I thought that the article was rather well thought through until reaching this:
What if the way to achieve the strongest possible economy is to give every citizen more money to spend? For example, what if we gave every citizen of the United States $25,000 to spend? $25,000 sounds impossible the first time you hear it, but consider the possibility.
Putting aside the laugability of the idea of a capitalist government giving each person a years worth of middle income wage for a moment - it would be great if
Price inflation would happen. But it would be a huge equalizer. If we assume that $25,000 is the current household average, then giving every household another $25K will double the amount of money in the economy, hence we will assume the doubling the price of all goods and services (not the 250x increase you propose).
Now that everything costs twice as much, the person getting by on $10000 a year now has $35000, which amounts to $17,500 in pre-inflation dollars. In short, he just got a pay raise.
Meanwhile, the family which once earned $1,000,000 a year suddenly finds everything twice as expensive, lowering their effective income to $500,000.
Further, whatever debts you owed could be paid back much more easily in an inflationary economy. If a loaf of bread really costs $500, then you could pay off all your student loans by baking thirty loaves of bread. Inflation has always been better for debtors than for creditors. Read up on the whole "gold standard" politics of the late 1800s. It's dry reading, but relevant.
Finally, you ignore the overall thrust of the article: He is proposing this plan because, in the world he envisions, there is a vast amount of wealth being created by robots, with all the wealth going to the owners of the robots. Average schmoes are locked out of that stream because they can no longer provide any services that the owners would exchange their wealth for, because a robot can do unskilled (and even low-skilled) labor better, faster, and cheaper.
America has never been a purely capitalistic government. The government has taken it upon itself to do things like divy up land, control imports and exports, build armies, and a host of other things rather than let "The Market" find its own solutions. Every regulation is an affront to the ideal of a purely capitalistic marketplace. This state of affairs is A Good Thing. Would we want to live in a world where Biggasse Corp could dump their toxic waste on the outskirts of Smelterville, MI because its residents were too poor to make it expensive to do so? Where any amount of pollutants could be flung into the atmosphere because the corporation doing the flinging didn't have to bear the costs that pollution imposes on the rest of us? There are places where capitalism works, and places where it doesn't. The entire point of the article is that we're about to run up against a situation where capitalism Does Not Work.
very regulation is an affront to the ideal of a purely capitalistic marketplace.
That's not true. I think you may be confusing anarchy with capitalism. Capitalism requires a government to enfore contracts, ownership of property, and establish and maintain a "level playing field" for the market. A "free market" isn't a government-less market. It's just a market where there are no subsidies and/or special priviledges, and where people can expect contracts to be enforced by a neutral third party.
Capitalism requires a government to enfore contracts, ownership of property, and establish and maintain a "level playing field" for the market.
Capitalism requires a *system* "to enfore contracts, ownership of property, and establish and maintain a "level playing field" for the market." A government is only one such system.
Price inflation would happen. But it would be a huge equalizer. If we assume that $25,000 is the current household average, then giving every household another $25K will double the amount of money in the economy, hence we will assume the doubling the price of all goods and services (not the 250x increase you propose).
You can't assume that this would be $25,000 in addition to the existing incoming because it is already assumed that these people are not working due to massive amounts of automation.
The guy says 25k per person, not per household.
What a great incentive to have more children. My wife and I could pull down 200 G's with just 6 kids. Yes, and we'd all enjoy new freedom and creativity. Or maybe we'd just sit around and watch TV while robots delivered us pizza.
Why does this guy think one of our goals should be to increase the minimum wage when that would surely increase the rate at which people would be replaced by robots?
Another gem is using the lottery as a revenue source. Lotter
I highly doubt that things would be set up so there was a huge financial incentive to make more people. The whole point of this exercise is to imagine a world where much of what we do is now obsolete. Focus should be shifting towards providing a standard of living for the current population. Why would a society reward superfluous breeding at a time when we would be racking our brains for things for people to do?
It doesn't cost $25,000 a year to raise a baby, and you wouldn't be getting $25,000 a year f
Ahh yess but what about all those trillions of dollars in bonds that are owned by the rest of the world. For instance the Central Banks of Japan and China have a few hundred billion dollars invested in our U.S Government bonds that are returning 3-4% interest. If you tell them that the supply of dollars doubled they are going to be really really upset because their bond return is now -50%. They are then going to dump all those bonds and send the U.S dollar into a hyperinflationary tailspin.
A) These countries are facing the same unemployment boom being faced by the U.S.
B) These countries are not facing the same boom, because they haven't invested in robotics.
In the first case, the countries will be under the same pressures to redistribute wealth. In the second case, it doesn't matter what they think of our monetary policy. Robot labor (which we have and they don't) becomes a much more reliable indicator of wealth than greenbacks
Now that everything costs twice as much, the person getting by on $10000 a year now has $35000, which amounts to $17,500 in pre-inflation dollars. In short, he just got a pay raise.
Huh? The reality of inflation from an employee standpoint is that each week his paycheck will buy him less and less in terms of goods. Are you assuming that the employee has negotiated a wage that takes hyper-inflation into account and rises by a certain percent each week? You do seem to be implying this in your example of a 10
Actually, I was just thinking about the effects of a one time payment. Though if this doubling happened every year, the same thing would happen each time.
Huh? The reality of inflation from an employee standpoint is that each week his paycheck will buy him less and less in terms of goods. Are you assuming that the employee has negotiated a wage that takes hyper-inflation into account and rises by a certain percent each week? You do seem to be implying this in your example of a 10k wage increasing to 35
Price inflation destroys the wealth of the poor. It's the fixed income people (retired, on the dole, or minimum wage) that get the new money last. The folks who are buddies with the government handing out the money get the new, inflated, money first, and the prices rise. The fixed income folks get the new money last.
Yes, existing debts would be paid off rather quickly. Unless the banks got the government to declare bank holidays and other devices so they wouldn't go bankrupt. Oh, and interest rates w
Price inflation destroys the wealth of the poor. It's the fixed income people (retired, on the dole, or minimum wage) that get the new money last. The folks who are buddies with the government handing out the money get the new, inflated, money first, and the prices rise. The fixed income folks get the new money last.
Right. So how is that any different from the current system?
The thing is, the poor--by definition--have no wealth to destroy.
In the modern world, when the government starts printing money
This method is no different than the current system, you are correct. And the current system causes inflation and screws people on fixed incomes. If this method is followed to the extreme given in the article, the poor will suffer the most, because they get the money last, and they will get the least amount of money.
For pollution, I'd say Eastern Europe would be a good stat. You may disagree since private industry was outlawed, and skews the stats. If the government is only a bigger polluter than priv
Meanwhile, the family which once earned $1,000,000 a year suddenly finds everything twice as expensive, lowering their effective income to $500,000.
Not really, because a major part of that $1M is spent not on the same things that poor man's $25K would be spent, right? Even assuming that one actually burns through $1M a year in personal consumption (easier than I thought, only $2739/day;-) ), it's not going to be spent on bread and milk and even cheap booze...
Almost insightful.. (Score:4, Insightful)
What if the way to achieve the strongest possible economy is to give every citizen more money to spend? For example, what if we gave every citizen of the United States $25,000 to spend? $25,000 sounds impossible the first time you hear it, but consider the possibility.
Putting aside the laugability of the idea of a capitalist government giving each person a years worth of middle income wage for a moment - it would be great if
Re:Almost insightful.. (Score:5, Insightful)
Price inflation would happen. But it would be a huge equalizer. If we assume that $25,000 is the current household average, then giving every household another $25K will double the amount of money in the economy, hence we will assume the doubling the price of all goods and services (not the 250x increase you propose).
Now that everything costs twice as much, the person getting by on $10000 a year now has $35000, which amounts to $17,500 in pre-inflation dollars. In short, he just got a pay raise.
Meanwhile, the family which once earned $1,000,000 a year suddenly finds everything twice as expensive, lowering their effective income to $500,000.
Further, whatever debts you owed could be paid back much more easily in an inflationary economy. If a loaf of bread really costs $500, then you could pay off all your student loans by baking thirty loaves of bread. Inflation has always been better for debtors than for creditors. Read up on the whole "gold standard" politics of the late 1800s. It's dry reading, but relevant.
Finally, you ignore the overall thrust of the article: He is proposing this plan because, in the world he envisions, there is a vast amount of wealth being created by robots, with all the wealth going to the owners of the robots. Average schmoes are locked out of that stream because they can no longer provide any services that the owners would exchange their wealth for, because a robot can do unskilled (and even low-skilled) labor better, faster, and cheaper.
America has never been a purely capitalistic government. The government has taken it upon itself to do things like divy up land, control imports and exports, build armies, and a host of other things rather than let "The Market" find its own solutions. Every regulation is an affront to the ideal of a purely capitalistic marketplace. This state of affairs is A Good Thing. Would we want to live in a world where Biggasse Corp could dump their toxic waste on the outskirts of Smelterville, MI because its residents were too poor to make it expensive to do so? Where any amount of pollutants could be flung into the atmosphere because the corporation doing the flinging didn't have to bear the costs that pollution imposes on the rest of us? There are places where capitalism works, and places where it doesn't. The entire point of the article is that we're about to run up against a situation where capitalism Does Not Work.
Re:Almost insightful.. (Score:3, Informative)
That's not true. I think you may be confusing anarchy with capitalism. Capitalism requires a government to enfore contracts, ownership of property, and establish and maintain a "level playing field" for the market. A "free market" isn't a government-less market. It's just a market where there are no subsidies and/or special priviledges, and where people can expect contracts to be enforced by a neutral third party.
Re:Almost insightful.. (Score:2)
Capitalism requires a government to enfore contracts, ownership of property, and establish and maintain a "level playing field" for the market.
Capitalism requires a *system* "to enfore contracts, ownership of property, and establish and maintain a "level playing field" for the market." A government is only one such system.
Re:Almost insightful.. (Score:2)
You can't assume that this would be $25,000 in addition to the existing incoming because it is already assumed that these people are not working due to massive amounts of automation.
Re:Almost insightful.. (Score:1)
Why does this guy think one of our goals should be to increase the minimum wage when that would surely increase the rate at which people would be replaced by robots?
Another gem is using the lottery as a revenue source. Lotter
Re:Almost insightful.. (Score:2)
It doesn't cost $25,000 a year to raise a baby, and you wouldn't be getting $25,000 a year f
Re:Almost insightful.. (Score:2)
Same thing h
Re:Almost insightful.. (Score:3, Insightful)
A) These countries are facing the same unemployment boom being faced by the U.S.
B) These countries are not facing the same boom, because they haven't invested in robotics.
In the first case, the countries will be under the same pressures to redistribute wealth. In the second case, it doesn't matter what they think of our monetary policy. Robot labor (which we have and they don't) becomes a much more reliable indicator of wealth than greenbacks
Re:Almost insightful.. (Score:1)
Huh? The reality of inflation from an employee standpoint is that each week his paycheck will buy him less and less in terms of goods. Are you assuming that the employee has negotiated a wage that takes hyper-inflation into account and rises by a certain percent each week? You do seem to be implying this in your example of a 10
Re:Almost insightful.. (Score:3, Funny)
That's what life was all about.
Re:Almost insightful.. (Score:2)
Re:Almost insightful.. (Score:2)
Your typical millionaire is a dentist, or a lawyer or a small business owner. Someone who makes his money selling goods and services.
So if demand skyrockets, his profits are going to jump up too. So he'll be making twice as much.
This whole notion of "equalizing wealth" is a nice way of saying "soak the rich." It's a more genteel demagoguery.
No method of s
Re:Almost insightful.. (Score:1)
Yes, existing debts would be paid off rather quickly. Unless the banks got the government to declare bank holidays and other devices so they wouldn't go bankrupt. Oh, and interest rates w
Re:Almost insightful.. (Score:2)
Right. So how is that any different from the current system?
The thing is, the poor--by definition--have no wealth to destroy.
In the modern world, when the government starts printing money
Re:Almost insightful.. (Score:1)
For pollution, I'd say Eastern Europe would be a good stat. You may disagree since private industry was outlawed, and skews the stats. If the government is only a bigger polluter than priv
Ever tried eating $1M worth of bread a year? ;-) (Score:2)
Not really, because a major part of that $1M is spent not on the same things that poor man's $25K would be spent, right? Even assuming that one actually burns through $1M a year in personal consumption (easier than I thought, only $2739/day
Paul B.
Re:Ever tried eating $1M worth of bread a year? ;- (Score:3, Funny)