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Chuck Jaffe: How Could $1,000 A Month Change Your Life?

FYI: Americans are no more likely to collect the “Freedom Dividend” than they are to win the next Mega Millions lottery jackpot, but just as playing the lottery can fuel dreams and shape financial priorities, so can the unusual political promise of free money help consumers and savers re-evaluate their finances.

The Freedom Dividend is the unconventional plan being floated by Andrew Yang, Democratic candidate for president; it would give all U.S. citizens over the age of 18 guaranteed payments of $1,000 per month.
Regards,
Ted
https://www.seattletimes.com/business/how-could-1000-a-month-change-your-life/

Comments

  • edited August 11
    Americans are no more likely to collect the “Freedom Dividend” than they are to win the next Mega Millions lottery jackpot,
    I wonder if journalists said the same thing about Social Security before it existed. All the Freedom Dividend is is Social Security for everyone. Indeed, for Americans over 65 the Freedom Dividend already exists.
  • @MFO Members: I have no problem with Social Security for everyone as long as everyone pays into the fund.
    Regards,
    Ted
  • My humble proposal –
    Each citizen age 18 or over receives a $1,000 credit per month to be applied to health insurance of choice, whether private or public. Any minors must be covered before moving to the next option. (Yeah, I would favor DNA testing to identify deadbeat fathers.)

    If the citizen and/or spouse has employer health coverage and the full amount is not needed for primary health coverage, the balance could be applied to dental coverage, vision coverage, or an HSA.

    Or, it could be applied to an iron-clad retirement program, public or private. By “iron-clad,” I mean no borrowing, or sketchy exemptions like first home purchase. Retirement, and retirement only. Buy Social Security credits, if you want.
  • I hear your $1k/month, and raise you $4k..

    My fellow Americans, candidate Yang is tossing you scraps! $1k is subsistence living. Vote for me instead -- I will pay each of you $5k/month. No, wait $10k/month!

    Ask not what you can do for your country, ask instead how much your country will pay you for being unproductive slackers! In fact, I will offer $10k/month to all Mexican, Honduran and Guatamalan families who can sneak across our border too (and come they will -- who wouldn't come for "free stuff"). Paying immigrants to come here and NOT be productive is truly what Lady Liberty stands for. Give me your huddled masses yearning... for free money.

    ---
    The above is of course, satire.

    But what would $1k do? Increase the price of a)lodging (renting or home prices), b)restaurants, c)labor

    ---
    Yang (and the CB's) seem to think lack of inflation is problem. Its not. Stable prices are a good thing. Having the purchasing value of one's accumulated saving NOT be debased is a good thing.

    Of course, I encourage philanthropy. If Mr. Yang and other "freedom dividend" advocates believes giving money to strangers for doing nothing is a good idea, by all means, let them give THEIR money away.

  • Many of the people who believe in Basic Guaranteed Income like the Freedom Dividend are from silicon valley’s tech sector. They believe because they realize what’s happening. By one estimate 50% of American jobs will soon be replaceable with technology and not enough new jobs will be created to take their place. So let’s say we eventually hit 20% unemployment because of that. What do you think America will look like then without a Freedom Dividend? Perhaps if Yang included a tech tax with the Freedom Dividend to pay for it it would be more acceptable to you.
  • This was a waste of 2 minutes
  • edited August 12
    Silicone Valley tycoons "believe" in the free money because it shuts off talk about alternatives, and leave their wallets bulging. If tech & AI specifically, are going to cause increasing disruption of the job markets, one answer is to tax AI and slow it down.

    Commercial replacement of human by 'droids', can certainly be regulated, by taxing it. (Tech execs certainly wouldn't like this alternative. I don't care!). How? Example: Your local grocer or retailer likely already has "self-checkout" scanning units. The Govt could require registration of all such units (failure to register would result in crushing fines). The registered droid (and future droids) would no longer be a deductible or depreciable asset for tax purposes. Moreover, the IRS would require the owner of the droid to impute income for tax purposes (income- and payroll-taxes). The droid's owner would be required to send the tax on the imputed income to IRS. Taxes remitted on behalf of the droid would also NOT be tax-deductible. This taxing protocol could be implemented to include those annoying automated answering machines too.

    Basically, rather than the US Treasury subsidizing droids, they treat them as taxable "persons" -- and disallow businesses from deducting any costs associated with them.
    Should droids enjoy a more favorable tax rate than human? I think NOT!!

    Even if every business owner continues to layoff humans in favor of droids, at least the droids' taxes would fund a lot of benefits for current and former human employees.

    Many of the people who believe in Basic Guaranteed Income like the Freedom Dividend are from silicon valley’s tech sector. They believe because they realize what’s happening. By one estimate 50% of American jobs will soon be replaceable with technology and not enough new jobs will be created to take their place. So let’s say we eventually hit 20% unemployment because of that. What do you think America will look like then without a Freedom Dividend? Perhaps if Yang included a tech tax with the Freedom Dividend to pay for it it would be more acceptable to you.

  • @Edmond I think both things are possible--a tech tax and a Freedom Dividend. In fact, as I alluded to earlier, I think they go hand in hand. Use the tech tax to pay for the Freedom Dividend to help with the adjustment from putting people out of work with tech.
  • msf
    edited August 12
    In a sense, people in the US already have a form of basic income. It's just that it's provided via a crazy quilt of programs. So much so that Milton Friedman proposed simplifying with his version, which he called a negative income tax. All variants on the same theme - ensure everyone has at least a certain income level, and use taxes to fund.

    https://www.vox.com/2014/9/8/6003359/basic-income-negative-income-tax-questions-explain

    https://www.nytimes.com/2006/11/23/business/23scene.html
  • edited August 13
    When will Us bankrupt or default on their bonds

    I worry about my nephews nieces children living in a poor economic system in 20+yrs

    I wonder what potus congress doing about fed deficits beside kicking can down road after 2020

    Think it will be very difficult to pass laws /convince US citizens /tax workers (voters small business owners) >40s% in taxations and rich folks ~ 70% to pay (for all free Healthcare and green deals and 1k monthly each millennials)

    I would vote for yang if he gives me one k monthly and a free Corvette
    As rono would say - time buy more (physical) gold?!? -
  • Household net worth in the U.S. is $108.6 trillion: https://fred.stlouisfed.org/series/TNWBSHNO
    Are we really as poor and unable to pay for this as you think?
  • John:
    If you mean a time where the Treasury (and other sovereign Govts) are unable to service their debts, at least more than for a day or 5, well my crystal ball tells me something else will occur. (see next paragraph) --- Though if you are truly concerned, then the thing to buy is gold bullion. Not ETFs, not mining stocks, nothing with a 3rd party custodian. Just gold, which you self-custody somewhere in your personal residence. The "worst" you can expect from bullion, is that it will retain its purchasing power over time. The "best" is that it soars in value when conventional asset markets become dislocated for some indeterminate period of time.

    Look, the whole world is awash in debt, not just the USA. So there will be a global solution, involving most major currency sovereigns. The CBs already have a playbook to address it, once we approach the financial "cliff". I don't know what's in the playbook, but I suspect ONE of the plays will be for each sovereign Treasury to issue new private-placement debt (PPD) to their respective central bank. The terms of the PPD would be: a) no maturity (i.e. perpetual), and b) 0.0% coupon. So "free money". The proceeds received from the CB to the Treasury could be used to pay off existing public bondholders as those debts fall due. --- So definitionally, there would be no "default". Moving to PPD financing has enormous implications. But the key is, there need not be any "default".
    johnN said:

    When will Us bankrupt or default on their bonds

    I worry about my nephews nieces children living in a poor economic system in 20+yrs

    I wonder what potus congress doing about fed deficits beside kicking can down road after 2020

    Think it will be very difficult to pass laws /convince US citizens /tax workers (voters small business owners) >40s% in taxations and rich folks ~ 70% to pay (for all free Healthcare and green deals and 1k monthly each millennials)

    I would vote for yang if he gives me one k monthly and a free Corvette
    As rono would say - time buy more (physical) gold?!? -

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