jafs wrote:A question for citizen's dividend folks.
Let's assume that it's implemented, and everybody gets $15K/yr. What would you do if you got that?
I'd just put it in the bank or invest it - it wouldn't change anything else for me. Or I might give some to charity as well. In some circumstances, it might result in people just quitting their jobs and living on the cd.
First year: Fancy new standing seam metal roof
Second year: New high-efficiency HVAC system and solar panels, making the house net zero energy
Third year: New kitchen cabinets and counters (my cabinets are
literally falling apart), and any other misc. high-dollar home improvement projects that I've had on the back burner
Fourth year: In conjunction with selling my existing vehicle, a nice high-MPG, hybrid, or electric Japanese hatchback
Fifth year: Really nice long-overdue vacation, private school for kids if necessary, things like that
Etc.
You could argue that I could easily do all of these things right now. I easily have enough cash to do all of this stuff, like tomorrow. But the fact that I haven't reveals that these spending priorities are not deemed important enough to pursue at my current level of income/savings/wealth. The basic reason is that $15,000 a year in free money is worth $325,000 in investments. For ERE folks like me, saving it would be silly; spending it on things that need buying is much more impactful than just socking it away. It would take 25 years of investing the dividend to equal a yearly income from those investments of the same amount--and all for what? $30k of free money yearly instead of $15k? $30k is enough to make my family financially independent, but I could achieve the same thing much faster by spending the dividend and saving $325,000 myself. And I could keep saving beyond that and use the dividend to spend on things lower on the revealed preference scale that are nice-to-haves. Such a payment would probably reduce the drive among some to achieve an extremely high level of savings.
I would be hugely in favor of something like this--in conjunction with blowing away all the other programs, of course. I would no longer worry about quitting my job and having my family's healthcare situation deteriorate. This is a problem Obamacare was supposed to solve, but I've run the numbers and it simply doesn't work for us. My income would be so low that we'd have to be on Medicaid, where the service is slow and low-quality. The Obamacare marketplace is a joke since prices have gone up by double-digit percentages yearly and they're not really a very good deal to begin with; deductibles are very high, but monthly payments are not very small to compensate unless you qualify for huge subsidies, which in and of themselves are a gigantic disincentive to earn more so that you don't lose those subsidies. I periodically shopped around before Obamacare for private insurance and always saw a good assortment of cheap, high-deductible plans that looked like they made sense and had reasonable prices, but those don't seem to exist anymore.