Citizen's Dividend

[jafs]

'Fess up, you just want some of that "government cheese"

True story - an acquaintance of mine lived in NY back in the 80's, and his phone # was mistakenly printed in a NYT article as the number to call for the government cheese program. He got a lot of calls about it, and people didn't believe it was the wrong number. Eventually he just started asking people how much cheese they wanted instead of getting into an argument about it.

It took a while before the NYT printed a correction.

[jafs]

Investing could have a direct connection to productivity, if you invested some money directly with a company starting out, or lent people money to start a business, etc.

And, savings could have a connection, if banks used deposits to generate loans - but you guys have browbeaten me plenty about how that's not actually the case

[Pointedstick]

Lower income folks aren't going to be investing like that, almost certainly - they'll be spending it, which is fine economically. But the goal of increasing their productivity, lessening the dependence on government, etc. seems uncertain to me, especially if the amounts are higher than subsistence level, which you seem to prefer.

Everyone's income is someone else's spending. The generated productivity comes when they spend the money on stuff that constitutes demand for what other people produce, and vice versa.

[jafs]

Sure, that makes sense.

But, I thought the idea of the cd was to improve the recipients' productivity directly, so the thought was that low income folks wouldn't just get it and spend it.

Current programs like food stamps/subsidized housing do the same thing economically, right?

[Pointedstick]

Sure, that makes sense.

But, I thought the idea of the cd was to improve the recipients' productivity directly, so the thought was that low income folks wouldn't just get it and spend it.

Current programs like food stamps/subsidized housing do the same thing economically, right?

Sort of. Food stamps is better, but subsidized housing distort the real estate market in an area and often does more harm than good in the aggregate.

The theoretical advantages of a citizen's dividend are multifaceted: it replaces a series of government bureaucracies and social programs; has near-zero overhead associated with it; cannot easily become the target of fraud and abuse; does not create any perverse incentives not to work; and is actually fairer and more humane than the current safely net, which is a complicated system that can be capricious and challenging to navigate.

[MachineGhost]

Investing and saving don't generally improve productivity, certainly not directly, and only under some narrow circumstances, indirectly. Except for ipo's, the stock market is virtually all a "secondary market" - money/stocks are just moving from one person to another, and none of it goes to the company any more.

I specifically didn't mention the secondary market because it doesn't have any direct effects, so don't bring that up.

Gold is complex - I imagine that much of it is also a secondary market, but I don't know for sure. In some circumstances, investments in precious metals and the like sometimes involve supporting brutal dictatorships in other countries (blood diamonds come to mind).

Well, you imagine wrong; gold isn't an investment, its a commodity so someone is always profiting from transactions. And you're really reaching to make an association between blood diamonds and gold. All the surface level, easy to get at gold nuggets is long, long gone unlike blood diamonds.

[MachineGhost]

Lower income folks aren't going to be investing like that, almost certainly - they'll be spending it, which is fine economically. But the goal of increasing their productivity, lessening the dependence on government, etc. seems uncertain to me, especially if the amounts are higher than subsistence level, which you seem to prefer.

Why are you so fixated on the CD recipient increasing one's personal productivity instead of that of others? That is not how capitalism works. You invest or pay others as the inducement for them to increase their productivity for mutual benefits. You only increase your own if you're selling something or want your first job or a better job. The point of the CD is to provide a floor so you can take risks like that. Taking risks is how you improve productivity.

[MachineGhost]

Does anyone think our benevolent government would actually close departments and shrink? History tells us otherwise. Government is like a Hydra. You cut off one head [department] and two more grow in its place.

Maybe not at the formal agency level, but government employees are not immune from technological unemployment either. And the CD will actaully pave the way for getting rid of those parasites.

The CD seems almost like the holy grail in what it can accomplish for "Starving the Beast".

[jafs]

Sure, that makes sense.

But, I thought the idea of the cd was to improve the recipients' productivity directly, so the thought was that low income folks wouldn't just get it and spend it.

Current programs like food stamps/subsidized housing do the same thing economically, right?

Sort of. Food stamps is better, but subsidized housing distort the real estate market in an area and often does more harm than good in the aggregate.

The theoretical advantages of a citizen's dividend are multifaceted: it replaces a series of government bureaucracies and social programs; has near-zero overhead associated with it; cannot easily become the target of fraud and abuse; does not create any perverse incentives not to work; and is actually fairer and more humane than the current safely net, which is a complicated system that can be capricious and challenging to navigate.

Well, I guess it depends on what you mean by subsidized housing - Section 8 housing means that the government pays some of the rent for the tenant, if I understand it right. So it wouldn't matter if we gave people money they spent directly on that or if the government did it, from an economic benefit analysis.

I agree it would be simpler, although not as simple as suggested, if adjustments are made for differences in costs of living, and if WiseOne's idea of tax/revenue neutrality was enacted.

One could argue that giving money to people that don't need it, like you and me, is by definition fraudulent in some ways. And I can guarantee that any system we put in place will generate some people trying to scam the system - that just seems like human nature to me.

It has the same effect on working or not working for low income people, if they can live off of the cd.

I agree about the complexity and difficulty of navigating the current system.

[jafs]

Investing and saving don't generally improve productivity, certainly not directly, and only under some narrow circumstances, indirectly. Except for ipo's, the stock market is virtually all a "secondary market" - money/stocks are just moving from one person to another, and none of it goes to the company any more.

I specifically didn't mention the secondary market because it doesn't have any direct effects, so don't bring that up.

Gold is complex - I imagine that much of it is also a secondary market, but I don't know for sure. In some circumstances, investments in precious metals and the like sometimes involve supporting brutal dictatorships in other countries (blood diamonds come to mind).

Well, you imagine wrong; gold isn't an investment, its a commodity so someone is always profiting from transactions. And you're really reaching to make an association between blood diamonds and gold. All the surface level, easy to get at gold nuggets is long, long gone unlike blood diamonds.

You said investing improves productivity - the kind of investing most of us talk about is investing in the stock market, which is a secondary market. If you meant you'd invest directly in a start up business, that's a different story. But it's not part of the pp investments, which involve stock market index funds. So if you took your $15K and invested in your pp, there's no direct connection to companies.

It depends again on what kind of gold investments - most people on here buy gold coins. So if I go into my dealer and buy some coins, then hold them for a while and sell them back to him/her, isn't that a secondary market? It's a bunch of coins trading hands just like stocks do, not somebody buying gold bullion from a mine in South America.

I remember when people were upset about buying South African Kruggerands, don't you?

And, please don't tell me what to discuss in my posts - I don't do that to you.

[jafs]

Lower income folks aren't going to be investing like that, almost certainly - they'll be spending it, which is fine economically. But the goal of increasing their productivity, lessening the dependence on government, etc. seems uncertain to me, especially if the amounts are higher than subsistence level, which you seem to prefer.

Why are you so fixated on the CD recipient increasing one's personal productivity instead of that of others? That is not how capitalism works. You invest or pay others as the inducement for them to increase their productivity for mutual benefits. You only increase your own if you're selling something or want your first job or a better job. The point of the CD is to provide a floor so you can take risks like that. Taking risks is how you improve productivity.

Because that's one of the basic stated goals of it from the presentation on here.

People say lower income folks will now get a job, because they don't have perverse incentives not to work.

I just don't see that happening much, if the dividend is high enough to live on (in your version it's substantially higher than in WiseOne's).

[jafs]

.

[jafs]

Does anyone think our benevolent government would actually close departments and shrink? History tells us otherwise. Government is like a Hydra. You cut off one head [department] and two more grow in its place.

Maybe not at the formal agency level, but government employees are not immune from technological unemployment either. And the CD will actaully pave the way for getting rid of those parasites.

The CD seems almost like the holy grail in what it can accomplish for "Starving the Beast".

And where will all of those formerly employed people work?

[clacy]

After thinking about this some more,.... I think a CD would likely result in inflation, which would essentially adjust prices to account for the CD.

I think the net result would be that intelligent, hard working people would make good decisions with their CD money, such as investing it, starting businesses, using it for education, etc.

People that don't have the ability to make good decisions would generally make poor decisions with it.

Likely there would be little to no effect on wealth distribution, but we could sleep well knowing that there was a basic safety net for people at least.

[WiseOne]

After thinking about this some more,.... I think a CD would likely result in inflation, which would essentially adjust prices to account for the CD.

Maybe but not necessarily. I don't think increased spending is all it takes to create inflation. For that you need an expansion of the money supply, which the CD would not do. It's going to shift spending from funding government bureaucracy to consumer goods and investment. That may increase some prices but it would be a giant shot in the arm for the GDP, so salaries should rise as well.

Except for jaf of course, since he doesn't need it :-)

[jafs]

Maybe not at the formal agency level, but government employees are not immune from technological unemployment either. And the CD will actaully pave the way for getting rid of those parasites.

The CD seems almost like the holy grail in what it can accomplish for "Starving the Beast".

And where will all of those formerly employed people work?

They won't need to work, because they will be receiving a citizen's dividend.

Even better!

[jafs]

After thinking about this some more,.... I think a CD would likely result in inflation, which would essentially adjust prices to account for the CD.

Maybe but not necessarily. I don't think increased spending is all it takes to create inflation. For that you need an expansion of the money supply, which the CD would not do. It's going to shift spending from funding government bureaucracy to consumer goods and investment. That may increase some prices but it would be a giant shot in the arm for the GDP, so salaries should rise as well.

Except for jaf of course, since he doesn't need it :-)

Ha ha

A rise in prices accompanied by a rise in salaries is still inflation, isn't it? It's just inflation + a rise in salaries. If purchasing power stays constant, then it's not any different than before.

And, government employees spend their money on the same stuff the rest of us do, don't they? They buy consumer goods, and if they have extra money, maybe they invest it as well.

[jafs]

How many on here would use a cd to invest directly in start-up businesses or make loans directly to them?

It's not something I'd be likely to do, personally.

[Xan]

A rise in prices accompanied by a rise in salaries is still inflation, isn't it? It's just inflation + a rise in salaries. If purchasing power stays constant, then it's not any different than before.

Except that there's a lot more purchasing power at the "bottom" than there had been before. Isn't that something the left normally salivates over? Don't you think that's fantastic?

[MachineGhost]

One could argue that giving money to people that don't need it, like you and me, is by definition fraudulent in some ways. And I can guarantee that any system we put in place will generate some people trying to scam the system - that just seems like human nature to me.

Today's non-need, is tomorrow's need. Be careful what you wish for. Medical bankruptcy is still a problem nowadays, despite ObamaCare.

[WiseOne]

I'm curious. How do you scam a system that pays out a fixed amount to each American citizen?

The point is to reduce scamming by making the rules much, much simpler. "Scam" is what currently happens in large handfuls at every government welfare program in existence.

[Pointedstick]

Claim fake children, perhaps?

[MachineGhost]

You said investing improves productivity - the kind of investing most of us talk about is investing in the stock market, which is a secondary market. If you meant you'd invest directly in a start up business, that's a different story. But it's not part of the pp investments, which involve stock market index funds. So if you took your $15K and invested in your pp, there's no direct connection to companies.

I was pretty clear in how I defined investing and didn't refer to the PP definition, so you're making up a strawman. Nor did I bait you. I'm smart enough to understand secondary markets are bullshit for direct value creation.

It depends again on what kind of gold investments - most people on here buy gold coins. So if I go into my dealer and buy some coins, then hold them for a while and sell them back to him/her, isn't that a secondary market? It's a bunch of coins trading hands just like stocks do, not somebody buying gold bullion from a mine in South America.

It doesn't take much -- if any -- productivity to issue financial assets as they're created out of thin air. But to get a commodity the value has to be transferred all the way down the totem pole to the mining worker at the bottom. He has to get paid to dig it out and any/all tools that makes his job easier will improve his productivity and that of society's.

I remember when people were upset about buying South African Kruggerands, don't you?

Not sure what you're referring to. Over apartheid? No one was forced to buy Krugerrands, though. Blood diamonds was more of an unknown thing until that movie came out. Does that mean I shouldn't ever buy any Krugerrunds minted before apartheid was abolished?

And, please don't tell me what to discuss in my posts - I don't do that to you.

Well, you seem to keep bringing up strawman arguments about things I didnt say, so its getting a little tiring. Read what I say as literal and don't infer anything beyond that. It's a little different between me joking about you being a "token liberal" and you miscontruing what I've said.

[MachineGhost]

I just don't see that happening much, if the dividend is high enough to live on (in your version it's substantially higher than in WiseOne's).

Well maybe you better research the effects of welfare currently. It has similar effects like the CD would when you exclude the massive "losers" like Detroit, West Virginia, etc. which is a cultural issue not one of money.

I just advocate that the dividing line is between low class and lower middle class. I don't know exactly what the amount would be. The focus shouldn't be on the amount anyway, but getting people out of poverty and eliminating all of the social negatives it has on everyone. Do we have to limit the CD to extreme poverty only? It'll be like $15K to me, not that useful and they probably won't work because it just moves them from extreme poverty to less extreme poverty. There has to be an incentive to take risks and it seems to me like there is a sweet spot for that in terms of income. Not too high, not too low. In other words, we want people in the lower class to come out of the shadows and the biggest way that happens is they get a job and join the larger social community.

BTW, being impoverished is a constant and stressful risk. It doesn't leave room to take on anymore.

[MachineGhost]

And where will all of those formerly employed people work?

Beats me, but I sure hope they will work on more productive jobs than being parasites draining the taxpayer. That's what so wonderful about the CD. It's a win-win for everyone!