Replacing U.S. Welfare system with a Basic Income Guarantee

A $10K guaranteed income will dilute the purchasing power of the US dollar by $3.5T or so per year. Yeah inflation. Who doesn't love paying more in taxes and more for everything I buy so someone else can sit on their arse? Not me, that's for sure.

 

$10K per person is less than the Fed bailed out the big banks with in 2009.
How much more of a difference for the tanking economy would $10k per person have made than that?

 

I believe eminent domain is valid justification for the use of the police power, ostensibly, for the public good. Abolishing (simple) poverty could be done through eminent domain and with existing legal and physicat infrastructure in our republic. It could be as simple and market friendly as the concept of employment at will can make it; and, it is not politics but Individual Liberty that would enjoy some respect.

 

The government created what we consider to be the private economy these days.
The idea that government has had nothing to do with the economy is absurd.
Corporations, and other business entities would not exist if the government had not legislated their creation.
Only a complete idiot would believe otherwise.

 

A ton. The money the fed bailed the banks out with is largely not in circulation. It is accounting trickery more or less by pretending the fed is a bank independent of the government. It wasn't 350,000,000,000 people looking to buy mostly the same goods and services all at once. There would be an initial spike in prices across the board as business fought for their share of that $10K poor folks got for free.

 

Capitalism only works well when Socialism habitually bails it out.

 

Bingo! I was just beginning to post something to that effect. The bank bailouts had a very low velocity since the funds basically sat as excess reserves. But 10K per person would be inflationary because it's money that almost all would be spent immediately.

 

Inflationary up to a point until a new equilibrium is achieved. With that increase in demand, suppliers should be looking for ways to provide better products at lower cost.

 

It's a violation of simple trade; one person sells or trades something to another person...leave them alone to carry on their trades...

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Well...I believe otherwise...

 

Promoting the general welfare implies using socialism to bailout capitalism, like usual.

 

If the vastly indebted consumer economy had not been tanking, shedding millions of jobs with housing prices collapsing that might be true in the sort of idiotic conservative macroeconomic perspective that was used to justify why the Fed actually did what it did, which has led directly to the current economic quagmire.

It is more likely that that a good portion, at least a third, would have been used to reduce mortgage debt, which would have gone a long way in stabilizing the collapsing housing market. Half of the rest would likely have gone to pay down debt in the other large consumer debt sectors, student debt, auto loans, and credit cards. Probably 10% would have put the money directly into a savings or investment account.

It is quite likely that giving each household $10,000 in 2009-10 would have resulted in an aggregate spending increase of around $2,000 per household, which would have generated just enough demand to return the manufacturing and service sectors to growth. There would have been little inflationary pressure because these businesses were already experiencing decreased demand and cutting back to reduce excess capacity.

Also, if you consider the vast and rapid pay down in consumer debt, financial sector liquidity problems would have been hugely alleviated because a massive infusion of consumer debt pay down would have permanently retired a huge amount of liability reducing exposure in the derivatives markets and boosting balance sheets, all from the bottom up.

This is a far better outcome than the top down solution of the Fed, which provided financial market liquidity, did nothing to alleviate the housing collapse, revive consumer demand, or relieve consumer debt. They put their money into the top so that where all the benefit has accrued, to expect a monetary top down solution to work its way to the bottom is naive at best since there is no evidence of that ever happening in a modern developed economy.

 

Well the issue is not what should we have done during the financial crisis, but replacing the Welfare system with a basic income guarantee. On a regular basis, it would be inflationary.

As a tactic for dealing with the financial crisis, it would probably have been better than wasting billions bailing out the banks, but we would have probably had to have dealt with inflation in any case. Although I admit I'm not sure how you think that what we actually did was a "conservative macroeconomic perspective." I remember conservatives being opposed TARP and all of the other bailouts. You must have your conservative macro economists confused with liberal Keynesians who seemed to be more concerned with bailing out the people who screwed us.

 

I agree to disagree because you are omitting gains from productivity. We should be correcting for market inefficiencies with our tax dollars in the name of the general welfare.

 

Conservatives in general were not opposed to TARP, only the tea party, which may be all the conservatives to you but at the time were considered extremist crackpots.
The conservatives also screwed the economic recovery by forcing almost all the economic stimulus money into tax cuts instead of government spending in return for their votes.


Anyway, concerning the issue at hand, which is replacing welfare with a basic income guarantee, I see quite a few benefits to the entire economy without any downsides. For one thing, it will free up the poor people from having to spend 30 hours a week dealing with the many people scattered all over the place who administer the myriad welfare benefit programs. It would also reduce the government payroll as the need for administrators for over a hundred different welfare benefit programs at the federal state county and local level are eliminated.

A basic minimum income would generate a lot more personal responsibility and independence among the poor as they would know for sure that they would not be getting anything more from the government. There would be no administrators for them to cajole or plead with and no schemes to play to game the system.

There would be some minor shifts in spending but no general inflation unless the scheme involves a massive and sustained increase in government spending without an offsetting increase in revenues, which does not seem to be apparent since a univeral guaranteed income would be returned as tax revenues for all but the poorest, who the government spends more than that on already.

It is not impossible that the imposition of a universal income scheme with an offsetting income tax for all but the poorest would have some regressive aspects, generating deflationary pressures in certain sectors of the economy.

 

That's quite a set of myths you have going there. TARP helped to create the Tea Party, but there was no Tea Party at the time that bill passed. The opposition to TARP was on the far right and the far left. The middle was all for it. And conservatives had no, zero, nada influence on the Stimulus bill. That was a bill that began to be crafted by the Democratic House leadership in December of 2008 and if memory serves, got almost no Republican votes. Not that it mattered since Congress was firmly in the hands of Democrats. I don't know what internal battles lead to to so much of the stimulus being tax cuts but it had nothing to do with conservatives.

If we were starting from scratch, I agree that a BIG would be more efficient and cheaper than the massive social welfare state we've set up. But we're not starting from scratch, and as has been detailed in this thread, much of the poor, particularly those on Medicaid, would be much worse off. What we really would end up with would be BIG on top of our present social welfare state, which would be worse than not having BIG at all.

 

Solving simple poverty through unemployment compensation is easier and the infrastructure already exists in our republic. Unemployment compensation should clear our poverty guidelines. We could be improving the efficiency of our economy and lowering our tax burden in the process.

 

How about replacing the US welfare system with government jobs?

If an able-bodied person desires government assistance, then become a government employee. This can be jobs from picking up litter to teaching to research. We can add a teacher's assistant to every classroom in the US using those on welfare! They can work in the US postal system, security, administration, with non-profits, transportation, etc.

At least get some productivity for the spending...

 

We have a federal doctrine and State laws regarding the concept of employment at will. Only truer forms of Socialism require a work ethic. Capitalism is supposed to rely on voluntary social transactions that involve mutually beneficial trade.

We can increase productivity by merely increasing the circulaion of money in our Institution of money based markets.

 

How about changing our present prison system into a workfare system? The benefits would be multiple.
1. The prisoners would earn some money and learn work skills and develop good work habits with outside jobs waiting for them.

2. Low cost work that is commonly shipped overseas could be performed here, helping with our trade deficit.

3. Some prison costs could be deducted along with things like childcare costs of prisoners with kids.

4. Presumably there would be less recidivism and lowered prison conflict, requiring less guards and lower prison costs to the public.

5. Likely with renewed hope released prisoners would be good roll models for younger kids potentially in the prison pipeline.

 

My left hand is 90% dysfunctional permanently, my right 60% and type using an on-screen keyboard and mouse at roughly eight words per minute, I have someone paid for by my HMO to give me my shots and help with personal care and do wound care and need a power wheelchair to travel outside the home. If one can't use their hands, they hurt all the time from nerve pain and need to rest them for a decent amount for every ten minutes using them what job group can I do?

I had a hair in the butt the wrong way SSI reviewer on an appeal and they agreed I couldn't work, it didn't even go to a judge.

 

Maybe, but it could involve wasted effort since employers are not required to have an employment ethic to complement a work ethic required of labor, under the concept of emloyment at will. Is it any coincidence that the least wealthy are habitually denied and disparaged in their privileges and immunities under our form of Captalism, regardless of our form of socialism as enumerated in our supreme laws of the land.

Equality before the law is a social concept regardless of our form of capitalism.

 

I believe public sector involvement in Individual healthcare does not solve for the dilemma of (official) poverty in our republic.

Would our elected representatives feel any need to micromanage the private sector if persons cannot claim to be in (official) poverty and can can Only stay poor on an at-will basis if they choose?

 

Moving to universal single payer would decrease enough of the unnecessary overhead of our current health care train wreck to the point where current government and business expenditures for health care would be more than sufficient to provide every person in the US with the same level of high quality health care. This would vastly improve the situation for Medicaid recipients and everyone else.

 

Why did you change the subject? There are plenty of threads about single payer.

 

Why do we need another (BIG) government program instead of using existing infrastructure in our republic on an at-will basis.