Switzerland referendum on citizens dividend

[doodle]

Stone would be pleased http://www.nytimes.com/2013/11/17/magaz ... .html?_r=0

[goodasgold]

Citizens of Alaska receive an annual payment derived from royalties for oil production in their state.

Decades ago massive payments were made to the various Inuit and Native American corporations in Alaska. Some of the money was invested wisely, but much of it has vanished.

[Kshartle]

Where is the government supposed to get this money?

[Pointedstick]

Where is the government supposed to get this money?

I imagine they will simply make it up, just like all the money the Swiss government spends. They will simply poof it into existence with a few mouseclicks. Poof!

And yes, if taxes do not rise and most of the money is spent domestically, I would expect this to lead to some serious inflation.

[Kshartle]

Where is the government supposed to get this money?

I imagine they will simply make it up, just like all the money the Swiss government spends. They will simply poof it into existence with a few mouseclicks. Poof!

And yes, if taxes do not rise and most of the money is spent domestically, I would expect this to lead to some serious inflation.

Does it matter if it's spent domestically? If they use it to buy up imports, that would result in lower value for the Franc and a higher value for the desired currency right? This inflation "exporting" only works for the dollar since it's the reserve currency and petro-backed.

If the Swiss do this they are dumber than I thought when they pegged to the Euro.

[Gumby]

Where is the government supposed to get this money?

I imagine they will simply make it up, just like all the money the Swiss government spends. They will simply poof it into existence with a few mouseclicks. Poof!

And yes, if taxes do not rise and most of the money is spent domestically, I would expect this to lead to some serious inflation.

Does it matter if it's spent domestically? If they use it to buy up imports, that would result in lower value for the Franc and a higher value for the desired currency right? This inflation "exporting" only works for the dollar since it's the reserve currency and petro-backed.

If the Swiss do this they are dumber than I thought when they pegged to the Euro.

I think you might be right about that. If a foreigner winds up with a Swiss Franc, they'll just trade it for their own domestic currency and I'm guessing that the Swiss Franc will probably be repatriated pretty easily. It's not quite like dollars that tend to get saved up by foreigners and foreign governments.

Though, I think Switzerland has a trade surplus right now and probably doesn't want their currency to appreciate (so that exports stay affordable to foreigners). Pegging to the Euro, as dumb as it is for savers, probably makes it easier for the Swiss to export.

[Kshartle]

I imagine they will simply make it up, just like all the money the Swiss government spends. They will simply poof it into existence with a few mouseclicks. Poof!

And yes, if taxes do not rise and most of the money is spent domestically, I would expect this to lead to some serious inflation.

Does it matter if it's spent domestically? If they use it to buy up imports, that would result in lower value for the Franc and a higher value for the desired currency right? This inflation "exporting" only works for the dollar since it's the reserve currency and petro-backed.

If the Swiss do this they are dumber than I thought when they pegged to the Euro.

I think you might be right about that. If a foreigner winds up with a Swiss Franc, they'll just trade it for their own domestic currency and I'm guessing that the Swiss Franc will probably be repatriated pretty easily. It's not quite like dollars that tend to get saved up by foreigners and foreign governments.

Though, I think Switzerland has a trade surplus right now and probably doesn't want their currency to appreciate (so that exports stay affordable to foreigners). Pegging to the Euro, as dumb as it is for savers, probably makes it easier for the Swiss to export.

And harder to import. Since exporters have concentrated power they usually get preferential treatment from governments over the importing masses. It's like this just about everywhere. Every major government is engaged in the currency war. The winner of this war is the one that kills themselves the fastest.

[doodle]

Where is the government supposed to get this money?

I imagine they will simply make it up, just like all the money the Swiss government spends. They will simply poof it into existence with a few mouseclicks. Poof!

And yes, if taxes do not rise and most of the money is spent domestically, I would expect this to lead to some serious inflation.

If the swiss economy is producing at below its maximum capacity, why would printing money lead to inflation?

Couldn't we make the argument that technology which displaces workers is disinflationary? Maybe printing money will simply stabilize prices and allow for private sector demand of products whose production no longer requires paying a wage to someone.

Kshartle, you are constantly making the assumption that economic efficiency is the ONLY goal of an economy. Please realize that there are other goals like social stability, and a feeling of worker satisfaction that factor into things. The goal of any social system is not just to produce more, there are other goals that are important as well. The most productive and efficient economy in the world might also be a social hell hole. 

Anyways, lets say through an amazing leap in innovation businesses are able to totally automate themselves. In other words, lets imagine a world like the Jetsons.....what other option is there but for the government to print money? When wages disappear, capitalism falls apart.

[Kshartle]

Where is the government supposed to get this money?

I imagine they will simply make it up, just like all the money the Swiss government spends. They will simply poof it into existence with a few mouseclicks. Poof!

And yes, if taxes do not rise and most of the money is spent domestically, I would expect this to lead to some serious inflation.

Couldn't we make the argument that technology which displaces workers is disinflationary? Maybe printing money will simply stabilize prices and allow for private sector demand of products whose production no longer requires paying a wage to someone.

Technology that replaces more expensive labor does lead to lower prices. This is a good thing. Making things more expensive than they otherwise would be by letting politicians print the currency and spend it on whatever they want....how can this help everyone let alone be moral (it is theft of purchasing power from people who earned the paper legitimately)?

[Kshartle]

Where is the government supposed to get this money?

I imagine they will simply make it up, just like all the money the Swiss government spends. They will simply poof it into existence with a few mouseclicks. Poof!

And yes, if taxes do not rise and most of the money is spent domestically, I would expect this to lead to some serious inflation.

If the swiss economy is producing at below its maximum capacity, why would printing money lead to inflation?



Kshartle, you are constantly making the assumption that economic efficiency is the ONLY goal of an economy. Please realize that there are other goals like social stability, and a feeling of worker satisfaction that factor into things. The goal of any social system is not just to produce more, there are other goals that are important as well. The most productive and efficient economy in the world might also be a social hell hole. 

I've never made this assumption. This is nonsensical. Economies don't have goals. Individuals have goals. What you're talking about is organizing the economy to acheive the goals that the masters decide upon. Why do you think politicians attempting to overrule the market with violence to acheive their goals will lead to a better society?

This is all we ever have.....groups of individuals trying to force people to so what they want them to to achieve their goals. We hope that the masters will be so wise that they somehow know better for us what we need to do to be happy. The notion that this could ever work is delusional and flies in the face of our knowledge of human behavior. Even if the people in control of the violence were brilliant and loving they would still not be mind readers. They would still not know for certain what people wanted and the only means at their disposal would still be to take from one to give to another.

[Kshartle]

Anyways, lets say through an amazing leap in innovation businesses are able to totally automate themselves. In other words, lets imagine a world like the Jetsons.....what other option is there but for the government to print money? When wages disappear, capitalism falls apart.

As far as I remember George still had a job in the Jetsons. I think you're suggesting a future where there isn't a single need that goes unmet in society and no human effort of any kind is required to do anything of value to anyone....it's all supplied by machines. I hope you can see how this is impossible.

[doodle]

Technology that replaces more expensive labor does lead to lower prices. This is a good thing

Not when it eliminates that laborers ability to produce and provide for themselves. I think you forget that 50% of Americans have below a 100 IQ. You are not cognizant of the fact that we are leaving a huge number of people behind to languish without any respectable means of earning a living wage. This is socially destabilizing (which by the way, social destabilization eventually also leads to a loss of productivity) and demoralizing. Step outside of your genius environment sometime and interact with the other half of Americans that weren't blessed with the same grey matter that you carry between your ears.

[doodle]

I've never made this assumption. This is nonsensical. Economies don't have goals. Individuals have goals.

Tragedy of the commons.....

[whatchamacallit]

I am at the point where I think this is a good idea.

If you are going to have welfare, then make it fair by giving the same to all. If your not going to have welfare, then the homestead act needs to be brought back so you can at least have the opportunity to provide for yourself.


The way I see it, it really isn't a question of there being enough currency to give out. It is a question of if there is enough resources in food and housing or whatever else this currency is meant to guarantee.

If there is not enough resources to begin with, then neither a citizen salary or welfare will ever work.

[Kshartle]

The point is when you steal from group A to give to group B, group A decides to produce less and less since they don't benefit from it and group B grows and grows. Humans prefer play to work and they definately don't like working for free. The result is less production and more poverty.

The welfare schemes don't eliminate poverty they exacerbate it. Despite the massive productivity gains from computers and technology in 50 years the percentage of Americans in poverty has increased. The government is actually having to borrow every cent it hands out to the dependants at this point. How long do you think it can keep that up? What happens to all those baby birds who are completely dependant when it can no longer steal or borrow enough to keep them fed and clothed?

best line from Harry Browne - Government breaks your leg, hands you a crutch and says "look what I did for you!"

[moda0306]

The point is when you steal from group A to give to group B, group A decides to produce less and less since they don't benefit from it and group B grows and grows. Humans prefer play to work and they definately don't like working for free. The result is less production and more poverty.

This isn't necessarily true.

If a rich guy wants a $50,000 boat and can't afford it, he may very we'll work harder and produce more since he'll have to earn $80,000 gross to get the boat.

[goodasgold]

George Bernard Shaw was an unpleasant human being in a lot of ways, but he hit the nail on the head when he wrote: "Any government that robs Peter to pay Paul can count on the support of Paul."

[Kshartle]

The point is when you steal from group A to give to group B, group A decides to produce less and less since they don't benefit from it and group B grows and grows. Humans prefer play to work and they definately don't like working for free. The result is less production and more poverty.

This isn't necessarily true.

If a rich guy wants a $50,000 boat and can't afford it, he may very we'll work harder and produce more since he'll have to earn $80,000 gross to get the boat.

Yeah and the other 99/100 just don't get the boat. Are you  trying to suggest that by taking an increasing amount of people's income the more earn it encourages them to earn more?

If I whip everyone person who comes over to my house there might be an exception and someone who likes getting whipped will show up often but I think it's pretty dog gone obvious I'm not going to have a lot of visitors. The point is you can always try to figure out some kooky exception to an economic principle but that's all it is......a kooky exception and considering it is a waste of time. Thinking that stealing the fruits of people's labor will somehow cause them to produce more is kooky...ahhh but I guess that's just my opinion .

you don't seem to understand how good it is for us to have the rich taxed and the middle class squeezed out... how else can you explain the power house economy's in N.Korea, Cuba, Venezuela, the former USSR etc... the people thrive and prosper with a good whipping... its human nature

[moda0306]

The point is when you steal from group A to give to group B, group A decides to produce less and less since they don't benefit from it and group B grows and grows. Humans prefer play to work and they definately don't like working for free. The result is less production and more poverty.

This isn't necessarily true.

If a rich guy wants a $50,000 boat and can't afford it, he may very we'll work harder and produce more since he'll have to earn $80,000 gross to get the boat.

Yeah and the other 99/100 just don't get the boat. Are you  trying to suggest that by taking an increasing amount of people's income the more earn it encourages them to earn more?

If I whip everyone person who comes over to my house there might be an exception and someone who likes getting whipped will show up often but I think it's pretty dog gone obvious I'm not going to have a lot of visitors. The point is you can always try to figure out some kooky exception to an economic principle but that's all it is......a kooky exception and considering it is a waste of time. Thinking that stealing the fruits of people's labor will somehow cause them to produce more is kooky...ahhh but I guess that's just my opinion .

It's not about people liking "being whipped," it's about whether the nature of the whip will make them choose to work more or less.

This is why we could have 50%-90% tax rates in the past and still have a growing economy. 

But at least you're getting good at separating your opinion from fact for us .

[Pointedstick]

It's not about people liking "being whipped," it's about whether the nature of the whip will make them choose to work more or less.

This is why we could have 50%-90% tax rates in the past and still have a growing economy. 

But at least you're getting good at separating your opinion from fact for us .

Keep in mind that those 90% tax rates were for the top marginal bracket which only touched income that was the modern equivalent of like 10 million dollars or something.

But as Kshartle has said a few times in some recent threads, "it works until it doesn't." At a 20% gross tax rate, maybe most people will still think, "ah well, I'll just work a little harder and save for longer." At a 30% gross tax rate, one could expect more people to peel away and say, "fuck it, I didn't need that thing anyway." But the problem is that this is all just rank speculation, and there's no way of knowing what rate causes most people to drop out. Is it 90% of gross wages? 80%? 70%? The only way to know is to accidentally do it.

Another thing to consider is tax evasion. At higher tax rates, people devote more of their resources to evading taxes--resources that could have been spent on producing actual value, which would actually result in more tax revenues. Taxes are a terribly difficult balancing act for governments, and I think liberal-minded folks like to imagine that they have far less impact on people's decision-making process than they really do. Even liberal icon Jon Stewart owns his three mansions through trusts.

[RuralEngineer]

There's something to be said for the "captive population" factor as well.  Back when we had much higher marginal rates the world was less interconnected and there were more barriers to packing up and relocating to a tax haven.  That's no longer the case and there have been quite a few very high profile instances of the super wealthy giving up their citizenship to avoid excessive taxation recently.  It's not hard to imagine that such cases would be significantly more common were rates even higher.

[Kshartle]

Another thing to consider is tax evasion. At higher tax rates, people devote more of their resources to evading taxes--resources that could have been spent on producing actual value, which would actually result in more tax revenues.

Such a good point. That's why I cringed when people were critical of Romney for paying low taxes. Even though he's a sucky human....he had to sacrifice gains for lowering taxes. This lowers eveyones living standards because capital is not invested efficiently since maximum efficiency is taxed higher.

Is it better for the economy if you buy a business or buy a stupid muni bond?

[moda0306]

Another thing to consider is tax evasion. At higher tax rates, people devote more of their resources to evading taxes--resources that could have been spent on producing actual value, which would actually result in more tax revenues.

Such a good point. That's why I cringed when people were critical of Romney for paying low taxes. Even though he's a sucky human....he had to sacrifice gains for lowering taxes. This lowers eveyones living standards because capital is not invested efficiently since maximum efficiency is taxed higher.

Is it better for the economy if you buy a business or buy a stupid muni bond?

I'm not saying taxes aren't a drain, but we have to put it in context.  How damaging are taxes, really?  Especially considering that people who

And if that muni bond went to improving infrastructure in a congested area, it may have been one great use for those funds, especially if it's employing otherwise-idol resources in the economy.

Unless of course you're waiting for the Galtian revolution where the private sector runs the freeway/road system .

[Kshartle]

Unless of course you're waiting for the Galtian revolution where the private sector runs the freeway/road system .

I'm not holding my breath waiting for humans to stop trying to solve problems with violence.

People investing in muni bonds because the expected after-tax return is higher than a corporate bond with similar risk is a missallocation of capital. Capital has gone to the less productive investment because of taxes.

Maybe it's easier if you look at it this way......The after-tax return of riskier muni bond can be the same or higher than a taxable corportate bond. Capital is being over allocated to something risky because of taxes. Riskier things are more likely to fail. Failure is a waste of resources. Wasting resources makes everyone in total poorer.

It's very hard to measure how bad this is to the economy but it's very clear that it is. 

[moda0306]

Kshartle,

So I assume you think equities are significantly propped up by the tax code as well, as the deferral and rates within them gives them a far-higher tax advantage?

Oddly, though, most wealth is held in tax-deferred accounts that would never invest in munis... so I almost wonder whether it put them at a disadvantage in some ways.

Maybe we should go back to the days where labor, not capital, got preferetial tax rates.