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Thank you for posting these! Reading the transcript, Gates is really talking about a very similar concept to what the "helicopter" reference Ben Bernanke made

Thank you for posting these! Reading the transcript, Gates is really talking about a very similar concept to what the "helicopter" reference Ben Bernanke made talks about - maintaining demand and levels of consumption. The idea of a universal income has been widely discussed on HN in the past. Gates is simply proposing to start rolling this out via a larger earned income credit, while funding it via a progressive consumption tax. It's less controversial than the universal income, but personally, I'm not sure that creating useless work just to make sure consumption is propped up makes sense. If we are reaching the end of scarcity in basic needs, it seems to be more efficient to provide a baseline and then let people truly compete for the extra-ordinary lifestyle.

kristianp 12y ago
"I'm not sure that creating useless work just to make sure consumption is propped up makes sense.". That's not what was suggested. What Gates suggested is to move away from income tax, in order to encourage employment. The employment would still be useful, it would just be less costly due to reduced income tax. His mention of robots replacing jobs is part of that argument, to balance out areas where the economics of jobs vs automation may tip in the future. He suggested a progressive consumption tax as a replacement, but I'm not sure how to make a consumption tax progressive in a practical way, except to exempt basic foods for example.
- sologoub 12y ago
  Interesting point. Not exactly how I read it, but this makes sense as well. For the progressive consumption tax, to make it really meaningful and fair, you have to have very reliable data on what price range for given type of good is excessive. Alternatively, you could just tax classes of goods, such as luxury cars, etc. The one problem with such a tax is that it enables people to save a lot more instead of spending it. If the money sits in the banking system, it at least does some work, but if the saving happens in the form of physical goods of perceived high value (such as gold or jewelry), it doesn't actually help the economy beyond the initial purchase. That said, I would love to not have to pay income tax :)

kristianp 12y ago

"I'm not sure that creating useless work just to make sure consumption is propped up makes sense.". That's not what was suggested. What Gates suggested is to move away from income tax, in order to encourage employment. The employment would still be useful, it would just be less costly due to reduced income tax. His mention of robots replacing jobs is part of that argument, to balance out areas where the economics of jobs vs automation may tip in the future. He suggested a progressive consumption tax as a replacement, but I'm not sure how to make a consumption tax progressive in a practical way, except to exempt basic foods for example.

sologoub 12y ago
Interesting point. Not exactly how I read it, but this makes sense as well. For the progressive consumption tax, to make it really meaningful and fair, you have to have very reliable data on what price range for given type of good is excessive. Alternatively, you could just tax classes of goods, such as luxury cars, etc. The one problem with such a tax is that it enables people to save a lot more instead of spending it. If the money sits in the banking system, it at least does some work, but if the saving happens in the form of physical goods of perceived high value (such as gold or jewelry), it doesn't actually help the economy beyond the initial purchase. That said, I would love to not have to pay income tax :)