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who would be for this?
I can think of a few minor problems, but overall, this sound good to me.
http://www.addictinginfo.org/2013/12/27/should-we-have-a-basic-income-in-the-us/
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Warren Stupidity
(48,181 posts)It remains a very good idea, one that crosses ideological boundaries and could transform society.
Scuba
(53,475 posts)Demo_Chris
(6,234 posts)This is the kind of bold thinking we need.
Warren Stupidity
(48,181 posts)Demo_Chris
(6,234 posts)In no order, and just off the top of my head...
Cost: It's expensive. According to the link, $1200 per month per adult, plus Medicare for all, comes at a cost of 4.4 Trillion a year. However, this year the Federal Government's TOTAL revenue was about 2.75 Trillion. So, under this plan, before we have even spent a penny on Defense or Education or any of the other necessary programs, we would be running 1.5 Trillion deficits, and that's not even close to sustainable.
If we wanted to do this we would need massive tax hikes on the top earners.
Inflation I am not smart enough to know the answer, but I suspect that this much cash entering the economy would cause a great deal of price inflation, at least until things stabilized, and that this inflation would have a significant impact on the actual value of this subsidy. How this played out over the long term I could not begin to say.
Taxes At a time when the Feds need every dime to try and fund this massive spending program, we would predictably see a great many people voluntarily cutting their own hours and using their subsidy, and companies cutting pay under the premise that the subsidy makes up the difference. This would include the middle class, the group currently getting squeezed. If a family deliberately works fewer hours and uses their subsidy to compensate, or their employer cuts their pay using the subsidy as an excuse, in either case that family isn't going to be earning as much taxable income.
In other words, the entire tax code would need to be redesigned in order to extract the necessary money from the top, and particularly from Capital Gains.
Warren Stupidity
(48,181 posts)And it is not a major problem. Of course the financing is directly linked to taxes, which isn't really your third issue, which would be better characterized as the "moral hazard" issue, wherein apparently everyone will become shiftless and lazy if they don't have the threat of destitution to motivate them, a theory I completely reject.
If it is your belief that a society where inequality is reduced by setting a floor on income will result in runaway inflation, then I guess you must believe that our economy requires the current historically imbalanced levels of inequality in order to maintain prosperity and security for the few at the top.
Demo_Chris
(6,234 posts)The financing is NOT explained at all, it's is danced around by talking about some savings. The cost of this plan exceeds the current total of all federal receipts by about 1.5 Trillion. If a family earns $2000 a month, trading in their Honda ($300 a month savings!) does not allow them to finance a $3000 a month Ferrari.
Of course the financing is directly linked to taxes, which isn't really your third issue, which would be better characterized as the "moral hazard" issue, wherein apparently everyone will become shiftless and lazy if they don't have the threat of destitution to motivate them, a theory I completely reject
Don't assign value judgments where I have not. I said that individuals would predictably reduce their own hours worked. I believe that the article predicts this as well. And why wouldn't they? That's one of the major selling features of the plan -- it frees people from wage slavery and allows them to live and enjoy their lives. I would expect to see many people who are currently full time voluntarily drop some hours in order to devote time to their families and hobbies and what not. That's not lazy, it's sane. If you are handed a guaranteed $1200 extra a month, $2400 extra for a family, why in the hell wouldn't you cut back your own hours worked?
And it's not like we have some shortage of labor waiting to grab a few hours and fill the gap. The issue, and it is not insurmountable, is that every person who takes advantage of this reduces the amount of taxable income they earn. They are reducing their taxable income and replacing it with a tax-free subsidy. This can be overcome by making the subsidy taxable of course, but it would need to be addressed somehow.
If it is your belief that a society where inequality is reduced by setting a floor on income will result in runaway inflation, then I guess you must believe that our economy requires the current historically imbalanced levels of inequality in order to maintain prosperity and security for the few at the top.
I am no expert, but it seems that the injection of TRILLIONS of dollars a year, in liquid currency, would have a massive impact on price inflation. This impact would reduce the effectiveness of the subsidy. I think (again, no expert, so this is a guess) that if the subsidy is fixed and the government does not initially try to chase the inflation, that prices would stabilize and wages would come up to compensate. But the key point is this: don't expect a $1200 subsidy to be worth what $1200 is worth today.
As I said, I am IN FAVOR of this plan or something like it. I think it is necessary. NECESSARY. So don't bite my head off for raising what I believe are reasonable considerations and questions.
Warren Stupidity
(48,181 posts)there is no injection going on. The proposal is not: print trillions of dollars and hand them out. Financed through taxation, in the details as laid out. Money in, money out, modulo our usual deficit financing, with whatever impact on inflation that has, currently not much.
The reduction in job hours and increase in consumer demand would increase employment.
TreasonousBastard
(43,049 posts)have the Earned Income Credit which even Reagan went for.
Aside from the basics of administering it and the fights over just who gets it (green cards, married couples get one or two...) it could work if the other relevant programs were cut to finance it. That, of course, would be a huge fight in itself.
If other programs are cut to pay for this, the net effect on inflation might not be so bad. With low wages so popular, though, might we be looking to a permanent class on the dole, or do we raise wages to get anyone to work? Or do we just open the gates to immigrants who won't be eligible for the plan and have to work for low wages?
jwirr
(39,215 posts)have less bigwigs. Also even though the states do not like this - being a single payer system straight from the feds saves money at the administration level for the state. Social Security is a very good example of this. Administrative cost are still in the single digits.
madamesilverspurs
(15,806 posts)They need to sustain a portion of the population on the edge of desperation, willing to work for a pittance cleaning their toilets and carrying out their trash.
Further, if such a thing did come to pass, you know that the Kochs of this country would demand their share, just to be "fair."
Shandris
(3,447 posts)...as we approach post-scarcity. That is going to be a game-changer the likes of which hasn't been seen since the printing press or the assembly line, or it will carry such a toll in human lives as to make previous wars seem gentle. I can only hope that we make it the former and not the latter, all for the sake of a few powerful people who are scared to have an economy based on reputation and public service rather than exploitation and manipulation.