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It comes from spending the money. If you don't understand that, then time to get the book and learn how the money system works https://www.amazon.com/dp/B07YM

It comes from spending the money. If you don't understand that, then time to get the book and learn how the money system works https://www.amazon.com/dp/B07YM2K8F3 https://www.amazon.com/dp/B07YM2K8F3

luckylion 6y ago
> It comes from spending the money. No, it comes from taxing people outside the experiment.
- neilwilson 6y ago
  Not in financial terms. The money comes from the circulation. It's all just a money illusion. It passes tax points as it is spent and re-earned. The real goods and services comes from outside the experiment. Scratch any UBI scheme and you'll find (i) a tax credit system in disguise because the amount isn't enough to live on (ii) a currency lock with an area that doesn't receive the payment and who fill the goods and services deficit, or (iii) a set of people who don't receive the payment (usually due to a qualifying period), and who fill the goods and services deficit.
notahacker 6y ago
Even Wray and Mitchell aren't radical enough to argue that money printing without work incentives is sustainable...
- neilwilson 6y ago
  Nice straw man. Where did I mention that? The money comes from spending the money. And you can do that right up to the point where you run out of unemployment. In the vernacular where government spending becomes ineffective.
  - notahacker 6y ago
    I'd have thought the point as pertains to UBI - an expensive permanent universal subsidy rather than a payout to the unemployed or job guarantee which fluctuates cyclically according to unemployment levels - was pretty obvious. In conventional economics the government funds its spending by borrowing or taxation. In Randall/Wray economics a unified govt/central bank spends the money into existence and has huge scope for fiscal stimulus in economic downturns with bond issue being unnecessary, but money still derives its value from the taxes the government levies. Under either economic model, the extra cost of funding voluntary economic inactivity under UBI implies net tax rises.
makomk 6y ago
This answer fundamentally doesn't work; let me see if I can concisely explain why. When someone spends money to buy a good or service, the money recirculates but the actual thing they've bought is consumed. If you pump up the supply of money by taking the same amount of money and recirculating it through the economy more, but without increasing the supply of goods and services, this means that the price of those things has to increase correspondingly just like if you outright printed a load of money and handed it out to everyone. Economically speaking, these two methods of increasing the money supply have very similar effects. (In practice, strong UBI is probably even worse than this if the idea is to make it feasible for people to not work, since the supply of goods and services will actually shrink and employers' labour costs will increase.)
- neilwilson 6y ago
  That again is fundamentally wrong. As I said go read the book and learn something. Pro-tip. You completely forgot about consumption and income taxes. And that there is unemployed labour capacity available - anywhere across the world. There isn't a finite amount of stuff, there is always capacity to expand in a business, but it may take a while, and hardly anything is subject to price auctions (see PPE for details). What happens when we hit capacity is that there is forced savings. You end up with spending capacity but nothing to buy or nothing you want to buy. In the vernacular your spending becomes ineffective. Excess savings have the same economic effect as taxation. It's the excess savings that income schemes are trying to offset. But that just moves the problem from the financial sphere into the real sphere - why should I grow you any carrots if you're not contributing your effort to the common good?

luckylion 6y ago

> It comes from spending the money. No, it comes from taxing people outside the experiment.

neilwilson 6y ago
Not in financial terms. The money comes from the circulation. It's all just a money illusion. It passes tax points as it is spent and re-earned. The real goods and services comes from outside the experiment. Scratch any UBI scheme and you'll find (i) a tax credit system in disguise because the amount isn't enough to live on (ii) a currency lock with an area that doesn't receive the payment and who fill the goods and services deficit, or (iii) a set of people who don't receive the payment (usually due to a qualifying period), and who fill the goods and services deficit.

notahacker 6y ago

Even Wray and Mitchell aren't radical enough to argue that money printing without work incentives is sustainable...

neilwilson 6y ago
Nice straw man. Where did I mention that? The money comes from spending the money. And you can do that right up to the point where you run out of unemployment. In the vernacular where government spending becomes ineffective.
- notahacker 6y ago
  I'd have thought the point as pertains to UBI - an expensive permanent universal subsidy rather than a payout to the unemployed or job guarantee which fluctuates cyclically according to unemployment levels - was pretty obvious. In conventional economics the government funds its spending by borrowing or taxation. In Randall/Wray economics a unified govt/central bank spends the money into existence and has huge scope for fiscal stimulus in economic downturns with bond issue being unnecessary, but money still derives its value from the taxes the government levies. Under either economic model, the extra cost of funding voluntary economic inactivity under UBI implies net tax rises.

makomk 6y ago

This answer fundamentally doesn't work; let me see if I can concisely explain why. When someone spends money to buy a good or service, the money recirculates but the actual thing they've bought is consumed. If you pump up the supply of money by taking the same amount of money and recirculating it through the economy more, but without increasing the supply of goods and services, this means that the price of those things has to increase correspondingly just like if you outright printed a load of money and handed it out to everyone. Economically speaking, these two methods of increasing the money supply have very similar effects. (In practice, strong UBI is probably even worse than this if the idea is to make it feasible for people to not work, since the supply of goods and services will actually shrink and employers' labour costs will increase.)

neilwilson 6y ago
That again is fundamentally wrong. As I said go read the book and learn something. Pro-tip. You completely forgot about consumption and income taxes. And that there is unemployed labour capacity available - anywhere across the world. There isn't a finite amount of stuff, there is always capacity to expand in a business, but it may take a while, and hardly anything is subject to price auctions (see PPE for details). What happens when we hit capacity is that there is forced savings. You end up with spending capacity but nothing to buy or nothing you want to buy. In the vernacular your spending becomes ineffective. Excess savings have the same economic effect as taxation. It's the excess savings that income schemes are trying to offset. But that just moves the problem from the financial sphere into the real sphere - why should I grow you any carrots if you're not contributing your effort to the common good?