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What this scheme does is create equitable inflation. That is, I concur, not identical to BI. However, inflation does come with redistributive effects. In most
by chipsy 11y ago
What this scheme does is create equitable inflation. That is, I concur, not identical to BI. However, inflation does come with redistributive effects.
In most macroeconomic models, the question of "who makes the money" is abstracted into "the banks make it and lend it to everyone." That means that money has to start in the investment sphere - the expected impact on individuals is to experience cheaper debt and higher wages and prices - a sort of "regression to the mean" in their financial status.
But in a situation like the post-GFC markets, investment tends to slosh around in financial instruments without reaching Main Street in any meaningful way - the money isn't turned into capex or wages. This is the kind of thing that is smoothed out when the inflation is reformulated as a benefit. Individuals still experience the regression to the mean, but it happens instantaneously, on a predictable schedule.
- jsprogrammer 11y agoMost likely, it's just an impedance mismatch between current models and reality. Institutions and individuals with access to money taps will find ways to divert some of the flows towards their benefit while ignoring all of the downstream effects.
- harperlee 11y agoCould we create a system where inflation would hit harder on the one that had the most money? That way, rich people would be enticed to move their money, and invest in risky plays. Some of them would grow very rich, others would lose a lot of money, but, on the end, they would end up reducing their income...
- ejlo 11y agoThe tool for that is demurrage, http://en.wikipedia.org/wiki/Demurrage_%28currency%29 http://en.wikipedia.org/wiki/Demurrage_%28currency%29, which adds devaluation of the currency over time. This complements Basic Income very well, with UBI for money creation and demurrage for money destruction. For physical currency is has some obvious practical problems, which has prevent adoption, but for virtual currencies it is easy to implement.
- harperlee 11y agoWell sorry, I did not explain myself properly: my idea was that, if every coin could be associated with a specific person, rich people's coins might devalue quicker than poor people's coins. It's a weird idea and giving it a little more thought, I don't see how could a state enforce such a system effectively, though.
- tlarkworthy 11y agovariable Sales tax/VAT pegged to credit card and linked to SSN/NI Cash purchases would be problematic. Maybe drawing out cash incurs the variable tax too?