Switzerland and Guaranteed Income--Would it work here?

[GandK]

What happens?

You have a nation with at least $20,000.00 more debt per individual

Very likely!

[Felix]

You can't just start in the middle of the Maslow pyramid with "autonomy, mastery and purpose" for people who work 3 minimum wage jobs.

http://www.simplypsychology.org/Hierarchyofneeds.jpg

Yes, a shift from basic needs to needs higher on the pyramid is a good thing. But don't put the cart before the horse. You need to have the base needs met to be able to focus on the higher needs in the first place. And security comes right after food and shelter. Freedom is a euphemistically used word for many contradictory things.

Calling a lack of security freedom and equating it with its opposite, the freedom to meet the higher needs because you have that security just seems contradictory to me.

My argument is helping and incentivizing people to figure out how to become more free is the single most important key to happiness, and, tangentially, how that freedom is earned is VERY important.

Do you really think relying on the "external authority" of the government to send checks is going to enhance the population's feelings of freedom/autonomy, mastery, purpose?

Yes, having a safety net to provide for basic needs would actually enhance people's ability to reach for the needs higher on the Maslow pyramid.

That's why Norway, Denmark and Sweden are at the top of the list of happiest countries.

http://www.forbes.com/sites/christopher ... untries-2/

Or is it possible, that the same money could be used in a much more useful way, where people WORK to develop the skills that earn autonomy, mastery and purpose.

If you need people to work, a basic job guarantee. One could easily come up with jobs that would provide more autonomy, mastery and purpose than the ones offered by Walmart, the biggest employer in the US.

The question is why work needs to be profitable employment. There is more autonomy, mastery and purpose in learning to play the guitar than being told to wipe the floor by your superior.

Work is yet another word with two definitions:

1. being actively engaged in meeting a goal you set yourself
This goes in line with the "autonomy, mastery and purpose" definition. And people will always do this, basic money guarantee or not.

2. an act of production one is forced to do out of economic necessity
This doesn't.

[RD]

Help me out here.

Is there anything that will stop retailers from slowly increasing their prices such that the people on basic income end up right back to where they were (the bottom 10% or something)?
Especially on the basic necessities.

In Singapore, there was a roll out of some child care incentives to promote the declining birth rate, the next moment many (all?) child care centers raised their monthly fees and the end result is that the "cushioning" became thin or non-existent.

[Felix]

The basic income simply redistributes money, so it cannot be inflationary overall. The money would go equally to everyone, so what people buy with the extra money would vary. I think an effect on real estate prices is possible.

[chicago81]

Help me out here.
In Singapore, there was a roll out of some child care incentives to promote the declining birth rate, the next moment many (all?) child care centers raised their monthly fees and the end result is that the "cushioning" became thin or non-existent.

I think something very similar has happened in the United States with respect to education/university expenses.

[Riggerjack]

Help me out here.

Is there anything that will stop retailers from slowly increasing their prices such that the people on basic income end up right back to where they were (the bottom 10% or something)? Especially on the basic necessities.

Since this money should be replacing money already being redistributed, the inflation overall would be minimal. There would be some price inflation in consumer goods(Xbox and carrots) and some reduction in capital goods ( skyscrapers, Xerox's) . However, since this is already happening, nobody would notice most of it. The biggest net losers would be social workers and administration from the 126 social agencies already doing this work.
economically, the plan would probably work. The real problem is containing its growth.

[RD]

@Riggerjack: Containing the growth of ? If you happen to be talking about the amount of basic income, it seems related to what I'm worried about in my original post.

[Seneca]

What if you have a nation of consumers.

Now imagine you have a nation of consumers plus $10,000.00

What happens?

You have a nation with at least $20,000.00 more debt per individual

Invest in check cashing businesses, and low cost bankruptcy attorneys, the first place this idea manages to get implemented?

[Seneca]

You can't just start in the middle of the Maslow pyramid with "autonomy, mastery and purpose" for people who work 3 minimum wage jobs.

One minimum wage job will sustain an entire family if they had more skills than just consumerism. Jacob lays it out in his book, and MMM shows it as well.

Current welfare programs are all over the map in the US, but generally, the core programs try to reinforce behaviors that will ultimately help get individuals out of poverty by tying certain actions to learning basic skills and doing the right things. Learning to shop for decent, wholesome foods, getting education, requiring you to look for a job, various other healthy behaviors etc.

Yes, a shift from basic needs to needs higher on the pyramid is a good thing. But don't put the cart before the horse. You need to have the base needs met to be able to focus on the higher needs in the first place. And security comes right after food and shelter.

Again, I'm not. My argument is not for less help to those in "poverty", it's that we should focus on making sure basic needs are met while using it as a chance to teach skills. Basic income is the exact opposite direction!

We need to do a better job than the current system linking behaviors to disbursements to encourage people to move in the right direction in their lives and move up Maslow's, not regress down Maslow's by further addicting them to government sponsored consumerism, and removing any of influences/requirements compelling people who are struggling to do better.

Yes, having a safety net to provide for basic needs would actually enhance people's ability to reach for the needs higher on the Maslow pyramid.

That's why Norway, Denmark and Sweden are at the top of the list of happiest countries.

The Silicon Valley alone has more people and more GDP than Norway or Denmark. You cannot compare an economy as large and diverse as the US to countries smaller than several of our cities. The differences are far more varied than just social nets.

If you need people to work, a basic job guarantee. One could easily come up with jobs that would provide more autonomy, mastery and purpose than the ones offered by Walmart, the biggest employer in the US.

The question is why work needs to be profitable employment. There is more autonomy, mastery and purpose in learning to play the guitar than being told to wipe the floor by your superior.

Again, my argument is not to deconstruct systems to help those in need, it's that basic income is an awful way to do it, probably even worse than what we already have, for the recipients, which is goin' some.

Maslow's is a hierarchy, which is where I'm coming from.

None of us enters the world with a skillset that earns enough money, and has enough worldly knowledge to meet our needs. We get there by learning a combination of life skills, some of which translate into higher paychecks, some that enhance lifestyle by meeting needs without money. We have to work our way up. It's this way with anything.

There is nothing wrong with wiping floors, and toilets for that matter, it is a job that needs doing. As I worked my way up Maslow's, I started, in fact, wiping floors and toilets in my family's janitorial business. I learned a ton from this, so much my wife and I discuss how we'd replicate similar experiences for our son.

One of the opportunities that was directly attributable to wiping floors was how I learned the trade of auto repair...I started out wiping the floors and toilets in an auto repair facility in trade for use of their shop and help from the owner. Now I had two marketable trades, janitorial work, and automotive repair. Guess what, now I was more free, I had more ways to earn money, and I could fix my vehicles. Both of these jobs were then used to fund my engineering degree, my parents offered no financial support. Graduating then allowed for bigger steps when my marketplace skills were combined with higher order skills learned in my formal education.

Even starting at the bottom, working on basic life skills offers far more dignity, possibility, and freedom, than learning to play the guitar and waiting for manna to fall from heaven.

[Felix]

What if people do not want to be molded according to your ideal? What if they find more freedom and dignity in playing the guitar than wiping floors for others?

On the one hand you talk about how you are for freedom, but when it comes to poor people somehow this doesn't seem to apply anymore.

Give them money and then they are free to do with it as they wish? Freedom? No nanny state and government intervention? The free market can offer these people all sorts of training and job opportunities and they are free to choose, to vote with their dollars now that they finally have some?

No!

They need to be properly trained "to reinforce behaviors that will ultimately help get individuals on a path off by tying certain actions to learning basic skills and doing the right things. Learning to shop for decent, wholesome foods, getting education, requiring you to look for a job, various other healthy behaviors etc." That is as paternalistic as can be.

There's nothing wrong with offering programs like this voluntarily, but for someone who says he wants more freedom from the government, this is a strange attitude to take. Or does that freedom only apply to those who make use of these now properly trained poor people?

On a basic income, they can still learn a trade or two, they even don't lose all their benefits once they start a low-skilled job, which removes a major incentive to stay on welfare. But if they learn to live within that budget, they would also be free not to work until they find decent work.

It would be a nice incentive for companies to make sure that they provide jobs allowing for autonomy, purpose and dignity.

[Seneca]

INFLATION- From the BI article Felix posted-

Thus, giving each working-age American a basic income equal to the poverty line would cost $2.14 trillion. For some comparison, U.S. GDP was almost $16 trillion in 2012 and the defense budget was $700 billion.

But a minimum income would also allow us to eliminate every government benefit as well. Get rid of SNAP, TANF, housing vouchers, the Earned Income tax credit and many others. Get rid of them all. A 2012 Congressional Research Service report found that the federal government spends approximately $750 billion each year on benefits for low-income Americans and that rises to a clean trillion when you factor in state programs. Eliminate all of those and the net figure comes out to $1.2 trillion needed to pay for a universal basic income, still a hefty sum.

Where that $1.2 Trillion dollars came from would in part dictate how inflationary this was. If that money came from savers, causing net savings to go down and consumption to increase in the country, it would be inflationary overall. A likely outcome I'd guess.

In the US in particular, stuff you can buy at Wal Mart would inflate in price regardless of who that extra $1.2trillion was confiscated from.

[Seneca]

Felix, there are ridiculous amounts of student aid in the US where the poor can choose to go to school and end up paid for doing it. Anyone can go to school extremely inexpensively in our community college system.

They need to be properly trained "to reinforce behaviors that will ultimately help get individuals on a path off by tying certain actions to learning basic skills and doing the right things. Learning to shop for decent, wholesome foods, getting education, requiring you to look for a job, various other healthy behaviors etc." That is as paternalistic as can be.

Absolutely. The poor in the United States are poor due to a lack of skills, overwhelmingly the (involuntary) poor come from a shitty home life where they didn't get the skills they needed to successfully fly on their own when they left the nest. (*)

You and I are discussing two choices for the poor in the richest nations (a key point):

1) Give them money, hope for the best.(**)
2) Cause people to "work" for the money, design the work to help them.

Jacob alluded to the biggest problem with my proposal in his post, we try to pretend everyone is equal, at the government level this is enforced with extreme prejudice.

There's nothing wrong with offering programs like this voluntarily, but for someone who says he wants more freedom from the government, this is a strange attitude to take. Or does that freedom only apply to those who make use of these now properly trained poor people?

We both agree, there are people we want to see the government offer to help. No matter the structure, none of these people who choose to go on government assistance are going to be free from the government while dependent on them for their income. (BI is variously proposed as both a payment to everyone, and a payment only to those below a certain income)

My belief is that government assistance to those in poverty should have the aim of taking direct action in causing those we help to move toward not needing that help. The reason I think this is critical is that these people are where they are because they do not have the skills they need to live atthe level you and I wish they did. I find it unlikely these people will en masse use Basic Income to go procure these skills, I think it most likely they use the funds very poorly if the hope is that they are to rise above the need for assistance. (**)

In part because, the basic income creates a much deeper welfare trap than the very real one we have today by reducing the marginal utility of low skilled work further.

It would be a nice incentive for companies to make sure that they provide jobs allowing for autonomy, purpose and dignity.

That's not up to companies, it's up to individuals.

*- Ignoring mental illness and other disabilities

**- After handing out cash to even an a much more at risk population, the victims of Hurricane Katrina, the government found widespread misuse of the funds. One of the recommendations after studying the result was:

Ensure that any future distribution of IHP debit cards includes instructions on the proper use of IHP funds, similar to those instructions provided to IHP check and EFT recipients, to prevent improper usage.

http://www.gao.gov/new.items/d06655.pdf

[Felix]

Poverty is systemic and not due to individual mistakes. Sure it hits the weakest links, but that they are hit in the first place is not their fault. It's like a sick game of musical chairs.

Trying to "train the poor" so they have "wealthy skills" is an ignorant and arrogant act of control and blaming the victim. And it is incompatible with any libertarian thought.

It's a strange idea of freedom to force poor people into underpaid menial jobs to the obvious benefit of others. To call it help on top of that is cynical.

When you have a systemic above-25% unemployment rate after a recession, as you have in Greece right now, is that because these people don't have wealthy skills all of a sudden? Do they need to be trained what to buy? Or do they just need money to pay their bills until the economy gets back on its feet and the job creators are finally willing to do their own job.

[Seneca]

Poverty is systemic and not due to individual mistakes. Sure it hits the weakest links, but that they are hit in the first place is not their fault. It's like a sick game of musical chairs.

It is in part systemic, but there sure as hell are individual mistakes that lead to poverty as well.

Trying to "train the poor" so they have "wealthy skills" is an ignorant and arrogant act of control and blaming the victim.

If I blamed the poor for their station, I'd say just kill all government assistance, not try to look at the fundamental problems that created the need. I reject the assertion they are poor only because they don't have money, in part because of what we all come to this forum to study.

And it is incompatible with any libertarian thought.

I don't really care if my political beliefs are consistent with a label, including "libertarianism".

However, libertarianism requires citizens with a high enough level of skill to take care of their own needs within a market economy system. The level of skill required by our economy is both increasing and changing, which is going to create losers. I propose we figure out how to help them get the skills they need because ultimately that will make them happier than giving them a check to shut up.

It's a strange idea of freedom to force poor people into underpaid menial jobs to the obvious benefit of others. To call it help on top of that is cynical.

Underpaid is a completely relative term. There is no absolute.

Again, job skills are a heierarchy. If someone's skills are currently only a match for menial work, there is nothing wrong with starting there. You can certainly be well paid for menial work as well, and it is work that needs to be done. My dad has earned a middle class income my whole life mopping floors, but he started out low paid first to figure out the business first.

People enter the economy at all different levels, this is impossible to change. What we can change is the availability of the individual to change themself if they want to.

When you have a systemic above-25% unemployment rate after a recession, as you have in Greece right now, is that because these people don't have wealthy skills all of a sudden? Do they need to be trained what to buy? Or do they just need money to pay their bills until the economy gets back on its feet and the job creators are finally willing to do their own job.

We are discussing the US and Switzerland, we do not have the systemic problems of Greece.

if we want to talk about how to best make sure a population can survive changes that are big, sudden and dramatic like economic collapse, we come back to a point I've made in the past when discussing BI, Taleb's notion of fragility. An economy with individual actors that have increased reliance on "external authority" like the government for income is much more fragile than one where it's actors have been going about the messy business figuring out how to adapt to the market on their own.

I personally think we intuitively understand fragility in our lives, which is exactly why people feel more secure and happy if they're figuring out how to live on their own rather than waiting for an "external authority" to issue scrip.

[jacob]

Introducing now in the left corner, wearing blue trunks, we have a expert fighter, a brown belt in MMT from the Mosler Academy and trained in the collectivist fighting system, he argues for the interdependence of everybody usually blaming the system for individual failure.

Aaaaand in the right corner, wearing red trunks, a hard-hitting individualist from the school of hard knocks who started his career sweeping floors and since then fought his way to the top. He will argue for the independence of everybody and blame individuals for systemic failure.

Weighing in at a combined 1500+ posts in several dozen threads, albeit with a surprising zero knockouts, this match will be decided on points, again.

And here's the bell!! The fighters are circling each other.

[Felix]

If I blamed the poor for their station, I'd say just kill all government assistance, not try to look at the fundamental problems that created the need. I reject the assertion they are poor only because they don't have money, in part because of what we all come to this forum to study.

And I reject the notion that it boils down to skills. We learn how to go from middleclass to wealthy. Assuming the same game applies to poor unemployed people with no marketable skills is quite a stretch.

However, libertarianism requires citizens with a high enough level of skill to take care of their own needs within a market economy system.

Only the bastardisation of libertarianism that is the free market apologism it has been turned into in the United States. Ironically, the term has strong socialist roots.

You can't inflict total control on the poor subsection of the population and then launch a battlecry against government intervention in principle when they are supposed to be given the means to survive.

I don't really care if my political beliefs are consistent with a label, including "libertarianism".

Fair enough, but then you don't get to wear the "I defend freedom" badge with that attitude.

Since all my other examples are being disqualified right off the bat, there is a nice test of minimum income done in Canada, which I have linked to before and the results are better school attendance, better health, lower crime and a mere blip down in unemployment due to younger people staying in school longer and women with children prefering to take care of them - hardly negative outcomes. And all that without bossing the lesser people around.

An economy with individual actors that have increased reliance on "external authority" like the government for income is much more fragile than one where it's actors have been going about the messy business figuring out how to adapt to the market on their own.
I personally think we intuitively understand fragility in our lives, which is exactly why people feel more secure and happy if they're figuring out how to live on their own rather than waiting for an "external authority" to issue scrip.

Only that this is the direct opposite of what we can see across Europe.

[Felix]

Introducing now in the left corner, wearing blue trunks, we have a expert fighter, a brown belt in MMT from the Mosler Academy and trained in the collectivist fighting system, he argues for the interdependence of everybody usually blaming the system for individual failure.

Aaaaand in the right corner, wearing red trunks, a hard-hitting individualist from the school of hard knocks who started his career sweeping floors and since then fought his way to the top. He will argue for the independence of everybody and blame individuals for systemic failure.

Weighing in at a combined 1500+ posts in several dozen threads, albeit with a surprising zero knockouts, this match will be decided on points, again.

And here's the bell!! The fighters are circling each other.

Yeah, shit ... here we go again ...

But usually I am fighting at least two opponents, being the minority on the forum.

[Seneca]

Introducing now in the left corner, wearing blue trunks, we have a expert fighter, a brown belt in MMT from the Mosler Academy and trained in the collectivist fighting system, he argues for the interdependence of everybody usually blaming the system for individual failure.

Aaaaand in the right corner, wearing red trunks, a hard-hitting individualist from the school of hard knocks who started his career sweeping floors and since then fought his way to the top. He will argue for the independence of everybody and blame individuals for systemic failure.

Weighing in at a combined 1500+ posts in several dozen threads, albeit with a surprising zero knockouts, this match will be decided on points, again.

And here's the bell!! The fighters are circling each other.

Always liked sparring a worthy opponent, physically and/or intellectually.

[Felix]

http://www.remappingdebate.org/article/ ... s?page=0,0

Great article providing some context and background.

[sharpie]

I have been reading the posts and am curious as to how this would be done exactly? I mean... where is the money going to come from? Working class? Profits from business? Taxes? etc.. and if taxed - at what rate?

and then I have to ask what about when there are more ppl not working than working? Do taxes increase to make up for it?

also, I think it would be wise to consider the money supply of the program. I mean with a fiat type of currency there will always be debt... and inflation as a hidden tax.