We’ll begin with a reminder of a few facts:
- The U.S. federal government is Monetarily Sovereign. It has infinite dollars at its disposal. It never unintentionally can run short of U.S. dollars.
- Unlike state and local governments, the federal government is not funded by taxpayers. Instead, it pays all its bills by creating new dollars ad hoc.
- Even if the federal government did not collect a single penny in taxes, it still could continue spending as always.
- 37.9 million people are living in poverty in the U.S., according to 2021 Census Bureau figures.
- Congress is in a political battle over a meaningless — no, fraudulent — debt limit that handcuffs federal spending for no good reason.
Alan Greenspan: “The United States can pay any debt it has because we can always print the money to do that.”
Scott Pelley (On “60 Minutes”): “Is that tax money that the Fed is spending?”
Ben Bernanke: “It’s not tax money… We simply use the computer to mark up the size of the account.”
With the federal government having limitless financial resources, why does poverty continue as a persistent problem in America?
The U.S. Could Help Solve Its Poverty Problem with a Universal Basic Income
A universal basic income wouldn’t lead to adults leaving their jobs and could lift millions of children into a brighter future.
By Michael W. Howard on January 6, 2023, Scientific American Magazine
When the child tax credit, first established in 1997, was expanded for a year in 2021, it was a major political and social win for the country. The Biden administration’s decision not only added to the amount of the tax credit and converted the payment from a year-end lump sum to monthly payments; it also abandoned the work requirement for parents.
This immediately affected one third of all children in the U.S., including 52 percent of Black children and 41 percent of Hispanic children, whose families were formerly excluded because the parents earned too little to qualify for the tax credit. ,
The tax credit expansion lifted 3.7 million children out of poverty by December 2021 without significantly reducing parents’ work participation.
Then in January 2022, the expanded tax credit expired, which plunged 3.7 million back into poverty, with higher percentage increases in poverty among Hispanic and Black children.
The credit showed us that cash assistance could help families stay afloat and, contrary to some political beliefs, parents would not leave the labor system because of it.
The child tax credit expansion is one step toward a universal basic income that could eliminate poverty without increasing unemployment.
Providing a government-funded monthly payment to every individual would broadly lift them out of poverty while providing millions of children a better chance at a good education, improved health, and higher future earnings.
This payment would benefit millions and save hundreds of billions of dollars by reducing the social costs of poverty.
The question becomes: Can we convince our elected officials that poverty is not a moral failing but a social condition that can be addressed by establishing an income floor below which no one falls.
There is a widely held expectation that able-bodied adults should work for their income.
Empirical evidence from the means-tested minimum income experiments of the 1970s in the U.S. and recent analysis of a similar experiment in Manitoba, among other research, support the idea that few people actually stop working when they are simultaneously receiving a guaranteed income.
Such research also shows that those who stop working for wages do so for good reasons, such as attending school or taking care of young children, and that a modest guaranteed minimum income can enable people to work who otherwise could not.
The norm that every abled person receiving cash payments should be seeking a job can also be challenged.
First, holding a job is not the only form of work. Taking care of children and elders is work—work that is performed mostly by women without compensation.
A basic income is a way of supporting and recognizing that work without intrusive state monitoring and reinforcement of gendered division of labor.
Poverty negatively affects health and longevity, education, housing, law and crime, bigotry, supply and demand, GDP, scientific advancement, the environment, human motivation and well-being, and virtually every other economic issue.
Why, then, are we more interested in Hunter Biden’s business dealings and Donald Trump’s groping of women than we are in poverty when the cure for poverty lies within easy reach?
11 Pros and Cons of Universal Basic Income By Kishore Bhatt,
Last Updated on March 15, 2021, by Filip Poutintsev
A Universal Basic Income (UBI) is an unconditional cash payment given at regular intervals by the government to all residents, regardless of their earnings or employment status.
It isn’t clear from the article whether non-citizens or even criminals would be included or excluded. I suggest that every resident, legal or not, except only convicted felons in jail, receive the UBI.
No public purpose would be served by refusing to include non-citizens, as they have the same human needs and make the same contributions to the economy as citizens.
Pros and Cons of Universal Basic Income
The intention behind the payment is to provide enough to cover the basic cost of living and provide financial security.
The concept is also seen as a way to offset job losses caused by technology. In times of crisis, a UBI can also provide a social safety net with minimum admin costs.
For a Monetarily Sovereign government, administrative costs are irrelevant.
Different programs outline who exactly receives the income—some state that all citizens would get it regardless of what they make, while other programs may only give it to those who fall below the poverty line.
A universal basic income has three key components. It is universal – no citizen is excluded. Everyone gets the same assistance, irrespective of their gender, wealth, age, or occupation.
It is unconditional, that is, the transfer is done without any per-condition which means the recipient does not have to perform any task to be eligible for the income.
It is direct – money reaches the targeted beneficiary directly, without the involvement of any middleman.
It also should not be taxed by the federal government or by any state/local government.
Automation has fundamentally changed the structure of the world’s economy. Elon Musk said, robotics will take away most people’s jobs, so a universal income is the only solution. Here are some of the pros and cons of UBI:
Pros of Universal Basic Income
1. Reduces Poverty
A UBI is a program to be delivered in cash, unconditionally, and to everyone.
Namibia’s UBI program, the Basic Income Grant (trialed in 2007-2012), reduced household poverty rates from 76% of residents before the trial started to 37% after one year.
Child malnutrition rates also fell from 42% to 17% in six months.
Advocates for UBI believe that in some of the richest countries in the world, no one should be too poor to live. UBI would bring everyone’s income above the poverty line. It gives people enough money for their basic needs and necessities.
2. Fights Unemployment
With advanced technology taking over more and more blue and white-collar jobs, UBI would act as a security net for the millions of people who will be left jobless by the tech revolution.
The concept of UBI is also seen as a way to offset job losses caused by technology.
Some people argue that a universal basic income gives people the incentive to do the jobs that they want to do and not the ones that they have to do.
Also, workers could afford to wait for a better job or better wages.
3. Greatly Improves Work Incentives
Under existing arrangements, people may see their welfare payments reduced if they find work, gain promotion, work more hours, or gain better-paid work.
A critical reason “means-tested benefits” can be counterproductive. They decrease the net benefit of labor, especially at the lower levels.
Example: A person receiving $5,000 a month, only if he earns nothing, is less likely to accept a $6,000 a month job. His labors would earn him a net of only $1,000 a month.
People find themselves in a poverty trap — a poverty trap that has been created by the same system that is supposed to be helping them out of poverty.
Under a Basic Income system, however, people will no longer be penalized for finding work or working harder. Finding work or increasing their hours won’t result in any reduction in their Basic Income payments.
4. Provides Financial Security
Many of the jobs that we take for granted today are going to be gone in the future due to artificial intelligence, robotics, and other technology. People will be able to know that they will have enough money to meet their fundamental needs, even though their circumstances may change quite substantially.
In times of crisis, a UBI can also provide a social safety net.
5. Controls Discrimination
UBI guarantees an income for non-working parents and caregivers, thus empowering important unpaid roles, especially for women.
Those who suffer domestic abuse, mainly women, become trapped in violent situations because they don’t have the means to leave them. UBI would make leaving an abusive partner easier from a financial point of view.
6. Boost Self-Employment and Entrepreneurship
Somebody who wishes to work on new business ideas could use UBI income to support their initiative.
Even the most successful businesses often had a tough time making a decent profit in their early years. But to have a dynamic, enterprising economy, we need people to be able to take risks involved in starting a new business.
And UBI would enable more people to take those risks.
I’ll add to the “Pro” list:
7. The UBI dollars would be added to the private sector, increasing economic growth.
Economic Growth usually is measured by Gross Domestic Product (GDP).
GDP=Federal Spending + Non-federal Spending + Net Exports. Increased federal deficit spending mathematically must increase economic growth.
Obviously, UBI would require federal spending. It also would result in more non-federal spending by the people receiving UBI, which leads to:
8. UBI would stimulate business growth by enriching customers’ spending ability. In response, businesses would hire more, pay more, and provide better working conditions to attract workers.
9. UBI would help utilize America’s brainpower by making it possible for more people to be educated through high school, college, and beyond. Those are the people who would create the inventions, arts, sciences, and businesses that advance America.
Cons of Universal Basic Income
1. Decreases Motivation to Work
The biggest concern is that UBI would encourage millions of workers to stop working.
This is the false message about “paying people not to work.” Because the UBI would be given to everyone, it doesn’t pay people not to work. Work or not, everyone would be paid.
As the earlier article showed, the “stop working” dictum is false:
1. a If people aren’t working, there is less taxable income.
For the federal government, “taxable income” isn’t an issue. It neither needs nor uses nor even retains tax dollars. It destroys them upon receipt and creates new dollars, ad hoc, to pay its bills.
The problem here is that people will get money without doing anything. It may encourage people to be lazy and live off benefits.
Free income may not incentivize people to get jobs and could make work seem optional.
Sneering at the poor reflects the false belief that the poor are poor because they are lazy, and if they only would try harder instead of getting drunk, taking drugs, and lounging in front of the TV, they no longer would be poor.
Psychologically, this is how those who aren’t poor justify their better financial situations while exalting themselves in their own estimation. The reality is that the poor, on average, work harder in less gratifying jobs than those who have more income and wealth.
Everyone wants a better life. America is one of the world’s wealthiest nations. On average, Americans have more money than the residents of almost any other country. Even poor Americans often lead better lives than the average people in many other countries.
Yet we work.
Think about it: If people with money were disincentivized from working, we would be a nation of the unemployed. But we work because we want more and better no matter what we have.
That Chevy you once lusted for is no longer good enough. Now that you have more money, you’ll want a Lexus. If you make even more, you might want a Bentley, a Hawaiian vacation, and a second home in Florida.
The sum of human wants never is satisfied. The poor have even greater desires than the rest of us and are even more motivated to have more money to pay for those wants.
Giving a poor person extra money creates the taste for even more. So ingrained is the common myth of impoverished laziness that the author repeats it here;
2. Retards Economic Growth
If people get money without doing anything, it may encourage people to be lazy. Some people may choose to work part-time instead of full-time.
Others may leave the labor force for years when they would have otherwise worked. If people transition away from full-time work, the economy will suffer.
UBI has the potential to directly decrease the growth of the economy, namely GDP growth, through reductions to labor force participation.
#1 and #2 repeatedly have been proven wrong.
3. Highly Expensive
The best argument against UBI is its feasibility. UBI has been seen as a flawed idea, not least because it would be prohibitively expensive unless accompanied by deep cuts to the rest of the safety net.
Sacrificing all other social programs for the sake of a UBI is a terrible idea. According to a study, the cost of implementing UBI in the United States is estimated to be about 3.9 trillion annually.
The figure varies depending on whether children are included and at what benefit level. So, UBI is either very expensive or very stingy.
The authors, Bhatt and Poutintsev, must be ignorant of Monetary Sovereignty.
The federal government has infinite spending dollars. Whether the cost is $3.9 trillion a year or $39 trillion, the government could create and spend those dollars with just a touch on a computer key.
The federal debt has risen from about $50 billion in 1940 to about $ 30 TRILLION this year, and at no time has the government ever had difficulty paying its bills.
Taxes aren’t the issue. The government simply creates the dollars to do it. Always has. Always will.
The UBI can be considered “very expensive” (depending on how that term is defined), but there never is a reason for it to be “stingy.”
As you ponder that, your thoughts may turn to inflation, which we will discuss after we review point #4,
Is it necessary to give the same amount of money to billionaires as those born into poverty?
Universal Basic Income (UBI) takes money from the poor and gives it to everyone, increasing poverty and depriving the poor of needed targeted support.
UBI takes money from no one, not the poor or rich. Federal finances are different from state/local government finances. Federal taxes do not fund federal spending.
Federal taxes remove money from the private sector (aka the economy). They are economically recessive. Federal spending adds money to the economy and is economically stimulative.
While federal taxes go to the U.S. Treasury, where they are destroyed, state and local tax dollars go to banks, where they are recirculated and remain in the M2 money supply. State/local taxes are neither recessive nor stimulative, and state/local government spending likewise is neither recessive nor stimulative.
The federal government does not spend taxpayer dollars. To pay for things, the federal government creates new dollars ad hoc, and these dollars grow the economy.
UBIs are less cost-effective than targeted welfare programs because many people lack more than just cash.
Some proponents have suggested UBI could be restricted to certain populations and only allowed for those who are below the poverty line.
“Targeted” welfare programs come with the implicit belief that government knows what is best for each family and can provide individualized solutions.
I suggest the best course is to give people money and allow each person or family to determine their own best use of that money.
5. High Tax and Inflation
There is a question, what gets cut to fund UBI? The answer is the cost of a universal basic income will have to be met through higher taxes. That will lead to higher taxes to pay for the benefits.
That would increase poverty and inequality rather than reduce them.
This question is based on ignorance of Monetary Sovereignty. The federal government has the infinite ability to pay any amount while not collecting any taxes at all. Nothing needs to be cut to fund UBI.
If everyone suddenly received a basic income, it would create inflation.
Inflation will be triggered because of increased demand for goods and services. There won’t be an improved standard of living in the long run because of inflated prices.
The above is based on the false belief that federal spending causes inflation. There is no evidence of that ever happening.
All inflations through history have been caused by critical goods and services shortages, notably oil and food. While giving people money will cause an increase in demand for many products, it also causes an increase in supply as manufacturers respond.
The two above graphs demonstrate that federal deficit spending has not caused inflation, but oil shortages have.
The concept of UBI has been under debate for some years in global forums. The main advantage is that it ensures a minimum income standard for everyone.
Opponents of UBI say that it does not reduce poverty, deprives the poor of needed targeted support, provides a disincentive to work, and weakens the economy.
The opponents are demonstrably wrong. UBI absolutely would reduce poverty by providing the poor with money.
Giving money to the poor and allowing them individually (instead that a government bureaucrat) to determine how best to use it is the best form of “targeted support.”
Like all of us, the poor want more in life than just enough dollars to afford to laze at home rather than work. It is a terrible myth, fostered by the rich, that the poor are inherently lazy, unambitious slugs with no desire for improvement.
The UBI would strengthen the economy by adding dollars to the GDP and improving business sales.
The Remaining Question
That UBI works cannot be doubted. Medicare, Social Security, the earned income tax credit, and the child tax credit are relatives of UBI that have successfully reduced poverty and increased overall GDP.
The federal government easily can afford any level of UBI.
Alan Greenspan: “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”
Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
Statement from the St. Louis Fed: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”
The remaining question is: How much UBI should the federal government provide?
The U.S. economy and the economies of individuals in the U.S. comprise what in mathematics is known as a “level two chaotic system.”
A chaotic system is a dynamic system highly influenced by its beginnings. A chaotic system can’t be explained because it’s impossible to see how all its variables interact. There are two kinds of chaotic systems: level one chaotic systems and level two chaotic systems.
A level-one chaotic system is not affected by predictions we make about it. For example, the weather is a level one chaotic system. We can make predictions about the weather tomorrow, but those predictions don’t have the ability to change the weather tomorrow.
A level two chaotic system is affected by predictions we make about it. For example, the oil market is a level two chaotic system. If we predict that the price of oil will increase from $90 a barrel today to $100 a barrel tomorrow, traders will buy a bunch of oil today to benefit from the rise in price tomorrow. But this action increases oil prices today, changing the price of oil tomorrow.
Similarly, politics is a level two chaotic system. If someone were to have predicted the Arab Spring and told Egypt’s President Mubarak that a revolution was imminent, he would have taken action to prevent it, perhaps lowering taxes and increasing government handouts.
In doing so, he likely would have prevented the Arab Spring, nullifying the original prediction.
Level two chaotic systems are inherently unpredictable.
The classic example of chaos is the “butterfly effect,” wherein a butterfly flapping its wings in Brazil causes a hurricane to damage the coast of North Caroline.
Economics is highly chaotic because it blends two chaotic systems, business, and psychology. Thus, while economists make predictions and are eager to point to successful forecasts, the fact is that forecasting success is, at best, intermittent.
That said, while I feel sure that any level of UBI would reduce poverty and grow the economy, caution is the best approach to uncertainty.
One thought would be to give each man, woman, and child in America $1000 per month — $12,000 per year — tax-free. That would add about $4 trillion to the economy.
Federal spending totaled $4.4 trillion in 2019.
The $1000 would be on top of whatever is received from Medicare, Social Security, and other benefit programs.
After the first year, Congress could evaluate the program’s effectiveness in lifting the poor and growing the economy.
There is no valid reason not to do it. It’s how America can regain its moral and economic leadership.
Rodger Malcolm Mitchell
Twitter: @rodgermitchell Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
15 thoughts on “Do you favor a Universal Basic Income? Pro, Con and Chaos”
That was a long hard read. It was very thorough, and very informational, but most blog readers refuse to read more than 3 – 4 minutes on a single post. Whether it is laziness, ADD, or a wandering mind, I don’t know, but this is a truth of blogging and blog reading. This post, meaning no disrespect, even made me pause for breath a few times.
I will not reblog this one, though I will direct people here so that interested readers can take a look. The rext will be up to them.
As for UBI, which we in Canada call a Guaranteed Minimum Income (GMI) I am and always have been in favour of it. But Anti-Socialists (read Capitalists) have spent billions on convincing regular people that poor people are lazy and would prefer not to work — why else are they poor! As you said in your post this is a fallacy, but people believe it nonetheless. It is going to take teaching, not just facts, to change their minds. Humans love having others to look down on in order to prop them up!
I have a hard time imagining that even if the government does have monetary sovereignty the whole system isn’t going to come crashing down at some point. How can the government just continue to print money indefinitely? Why do we have the performative politics about the debt ceiling if the government can’t run out of money?
Then from the consumer side: human nature being what it is, I can only imagine the disaster it would be to give a UBI to someone in addiction or recently out of it, someone who has idea of how to handle money, people who are willing to appropriate money meant for others for themselves.
Of course addicts and those in systemic poverty need money but it seems like there would have to be some sort of education? Limits on what it can be spent on? I’m not sure how that could happen. I’ve just seen what chaos can happen when an addict gets his hands on some cash.
I do agree with the concept of a UBI but have some serious reservations about what the pros and cons would be from a human personal standpoint.
Question: “How can the government just continue to print money indefinitely?”
Answer: What would stop it?
Question: “Why do we have the performative politics about the debt ceiling if the government can’t run out of money?”
Answer: As you said, it’s performative politics to make voters believe the politicians are “prudent” and to widen the Gap between the rich and the rest, on behalf of the rich.
Comment: “I can only imagine the disaster it would be to give a UBI to someone in addiction or recently out of it, someone who has idea of how to handle money, people who are willing to appropriate money meant for others for themselves.”
Response: So you don’t want to help the poor because some might be addicts or ignorant about money?
Comment: “I’ve just seen what chaos can happen when an addict gets his hands on some cash.”
Response: “They spend it on drugs, and die young.” Is that your reason for not helping the poor?
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Great post Rodger. UBI/Universal Dividend perfectly aligns with the new monetary paradigm of Gifting. Pair it with my 50% Discount/Rebate policy at retail sale and it changes everything. A $1000/mo. UBI enables people to purchase $2000/mo. of goods and services or $24,000/year. It also doubles the purchasing power of earned income thus making it even less likely that people will quit working.
Because retail sale is the terminal ending point of the entire economic process where production exits the economy and becomes consumption, it is also the terminal expression point for all relevant economic factors…like inflation for instance. We’ve never had anywhere close to 50% y/o/y inflation which is what would be required to happen just to have 0% actual inflation, and if one does the research on hyper-inflations they can see that 3-4 absolutely disastrous things, all of which are easily avoided, have to occur first so that argument is just another false orthodoxy.
Furthermore, with everyone having at least $24k/yr purchasing power why would we need payroll taxes for welfare, unemployment insurance and eventually even social security.
There are many other policies, regulations and tax incentives and disincentives in my book that stabilize the new paradigm. I would be happy to send you free Rodger. Just send me you email address to firstname.lastname@example.org
I do not favour a UBI because while it is a good idea in theory it is beset with political problems.
Milton Friedman and the Austrian School like the idea of a UBI because it would replace all other benefits and support but would be much easier to label as a “hand out” for “scroungers”.
Thereby the UBI could be reduced to less than current benefits with less political resistance.
I favour a Job Guarantee program.
Anyone who wants a job can have a government job (maybe administered by local government) at a living wage.
Inflation can be countered with an unemployment buffer or an employment buffer.
Setting a JG minimum wage is an excellent price anchor, much more effective than an unemployment buffer which pays people to do nothing. An inherently inflationary policy.
Every day of productivity lost to the economy is a day of productive work that can never be recovered.
The neo-liberals don’t like the Job Guarantee because it creates a free market for labour where labour can choose not to work for the private sector at slave wages.
The problem is that there is a rigged market for labour.
A free market in Labour would be one where both parties are free to set & offer prices.
A market where either participant is forced by diktat or circumstance to accept less than the other party is willing to offer is NOT a free market.
A free market in Labour would be one where the person offering employment offers that employment at a price that makes their effort & investment & risk, worthwhile.
That would be a fair market. The person offering employment, sets a price they are happy to pay.
An unfair market would be one where the person offering employment can set a price lower than they are happy to pay due to circumstances which FORCE the person seeking employment to accept a lower price.
In real terms, it matters not whether that circumstance is armed government agents forcing them at gunpoint or a surplus of labour.
The labours value to the employer IS THE SAME regardless of the price paid.
If the worker is forced to accept less than the value of his labour for the employer, then the market for labour is not fair.
So… if you can engineer unemployment you can capture more of the profit from labour for yourself by not having to pay what you actually are willing to pay but instead what the employee is forced to accept.
It is as simple as that.
Thank you for your comments, Wilson. I have written many times about the MMT Jobs Guarantee, so I won’t repeat the comments here. You may see my arguments here: https://mythfighter.com/2021/10/30/mmts-divorce-from-reality-jobs-guarantee-and-inflation-fear/
If you search the word “guarantee” in the blog search box, you will find all the past discussions of the Jobs Guarantee, which by the way, would have no use at all now, as there is a shortage of labor.
Won’t the AI robots economize by lowering the number of people when they eventually take over?
Yes. That may be the straw that breaks the blocking of UBI — when enough people are without jobs and it becomes clear that being poor is not a moral issue but an economic one. By the way, though it commonly is called “UBI” I’ve been calling it “Social Security for All.” That makes it less radical. All we need to do is change the requirements for a program we already have.
How can they receive income without being made to do pointless tasks on the Job Guarantee?
Some portion of the MMT cheerleaders most excited about the prospect of a JG are tankies https://rationalwiki.org/wiki/Stalin_apologetics#Tankies with a serious hard on for what Pol Pot did emptying the cities in 1975 sending everyone out to work on the land for a few years. https://en.wikipedia.org/wiki/Year_Zero_(political_notion)#Year_Zero_of_Cambodia
https://en.wiktionary.org/wiki/entryism works; worked good for the hostile actors who infiltrated the disorganized Trump campaign in 2015/16
Sadly, the unspoken belief of MMTers is that the poor should be grateful to receive any employment that gives them money, no matter how onerous or, as you say, pointless.
That is why I recommend “Social Security for All” which takes government overlords out of the equation. Just give the people money, and don’t demand control over their lives.
Surely nothing would go wrong if you corralled together a bunch of people [mostly without the needed skills and sent them out to build something like a new railroad in a wilderness area. https://en.wikipedia.org/wiki/Shock_construction_project
My grandma’s father turned 50 in 1937 in a tent camp on a cold rainy day while working on a WPA project. She always said he described it as being much like his father had described being a lowly conscript in the Prussian Army [during the Bismarck years] before emigrating. Just have a feeling that wouldn’t go over too well with how different most people are today from how they were three, four, five generations ago.
A Czech software engineer I knew some years ago would tell ridiculous Initiative Z stories about what transpired between party officials and cranky people in his hometown every Saturday while growing up in the 70’s & 80’s https://en.wikipedia.org/wiki/Action_Z
“In the late 1980s when the planned economy was in the latest phase of its struggle, even technically advanced projects were attempted to be progressed by sending numbers of unskilled volunteers to help under the umbrella of Initiative Z. However, the lack of skills among volunteers was often counter-productive, and faulty results of volunteer work, although well-hidden, regularly led to even longer delays. Many participants recalled being ordered to perform “busy work”, such as having to move a large pile of sand from one spot to another 20 meters away with shovels and wheelbarrows, just to witness it being relocated by a machine to its original location the next day.”
As I frequently have told my MMT friends, “There is no shortage of jobs. There are many millions of jobs being advertised. They just aren’t the right jobs. What makes you think a government bureaucrat will find the right jobs for millions of people in every village and hamlet in America?”
Tellingly, I never have met an MMTer who would accept a job found by a federal bureaucrat.
I love your insight, your website, and your knowledge.
But I have a couple questions I don’t know how to answer hopefully you have time to answer them or maybe do a whole post on them.
Printing money and devaluing the dollar, I have a friend asking me, Obama did this on purpose through quantitative easing. Purpose was to drive down the dollar to compete with China. Why won’t the value of the dollar also effect inflation?
1. Obama was an economics illiterate egged on by other economics illiterates.
2. Quantitative Easing (aka Fed buying T-securities on the open market) is a way of adding dollars to the private sector. Contrary to popular myth, it doesn’t drive down the dollar and doesn’t cause inflation.
3. The question is, why would the U.S. government want to compete with the Chinese government? The U.S. government has infinite dollars, so what is the purpose of competing? If the purpose was to help the U.S. economy, that could be accomplished by cutting taxes.
The government does a lot of strange stuff that supposedly accomplishes specific goals (i.e. increasing interest rates to fight inflation), that really are done for political purposes, to demonstrate “doing something.”
Printing money does not devalue the dollar. Money is not like other commodities, where having more translates to less marginal demand. Having more money does not translate to less marginal demand for money. It actually can translate to more marginal demand for money as richer people hoard more dollars than poorer people who need to trade money for goods and services.
Amen to that! I agree with you, albeit with two possible caveats:
1) For people *currently* living here illegally *before* the UBI program were to begin, I would be fine with “grandfathering” them in and letting them receive it. Anyone with an SSN or a TIN would be eligible. However, it would probably be a wise idea to exclude (or at least delay) anyone who enters the country illegally *going forward* so as to discourage people from coming *just* for the free money. That would also take the wind out of the sails of one of the biggest right-wing objections to UBI, and make it much easier to pass.
2) $1000 per month for everyone regardless of age would a good idea, though half that amount ($500 per month) for children under 18 would also be reasonable as well. There are pros and cons to both options IMHO.
Otherwise, you are 100% spot on, Rodger. So what are we waiting for?