6 ms·

America is both rich & poor at the same time. We have one of the most productive and efficient workforces on the planet, yet we are $17 trillion in debt. This

by chiph 13y ago

America is both rich & poor at the same time. We have one of the most productive and efficient workforces on the planet, yet we are $17 trillion in debt. This can only be because we spent our money poorly - making bad decisions about where it should go. That debt can only be retired if we have a plan to stop increasing it, and to make payments to reduce the principal. The article says that the BIG would do this, but provides no rationale as to how this might happen. Would the BIG replace the myriad existing income programs? I don't see how - $10k is $834 a month, which not much more than the monthly food bill for a family. It would be to their advantage to continue on the old programs, as they'd get more money each month. The other danger is that the $10k wouldn't stay $10k for very long. Soon, there would be impassioned pleas from the politicians that "We have to help these people" by increasing it to provide a living wage.

guard-of-terra 13y ago
"for a family" Slightly unrelated: Of course children should receive BI. Why won't they? Of course, legal care must be taken so 10% of a family first child's BI, 33% of second child's BI, 50% for thirg child's BI (and so on) go to some special saving account then used to finance housing or education for those children. Or else a "family" collecting BI for their five children, living off it and then give children a boot after they grow up will become a social problem.
- VLM 13y ago
  Why should the .gov chose a winner as in "used to finance housing or education for those children"? Why not demand a savings account for iphones to make apple rich? The fundamental problem is housing and (excessive) education is a non-productive activity. I don't see any benefit for society as a whole, in a supply/demand situation, to make relators and school administrators wealthy, while making it financially much more difficult / impossible for kids from small families to compete. What philosophical reasoning behind a kid with only one bro/sis has to live in the poor ghetto or be unable to afford college, in comparison a kid with ten bro/sis will have far more money in his account and be better off for his/her entire life merely because his parents were more fertile? There's an obvious financial reason under this system for college admins and housing builders to encourage huge families, because they'll be able to suck more money out of them. Another interesting effect of inflating higher ed prices would be the elimination via unaffordability for adult education. No more going back to school to learn X if the tuition for X has been exploded such that only children with 18 years of savings and 10 siblings can afford it. I'm not sure as a cultural trend that using the hammer of .gov policy to discourage lifetime learning (insert cliche about the economy being faster than ever, blah blah) is a wise social goal.
  - guard-of-terra 13y ago
    Whoa whoa okay, let's put it in some savings account that is divided to all children equally once they're 18. They are then free to spend it as they want. This is to avoid inheritance problem: One- or two-kids families usually can conjure more help for grown-up children than big families, while big families receive more financial help but tend to eat thru it saving nothing. We need to defer some of that financial help till children grow up.
    - westicle 13y ago
      Why exactly does an 18-year old with a guaranteed income need 18 years' worth of savings invested for them? I don't think you really understand the concept of a guaranteed minimum income. The idea is that you can live and eat without the rigamarole of food stamps/qualifying for a benefit program etc. Introducing complexity such as investment programs and sliding scales for families is not productive and, in my view, counter to the underlying principle.
      - guard-of-terra 13y ago
        It wouldn't be 18 years' worth of savings, more like 5 years of savings. That would let the child buy some home or attend so college. That's a bonus. the main thing that we get by this is discourage child farms by withholding some of BIG. And we can't just take some part of BIG because that would be, like, human rights violation.
        westicle 13y ago
        I have a better way to discourage child farms: only pay BIG to adults.
        lutusp 13y ago
        But then those adults will have children and complain that the state is anti-child. I know this because people already do that, on less evidence.
- westicle 13y ago
  Not sure if you read all of the linked article but it proposes a basic income for adults only. This makes sense to me; children don't have a clue about money. Although if a child were say, emancipated from her family (living independently) perhaps she should receive a basic income?
  - guard-of-terra 13y ago
    Pay it to the family. They have their parents' rights yet, don't they.
    - westicle 13y ago
      I think there are many, many problems with this concept. Children have vastly lower living expenses than adults (or more correctly - the basic marginal cost of adding a child to a household is negligible). There is no reliable way to ensure that income is actually spent on that child. It is apparent that some parents (for want of a better word) already see children as a benefits-magnet. This gives a viable alternative to working a productive job and earning a good wage: pump out 9 kids by the age of 21 and enjoy a sweet $100k salary until they come of age themselves. You may safely neglect them in the meantime and pass any costs thereof, such as incarceration or hospitalisation, onto the state. I think a much better approach is to limit a basic income to adults (or those financially independent of guardians) and give every child a Finnish-style baby box. http://www.bbc.co.uk/news/magazine-22751415 http://www.bbc.co.uk/news/magazine-22751415 Limits the financial impact of a child, and has very minimal opportunity for abuse.
      - guard-of-terra 13y ago
        Everybody have vastly different living expenses. Accounting for that expenses is the thing we're trying to avoid when replacing every kind of pension and benefit with one BIG. Why would we want to revert it 180 degrees when talking about children? The whole point of what I wrote is avoiding the use of children as benefits-magnet by withhelding part of their BIG into savings. Pumping out 9 kids won't work because you'll get just 3 BIGs for them - the rest will go into savings. Then, having a child or two will actually be very financially rewarding because it's what is good for society.
- seanmcdirmid 13y ago
  We might get to the point someday where we want to encourage a higher birthdate, like say much of Europe, Japan, Korea, Singapore. This could be a decent way of doing that.
pessimizer 13y ago
You misunderstand the nature of public debt. We still haven't paid off the Civil War.
KMag 13y ago
"This can only be because we spent our money poorly - ..." Irresponsible spending is not the only way to accumulate $17 trillion in debt. As long as the real interest rate is negative, it's perfectly rational for the US government to keep increasing debt, as long as the debt is at a level where the US could reasonably pay down most of the principle that becomes due each year if the US loses the ability to roll the debt forward at rates below inflation. Currently, yield on the 10-year is about 2.75% and US real effective exchange rate inflation is just over 3%. Back in... 2003? I remember one bank offering credit cards with no annual fee and zero interest for the first year. I got a credit card for $2,500, maxxed it out on tax-deductible charity donations I was going to make anyway, paid it off a year later, and never touched the card again. One friend told me there was a loophole in the bank's promotion for rolling debt from another credit card, where you could for free turn that credit limit into a one year interest-free personal loan. Depending on one's risk appetite, one would then either buy US treasuries, 6 month CDs, or some high grade commercial paper. As long as one had enough savings to easily stomach a $2,500 loss if things went sour, it was perfectly rational to max out one of these credit cards for an arbitrage opportunity of about 200 bps. (* This should not be construed as investment advice or solicitation for any investment.) Then again, that's a fair amount of work for a free $50. Now, it seems the US government doesn't have a plan for dealing with this debt if the world stops charging the US insanely low interest rates on its debt. That's irresponsible spending. Debt isn't the problem. The problem is the lack of a good plan to reduce debt when the world stops paying the US 25 bps for the privilege of holding US debt.
- asdfdsa1234 13y ago
  60% of the US national debt matures in three years or less. It isn't rational to expose yourself to that much interest rate risk, but the people taking on this risky debt on behalf of the rest of us won't be the ones responsible for paying it if interest rates spike.

by chiph 13y ago

guard-of-terra 13y ago

"for a family" Slightly unrelated: Of course children should receive BI. Why won't they? Of course, legal care must be taken so 10% of a family first child's BI, 33% of second child's BI, 50% for thirg child's BI (and so on) go to some special saving account then used to finance housing or education for those children. Or else a "family" collecting BI for their five children, living off it and then give children a boot after they grow up will become a social problem.

VLM 13y ago
Why should the .gov chose a winner as in "used to finance housing or education for those children"? Why not demand a savings account for iphones to make apple rich? The fundamental problem is housing and (excessive) education is a non-productive activity. I don't see any benefit for society as a whole, in a supply/demand situation, to make relators and school administrators wealthy, while making it financially much more difficult / impossible for kids from small families to compete. What philosophical reasoning behind a kid with only one bro/sis has to live in the poor ghetto or be unable to afford college, in comparison a kid with ten bro/sis will have far more money in his account and be better off for his/her entire life merely because his parents were more fertile? There's an obvious financial reason under this system for college admins and housing builders to encourage huge families, because they'll be able to suck more money out of them. Another interesting effect of inflating higher ed prices would be the elimination via unaffordability for adult education. No more going back to school to learn X if the tuition for X has been exploded such that only children with 18 years of savings and 10 siblings can afford it. I'm not sure as a cultural trend that using the hammer of .gov policy to discourage lifetime learning (insert cliche about the economy being faster than ever, blah blah) is a wise social goal.
- guard-of-terra 13y ago
  Whoa whoa okay, let's put it in some savings account that is divided to all children equally once they're 18. They are then free to spend it as they want. This is to avoid inheritance problem: One- or two-kids families usually can conjure more help for grown-up children than big families, while big families receive more financial help but tend to eat thru it saving nothing. We need to defer some of that financial help till children grow up.
  - westicle 13y ago
    Why exactly does an 18-year old with a guaranteed income need 18 years' worth of savings invested for them? I don't think you really understand the concept of a guaranteed minimum income. The idea is that you can live and eat without the rigamarole of food stamps/qualifying for a benefit program etc. Introducing complexity such as investment programs and sliding scales for families is not productive and, in my view, counter to the underlying principle.
    - guard-of-terra 13y ago
      It wouldn't be 18 years' worth of savings, more like 5 years of savings. That would let the child buy some home or attend so college. That's a bonus. the main thing that we get by this is discourage child farms by withholding some of BIG. And we can't just take some part of BIG because that would be, like, human rights violation.
      - westicle 13y ago
        I have a better way to discourage child farms: only pay BIG to adults.
        lutusp 13y ago
        But then those adults will have children and complain that the state is anti-child. I know this because people already do that, on less evidence.
westicle 13y ago
Not sure if you read all of the linked article but it proposes a basic income for adults only. This makes sense to me; children don't have a clue about money. Although if a child were say, emancipated from her family (living independently) perhaps she should receive a basic income?
- guard-of-terra 13y ago
  Pay it to the family. They have their parents' rights yet, don't they.
  - westicle 13y ago
    I think there are many, many problems with this concept. Children have vastly lower living expenses than adults (or more correctly - the basic marginal cost of adding a child to a household is negligible). There is no reliable way to ensure that income is actually spent on that child. It is apparent that some parents (for want of a better word) already see children as a benefits-magnet. This gives a viable alternative to working a productive job and earning a good wage: pump out 9 kids by the age of 21 and enjoy a sweet $100k salary until they come of age themselves. You may safely neglect them in the meantime and pass any costs thereof, such as incarceration or hospitalisation, onto the state. I think a much better approach is to limit a basic income to adults (or those financially independent of guardians) and give every child a Finnish-style baby box. http://www.bbc.co.uk/news/magazine-22751415 http://www.bbc.co.uk/news/magazine-22751415 Limits the financial impact of a child, and has very minimal opportunity for abuse.
    - guard-of-terra 13y ago
      Everybody have vastly different living expenses. Accounting for that expenses is the thing we're trying to avoid when replacing every kind of pension and benefit with one BIG. Why would we want to revert it 180 degrees when talking about children? The whole point of what I wrote is avoiding the use of children as benefits-magnet by withhelding part of their BIG into savings. Pumping out 9 kids won't work because you'll get just 3 BIGs for them - the rest will go into savings. Then, having a child or two will actually be very financially rewarding because it's what is good for society.
seanmcdirmid 13y ago
We might get to the point someday where we want to encourage a higher birthdate, like say much of Europe, Japan, Korea, Singapore. This could be a decent way of doing that.

pessimizer 13y ago

You misunderstand the nature of public debt. We still haven't paid off the Civil War.

KMag 13y ago

"This can only be because we spent our money poorly - ..." Irresponsible spending is not the only way to accumulate $17 trillion in debt. As long as the real interest rate is negative, it's perfectly rational for the US government to keep increasing debt, as long as the debt is at a level where the US could reasonably pay down most of the principle that becomes due each year if the US loses the ability to roll the debt forward at rates below inflation. Currently, yield on the 10-year is about 2.75% and US real effective exchange rate inflation is just over 3%. Back in... 2003? I remember one bank offering credit cards with no annual fee and zero interest for the first year. I got a credit card for $2,500, maxxed it out on tax-deductible charity donations I was going to make anyway, paid it off a year later, and never touched the card again. One friend told me there was a loophole in the bank's promotion for rolling debt from another credit card, where you could for free turn that credit limit into a one year interest-free personal loan. Depending on one's risk appetite, one would then either buy US treasuries, 6 month CDs, or some high grade commercial paper. As long as one had enough savings to easily stomach a $2,500 loss if things went sour, it was perfectly rational to max out one of these credit cards for an arbitrage opportunity of about 200 bps. (* This should not be construed as investment advice or solicitation for any investment.) Then again, that's a fair amount of work for a free $50. Now, it seems the US government doesn't have a plan for dealing with this debt if the world stops charging the US insanely low interest rates on its debt. That's irresponsible spending. Debt isn't the problem. The problem is the lack of a good plan to reduce debt when the world stops paying the US 25 bps for the privilege of holding US debt.

asdfdsa1234 13y ago
60% of the US national debt matures in three years or less. It isn't rational to expose yourself to that much interest rate risk, but the people taking on this risky debt on behalf of the rest of us won't be the ones responsible for paying it if interest rates spike.