in revenues, mostly taxes, spends $4+ trillion, with two thirds of fiscal dollars going to human-oriented mandatory programs like social security, medicare, medicaid, various federally funded insurance programs, etc and one third going to discretionary, which itself is half military, then half everything else. A VAT would essentially be a transaction tax that scaled to GDP, so from a model perspective, while GDP is $20T, a VAT would bring in $2T of new revenues, sufficient to begin a conversation about giving $10k/year to 200,000,000 people. In reality- who knows. A VAT would have huge implications and lots and lots of things would change. A lot of the comments center around credit dollars that the Fed has created- basically large scale loans- to provide transitory liquidity to the financial system. Those comments misunderstand the nature of credit dollars, but IMHO they are not wrong. Credit dollars are a completely different tool than the above fiscal dollars generated from taxes. The US government has essentially infinite credit capacity. To my eyes credit dollars are both a better and more appropriate funding source for something like UBI, particularly if UBI is tweaked to focus on the liquidity needs of children, women, and those whose current fiscal value is low relative either to future value or to the fiscal value of others. I would love Pelosi to consider that as a concrete option, the politics seem ideal for it.