6 ms·

An idea that I really like is to do what countries like Singapore and the Scandinavian countries do: create a public sovereign wealth fund, and then do what Sta

by bhupy 5y ago

An idea that I really like is to do what countries like Singapore and the Scandinavian countries do: create a public sovereign wealth fund, and then do what States like Alaska do: divert the dividends from the fund directly to the people. Alaska's Permanent Fund is only allowed to invest in Alaskan companies and is "only" $75B in size (https://www.alaskajournal.com/2021-02-24/fund-continues-bull-rush-nears-75b-value https://www.alaskajournal.com/2021-02-24/fund-continues-bull...), and even then an Alaskan resident would have received $2,000 in 2015 simply for existing: https://pfd.alaska.gov/Division-Info/Summary-of-Applications-and-Payments https://pfd.alaska.gov/Division-Info/Summary-of-Applications... By scaling up the size and scope of the fund, you can conceivably get to a place where the dividend can work out to $10k+ per person per year.

dv_dt 5y ago
I think one way to populate the fund is require the assets purchased by the Fed during bailouts to be held by the sovereign wealth fund.
frankbreetz 5y ago
The thing I worry about Universal Income, which the Alaska situation seems to be, is that there will be a bifurcation of people who need the UI and spend it every month and the people who put it into an investment. I guess if the checks keep coming it is not an issue, but if there is an event where the UI has to stop there will be a lot of pain. I think some sort of forced savings, that is only able to drawn upon at a certain age or for certain catastrophes is required. I guess you can only prevent people from being stupid so much, but what sometimes seems stupid is just people doing what the have to, to survive. I think the sovereign wealth funds have a lot of the same problems the social security has. Politicians will borrow against it and never pay it back. From what I have heard some middle eastern countries had a sovereign wealth fund that was mismanaged, I guess if you have a competent government it is fine, but you don't always get to decide that. Overall, I agree with you that both of these are a good way to distribute society's prosperity to the people.
- bhupy 5y ago
  Totally agree that the devil is in the implementation details which can make or break the idea as a whole. One potential way to mitigate these risks is to have the fund be set up with a strict breakdown, say, 20% of the dividends can go into a pot that the government can use for discretionary spending, and 80% goes to the people equally divided as a dividend, and the only way to change this percentage is with a 2/3s majority. The percentage split and the consensus threshold are certainly debatable.
mLuby 5y ago
> By scaling up the size and scope of the fund, you can conceivably get to a place where the dividend can work out to $10k+ per person per year. We've done that, except the dividends to go to a few rich families instead of to everyone.
- bhupy 5y ago
  Where have we done that? Keep in mind that we're talking about sovereign wealth funds funding a universal dividend; the closest we have to that is Alaska's fund, which provides an equal dividend to everyone regardless of income.
tastyfreeze 5y ago
I agree. I would go even farther. I think that governments should be funded by investment funds that are financed by revenue from resource utilization. Ideally, the investments are in local businesses and resource development. I am from Alaska. If Alaska had also set up a government fund at the same time to finance government the state would not be in financial trouble now. Alaska didn't do that and oil revenue was directly used to fund government. Now that oil revenue has decreased substantially there is nothing to fall back on. The greatest tool for building wealth is time. That is an asset that organizations have that individuals do not. Look at the endowments of top tier universities. There is no reason that governments can't do the same and benefit from the long lifespan of a non-human entity. This has the benefit of aligning government interests with the interests of the people. It also makes government more supportive than punitive as revenue only increases by cultivating an environment for business to flourish.

by bhupy 5y ago

dv_dt 5y ago

I think one way to populate the fund is require the assets purchased by the Fed during bailouts to be held by the sovereign wealth fund.

frankbreetz 5y ago

The thing I worry about Universal Income, which the Alaska situation seems to be, is that there will be a bifurcation of people who need the UI and spend it every month and the people who put it into an investment. I guess if the checks keep coming it is not an issue, but if there is an event where the UI has to stop there will be a lot of pain. I think some sort of forced savings, that is only able to drawn upon at a certain age or for certain catastrophes is required. I guess you can only prevent people from being stupid so much, but what sometimes seems stupid is just people doing what the have to, to survive. I think the sovereign wealth funds have a lot of the same problems the social security has. Politicians will borrow against it and never pay it back. From what I have heard some middle eastern countries had a sovereign wealth fund that was mismanaged, I guess if you have a competent government it is fine, but you don't always get to decide that. Overall, I agree with you that both of these are a good way to distribute society's prosperity to the people.

bhupy 5y ago
Totally agree that the devil is in the implementation details which can make or break the idea as a whole. One potential way to mitigate these risks is to have the fund be set up with a strict breakdown, say, 20% of the dividends can go into a pot that the government can use for discretionary spending, and 80% goes to the people equally divided as a dividend, and the only way to change this percentage is with a 2/3s majority. The percentage split and the consensus threshold are certainly debatable.

mLuby 5y ago

> By scaling up the size and scope of the fund, you can conceivably get to a place where the dividend can work out to $10k+ per person per year. We've done that, except the dividends to go to a few rich families instead of to everyone.

bhupy 5y ago
Where have we done that? Keep in mind that we're talking about sovereign wealth funds funding a universal dividend; the closest we have to that is Alaska's fund, which provides an equal dividend to everyone regardless of income.

tastyfreeze 5y ago

I agree. I would go even farther. I think that governments should be funded by investment funds that are financed by revenue from resource utilization. Ideally, the investments are in local businesses and resource development. I am from Alaska. If Alaska had also set up a government fund at the same time to finance government the state would not be in financial trouble now. Alaska didn't do that and oil revenue was directly used to fund government. Now that oil revenue has decreased substantially there is nothing to fall back on. The greatest tool for building wealth is time. That is an asset that organizations have that individuals do not. Look at the endowments of top tier universities. There is no reason that governments can't do the same and benefit from the long lifespan of a non-human entity. This has the benefit of aligning government interests with the interests of the people. It also makes government more supportive than punitive as revenue only increases by cultivating an environment for business to flourish.