Citizen's dividend experiment run by Rumsfeld and Cheney

[Pointedstick]

What's interesting is that this all seems to boil down to demographics and real production, as usual.

Imagine an island with 1,000 senior citizens, each with an annual helicopter-drop income of $25,000. Absent trade links, the money is useless and they have nothing to buy until some of them start working to provide things to their contemporaries. Some large fraction of the senior citizens is just not gonna want to work for money, preferring hobbies and relaxation. In this situation, there is an excess of purchasing power and a dearth of real goods.

But if that island consists of 1,000 healthy 25 year-olds, it's not hard to imagine that very soon there will be a thriving economy as each of them starts working and making stuff to occupy their time and get some of everyone else's purchasing power. In fact, the 20-something island probably doesn't even need the helicopter drop at all. Given some starting distribution of money, it will very quickly flow through their little society.

Today the ratio of old people to young people is really skewed in many industrialized countries. I wonder if the baby boomers all dying will resolve the issue, or whether it will become permanent as each generation has fewer children than their parents did.


http://www.statcan.gc.ca/pub/91-003-x/2 ... 97-eng.htm (Canada, but probably the same in the USA)

People living in advanced countries just don't have a lot of babies.

[Maddy]

#3 is the status quo as more and more people become dependent on government programs. The helicopter drop already happened: it's called Social Security, Medicare, Medicaid, and public employee pensions.

PS, at the risk of going slightly off topic, how do you see the obviously unsustainable public pension debacle ending, particularly in places where the government is not a currency issuer and the pensions can not be reduced due to constitutional law?

With the pensioners dying off in the next in 10-30 years. Their younger peers don't have the sweetheart deals that they got, because it's politically and constitutionally feasible to reduce future employees' future benefits. The cities and states just have to stay solvent for a few more decades and the problem solves itself.

Hey, if they can subordinate bond holders to union members with the stroke of a pen, I'm quite sure they're capable of making those pesky pension obligations disappear.

[Pointedstick]

Hey, if they can subordinate bond holders to union members with the stroke of a pen, I'm quite sure they're capable of making those pesky pension obligations disappear.

Actually, in a lot of cases they're not. Especially in Illinois. They've tried! But the IL Supreme Court smacks them down because it's literally written into the state constitution that pension holders always come first in the budget and pension obligations can't be diminished in any way.

[WiseOne]

I think part of the idea behind the "open borders" policies has been that Latin American immigrants, between their younger ages and higher birth rates, will shore up the younger demographic and help keep the Social Security/Medicare system alive. The problem of course is that they are in no position to contribute meaningfully. FICA tax on a minimum wage job doesn't amount to much, and no PS, you don't pay income taxes if you're below the poverty line. If anything, you get your FICA back and then some because of the refundable Earned Income tax credit.

UBI/Citizen's Dividend in the US is a pipe dream, anyway. You can't have it until you get rid of birthright citizenship. If a UBI ever looks like it will pass without this prerequisite, immediately buy stocks of international airlines. They'll literally double their flights with the number of pregnant women visiting the US. For the cost of a plane ticket and a short hospital stay, their baby will get a lifetime income. Sweet deal.

[Maddy]

The effect of “refundable” tax credits, according to the data published by the IRS in Figure F of its report, is that the entire class of tax filers earning under $30,000 in 2014 collectively paid a net negative in federal income taxes.

http://www.cnsnews.com/news/article/ter ... taxes-2014

[Pointedstick]

I agree with all this, but I think there is another possibility: Seniors will discover that life without earning isn't the life they want; they'll discover that their years of experience in life and business allows them to produce value in society for a decade or two longer than the current expectation. That's what I expect to see, at least among a sizable percentage of Seniors. After their standard wage slave career ends, they'll be overflowing with creativity and will go and create rather than simply consume.

I see that too... but not for money, in economically remunerative fields.

[Pointedstick]

Dumb comma placement. I meant that even if they keep busy, senior citizens rarely seem to earn much money from their pursuits. I guess it's because they don't have to. But if they did, how many would want to work in, say, construction?

[Mountaineer]

Dumb comma placement. I meant that even if they keep busy, senior citizens rarely seem to earn much money from their pursuits. I guess it's because they don't have to. But if they did, how many would want to work in, say, construction?

Almost all of the senior citizens (a.k.a. retired) I know either occupy their time by working as volunteers (no pay) for church, charity, hospital, or philanthropic organizations, or are furthering their education by attending and/or teaching classes at their church or the local college extension for 'life long learning' - or some combination of the above. Very few of the older folks (greater than 70 or so) I know work in any type of physically demanding roles - bodies wear out and hurt too much for that regardless of how fit one is at 60 or 70. I agree that older people create much value for society - without monetary compensation but with great rewards for themselves and those they cheerfully serve.

[AnotherSwede]

The retirees I know don't do shit.

[WiseOne]

Dumb comma placement. I meant that even if they keep busy, senior citizens rarely seem to earn much money from their pursuits. I guess it's because they don't have to. But if they did, how many would want to work in, say, construction?

Almost all of the senior citizens (a.k.a. retired) I know either occupy their time by working as volunteers (no pay) for church, charity, hospital, or philanthropic organizations, or are furthering their education by attending and/or teaching classes at their church or the local college extension for 'life long learning' - or some combination of the above. Very few of the older folks (greater than 70 or so) I know work in any type of physically demanding roles - bodies wear out and hurt too much for that regardless of how fit one is at 60 or 70. I agree that older people create much value for society - without monetary compensation but with great rewards for themselves and those they cheerfully serve.

Absolutely! Actually most of the people I know in their 80s and 90s do plenty - just not for a lot of pay. My mom tells a great story about how the church front desk ladies got her and my father together for a first date, and now she does that same job (at age 81). She's always telling me how busy she is. Similarly, at my workplace there's a small collection of retired professors in their 80s and 90s who attend lectures, sitting in the front row and asking questions, and hold educational sessions for residents. At my coop, retired residents serve as board or committee members, and arrange the monthly chamber music concerts and poetry readings and such.

I have a friend who is an early retiree, and she manages to stay busy also - in fact she complained to me the other day about how over-committed she is, between singing in a chorus, serving as a member of the New York Food Board (where she's almost single-handedly saving the city's food carts from regulatory destruction by our favorite mayor), and other things. I'd asked her about taking on another project that I as a fully-employed person could not possibly do: figure out how to turn a nearby vacant lot into a community garden.

Somehow I doubt most people would just stay home and watch TV.

[Pointedstick]

Somehow I doubt most people would just stay home and watch TV.

The people who stay home and watch TV in retirement are the people who did that in their working lives. Not exactly the cream of the crop, but we all have a skewed view.

[AnotherSwede]

so I'm not sure how this is really different than welfare.

Sounds mostly like a state lottery.

A single person could receive up to $16,989 per year. A couple could get up to $24,027 annually.

This would of course lead to more single housholds (if it was not a time limited experiment).

And when they do a time limited study people will not act the same way as they would if they really believed the money we're for life.

[WiseOne]

If they haven't removed the perverse incentive not to work that was the entire problem with welfare payments to begin with, then this is not really a Citizen's Dividend. In order to be that, it has to be given blind to income, education level, social status etc. We did welfare payments before and decided they are a bad idea, so I'm not sure what these "experiments" are aiming to prove. Also, Swede is right - it will only be effective if it's permanent.

The fact remains, though, that until we get rid of birthright citizenship and get control over immigration, the Citizen's Dividend will be nothing more than a pipe dream in the U.S.