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Guaranteed Income Thoughts

February 8, 2016

Guaranteed Income Thoughts

by Lushfun


Imagine a world where you are guaranteed an income stream. Not much just enough for basic necessities. It may theoretically be plausible, so far Finland , Switzerland , and France have thrown out feelers to see what public thinks in essence. Theoretically in order to eat through the mountains of imaginary debt that won’t be paid back inside Europe there would have to be some sort of inflationary starter that makes it possible. Workers are losing jobs left and right and the youth is unemployed since global growth is really negative, so it could to a degree be interesting way to go. Printing money to give to the population to stimulate some sort of multiplier effect and generally allaying the unrest, and so on.


The problem with schemes like this is the distribution of costs that a system like this would set in motion. If one reflects on things in U.S., food stamps and other things, a unifying guaranteed income which essentially replaces these things in Europe. Perhaps not be such a bad thing from a social point of view. It would solve certain problems in regards to people becoming desperate and driven to change the dynamic. However, certain problems would be created, entitlement problems and what is ‘fair’. As of right now this is the only way to distribute enough money to keep the system going from imploding under the weight of financial leverage and non-written-off bad loans that accumulated due to asset-bubble mania and encouragement by the financial system at large.


I can see this being implemented. Ergo, 800 euro per person per month would be enough to create enough liquidity in order to promote some sort of wage-price-spiral. If Quebec and Canada at large move in this direction it is likely the U.S. may as well. Essentially a first-world self-liquidity loop to make sure the population has basic needs met. One begins to think about Huxley and the “Brave New World” in this context. The shift would be monumental, not just from an income-inequality stand point. If income is guaranteed then the printing press would essentially be ‘democratized’ a bit. The necessity of this action is apparent in the distraught implosion of demand for goods, services, and otherwise globally. Impact on capital, if one imagines 10-20 people pooling say 100 euro a month to fund themselves into a business and the dispersion of capital productivity into the economy would be interesting. Labor impact is far more cloudy. Any thoughts?


If we have about a billion people in this system and each gets $1,000 a month of guaranteed income the infusion of cash is $12 trillion a year. Considering that some people have money and jobs and that extra income will be taxed on that end and perhaps a third would actually be in need of the income right away, say students and elderly. The marginal spending would perhaps increase by half say $6 trillion a year. Amount of slack demand and trade boost this would provide would certainly fix a lot of problems.


There is a dark side to all of this. Government control and international government control would get a significant amount of leverage over vast populations. Political influence in certain areas would increase and allow Federal Gov’t or the EU beuracracy to cram down policy to the states and nation-states. Imagine the amount of control if your emission center is in Germany and Spain passes a law that deals with something “contrary to the spirit” of Eu constitution or laws and the emission of funds is suspended for the ‘guaranteed income’ in Spain? What do you think would happen? There would simply be hints of bureaucrats to national leaders to follow the policy of the central state and the funds to buy that power would be created out of nothing, backed by the populations of those same countries on the ground against their own self-determination in regards to laws and policy matters. This would create puppet states that are beholden to the central emission center from Foreign Policy to Family Planning and all for the price of guaranteed minimum income, printed out of thin air. Magnificent? is it not.

There are always strings, attached. Depends to whom and why, and how they are directed.


Be well dear reader.


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