Ask HN: Any volunteers for Guaranteed Basic Income Non-Profit?
4 comments
I thought about this many years ago. It occurred to me that it could be put under the purview of the Federal Reserve Bank. Each citizen would become a stock holder of the Fed, owning one non-transferable share. Each stock would pay a monthly dividend and hence a basic income for all.
Few people know that right now there are already share holders in the Federal Reserve. They get paid 6% on their money guaranteed by law. Hence the Fed has incentive to keep inflation below this threshold. Lets use this as a template for every citizen. If a "basic income" was pegged to a 20hr part-time job at minimum wage, that would be approx $6000/yr. That amount is 6% of $100,000. So if the Government invested $100,000 per citizen in the Fed, that would cover it. With 200,000,000 million adults that comes to a total of $20 trillion. Now we can use another clever idea... the Treasury can just print two $10 trillion dollar coins, pay the Fed with it and issue each stock in the name of every citizen (based on SS). And the matter is all but done. This transaction is essentially the same as the current issuance of Federal bonds. So it is a simple precedence to follow. (Note, as the minimum wage gets raised, the Government adds additional funds, about $1 billion for every quarter raise.)
Few people know that right now there are already share holders in the Federal Reserve. They get paid 6% on their money guaranteed by law. Hence the Fed has incentive to keep inflation below this threshold. Lets use this as a template for every citizen. If a "basic income" was pegged to a 20hr part-time job at minimum wage, that would be approx $6000/yr. That amount is 6% of $100,000. So if the Government invested $100,000 per citizen in the Fed, that would cover it. With 200,000,000 million adults that comes to a total of $20 trillion. Now we can use another clever idea... the Treasury can just print two $10 trillion dollar coins, pay the Fed with it and issue each stock in the name of every citizen (based on SS). And the matter is all but done. This transaction is essentially the same as the current issuance of Federal bonds. So it is a simple precedence to follow. (Note, as the minimum wage gets raised, the Government adds additional funds, about $1 billion for every quarter raise.)
Fantastically informative post. I learned.
As a slight addition, by eliminating only cost-based social programs like welfare, SNAP, etc., it would free up enough in spending to pay each adult citizen in the US approximately $12k per year, and probably more, because the administration costs should be less for one program vs. the many.
That amount could be added to the kitty as well.
I'm still on the fence as to whether or not we should have a basic income. I vastly prefer it to the deeply flawed social programs in place, and I suspect that any implementation we'd get from our government would be deeply flawed as well, or either progressive/regressive/broken in some way, but I don't know if I'm on board with the actual idea of it -- that said, it's very, very compelling, and your approach seems rational, Constitutionally valid, and practically, very workable.
As a slight addition, by eliminating only cost-based social programs like welfare, SNAP, etc., it would free up enough in spending to pay each adult citizen in the US approximately $12k per year, and probably more, because the administration costs should be less for one program vs. the many.
That amount could be added to the kitty as well.
I'm still on the fence as to whether or not we should have a basic income. I vastly prefer it to the deeply flawed social programs in place, and I suspect that any implementation we'd get from our government would be deeply flawed as well, or either progressive/regressive/broken in some way, but I don't know if I'm on board with the actual idea of it -- that said, it's very, very compelling, and your approach seems rational, Constitutionally valid, and practically, very workable.
Printing $20 trillion and issuing stock with neither resource (gold, silver, any rare or precious material) backing it will cause immediate devaluation of the existing currency and rapid inflation.
Issuing $20 trillion in stock with no service or commodity backing it will cause a rapid drop in the value of the stock, as there will be no demand for the stock.
If you use the $20t in stock to back the $20t in new currency, you're looking at a very rapid collapse in the economy. If you do this in the US, which is still currently the base for the global economy, you're talking about tanking everything. Once, or if, China or the EU trading zone become a more stable alternative foundation, it might not cause as much damage, but you're still looking at a sudden upheaval with this plan.
The alternative, of course, is to use the /people/ as the commodity or precious resource underpinning the 20 trillion dollars, but then we're talking about legitimate slavery. No, thank you.
I'm open to alternative ideas on how to back the investment and guaranteed income. I just see a hole in your current plan, that perhaps you've already thought about and covered.
Issuing $20 trillion in stock with no service or commodity backing it will cause a rapid drop in the value of the stock, as there will be no demand for the stock.
If you use the $20t in stock to back the $20t in new currency, you're looking at a very rapid collapse in the economy. If you do this in the US, which is still currently the base for the global economy, you're talking about tanking everything. Once, or if, China or the EU trading zone become a more stable alternative foundation, it might not cause as much damage, but you're still looking at a sudden upheaval with this plan.
The alternative, of course, is to use the /people/ as the commodity or precious resource underpinning the 20 trillion dollars, but then we're talking about legitimate slavery. No, thank you.
I'm open to alternative ideas on how to back the investment and guaranteed income. I just see a hole in your current plan, that perhaps you've already thought about and covered.
I like the idea, but I'm not sure this can work. The first thing you should do is try to poke as many holes in this idea as possible, then close them and build the case as to why this would work. One problem I see is that it might hyperfocus demand toward a small number of base consumption items if a larger than anticipated number of recipients do decide to not work. This could inflate the price of these basic items and put the poorest in society back into the same boat of not having quite enough money to sustain themselves (having to pay the higher price for goods that they previously could afford etc). Then, we'd have to revisit raising the basic income level every 3-5 years instead of 8-12 years. Along with ridiculous debt ceiling fights, we'd also have basic income fights.
If it's set up to avoid these fights by being indexed to the rate of inflation, people will lose ground over the long haul, since wages tend to rise faster than inflation (and if we index it to wages, it creates a problem currently being discussed with respect to social security) and those pressures from wages might ultimately drive the price of goods out of reach for those who rely on their basic income.
You might also see irrational behavior on the part of some recipients, where they buy nonessential items (iphones, hdtvs, etc) and choose to go hungry or even homeless. Econ likes to assume rational behavior, but that's only so it can fit into a nice model. Fact is, plenty of people act irrationally, and while it's easy to ignore them in a model, it's hard to when they're sleeping along the street or in your stairwell.
And what would we do with them? Put them in jail? Force them to spend only on essential goods? If we force them to spend on essentials, aren't we just calling it welfare by a different name? The state can't let them just linger, because their loitering has costs of it's own, not limited to growing social unrest (this is partly why privatizing social security is such a horrible idea -- the market might fail and the state will still have to bail out people's private pensions or risk unrest, probably gaining nothing but added uncertainty in the long term).
Our system just might function optimally when its set up to let people choose to fail, as some surely will, and to make it just painful enough to encourage moving one's self out of poverty.
Playing devil's advocate here. A shift like this would seem to have very little margin for error.
If it's set up to avoid these fights by being indexed to the rate of inflation, people will lose ground over the long haul, since wages tend to rise faster than inflation (and if we index it to wages, it creates a problem currently being discussed with respect to social security) and those pressures from wages might ultimately drive the price of goods out of reach for those who rely on their basic income.
You might also see irrational behavior on the part of some recipients, where they buy nonessential items (iphones, hdtvs, etc) and choose to go hungry or even homeless. Econ likes to assume rational behavior, but that's only so it can fit into a nice model. Fact is, plenty of people act irrationally, and while it's easy to ignore them in a model, it's hard to when they're sleeping along the street or in your stairwell.
And what would we do with them? Put them in jail? Force them to spend only on essential goods? If we force them to spend on essentials, aren't we just calling it welfare by a different name? The state can't let them just linger, because their loitering has costs of it's own, not limited to growing social unrest (this is partly why privatizing social security is such a horrible idea -- the market might fail and the state will still have to bail out people's private pensions or risk unrest, probably gaining nothing but added uncertainty in the long term).
Our system just might function optimally when its set up to let people choose to fail, as some surely will, and to make it just painful enough to encourage moving one's self out of poverty.
Playing devil's advocate here. A shift like this would seem to have very little margin for error.
"that they could spend on education, or applying for jobs, or starting new businesses."
Your difficulty would be to ensure the realisation of the benefit, and that there actually are jobs available that provide for these people.
I would prefer to approach the same issue in the reverse fashion, providing a job/ education with housing and minor allowances, requiring that the person start and complete a certain amount of work before any monetary incentive is provided. Available office space could be used, old buildings fallen into disuse can be repossessed to allow startup businesses some working space. This way you actually guarantee some economic value and proper utilisation of the funds. What you would end up with is the government incorporating businesses that mimic private enterprise, have stricter rules and hire from a different pool of people.
If I were homeless and or couldn't afford education, all I need is a warm bed, hot shower, library card, three square meals and google. (Not some arbitrary handout I would not be able to allocate properly, or in effect be compelled to spend unwisely because I know not the value of working for it.) The idea of a basic income is flawed if it allows comfortable survival without working, no different from communal distribution.
All that being said, I'm not American. What do I know.
Your difficulty would be to ensure the realisation of the benefit, and that there actually are jobs available that provide for these people.
I would prefer to approach the same issue in the reverse fashion, providing a job/ education with housing and minor allowances, requiring that the person start and complete a certain amount of work before any monetary incentive is provided. Available office space could be used, old buildings fallen into disuse can be repossessed to allow startup businesses some working space. This way you actually guarantee some economic value and proper utilisation of the funds. What you would end up with is the government incorporating businesses that mimic private enterprise, have stricter rules and hire from a different pool of people.
If I were homeless and or couldn't afford education, all I need is a warm bed, hot shower, library card, three square meals and google. (Not some arbitrary handout I would not be able to allocate properly, or in effect be compelled to spend unwisely because I know not the value of working for it.) The idea of a basic income is flawed if it allows comfortable survival without working, no different from communal distribution.
All that being said, I'm not American. What do I know.
The problem is we need less government intrusion not more we don't need hoops and red tape, red tape costs more, i simply purpose a guaranteed basic income so people who really need help don't feel like charity cases, charity cases act like charity cases because they have no hope for anything better.
What's your goal, what do you want to achieve with this? Raise awareness? Promote the idea? Eventually apply this?
Also, you are based in the US, I understand? What's the number of bucks you'd say is the right amount for this? Do you reckon that's something easy to agree on?
Hope my questions are not mistaken for disagreement or criticism, I'd be all in for this if it was to be done thoughtfully.
Also, you are based in the US, I understand? What's the number of bucks you'd say is the right amount for this? Do you reckon that's something easy to agree on?
Hope my questions are not mistaken for disagreement or criticism, I'd be all in for this if it was to be done thoughtfully.
Raise awareness, get bipartisan politicians on board, raise funds to get public support.
Entrepreneurs will have more expendable income and time freedom to go out and start something awesome.
The icing on the cake is that it won't cost anymore than we're currently spending, and a lot of sound studies point to the fact that it could actually end poverty once and for all!
I'm wanting to get some bright minds together to start an initiative to get the ball rolling.
Here are some phases: 1 : Build website/media channels to get the word out and explain in idiot-proof terms what it is, and why people should talk to their congressmen about it.
2 : Get politicians on board--as far as I can tell, this is something that MANY libertarians are behind, lots of democrats, and even conservatives like. It's a NON partisan issue, which means if we can get a respectable member from each party on board we could build some strong momentum.
3 : Collect donations to get the word out, and collect signatures in support of the initiative, and build an email/mail congress system to contact politicians and get the word out.
If you're onboard, send me an email : [email protected]