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Discussion Starter #1
I always see people encouraging a basic income...they suggest it should be a living wage.

So, I have a basic question...

1) where does the money come from?

Someone, a lot of people actually, need to earn more than the basic income to support those who don't. If you can get enough to survive without working and, if you work you have to give a lot of what you make to support those who don't, what's encouraging you to work?

Maybe it should come from businesses? Except they need to earn more than they make to pay taxes...if we raise taxes, the business needs to charge more, which raises the cost of living. This means the government needs to raise the payouts on the living wage, so they need to increase taxes.

There is only one source of government money, that's the tax payer. It's not "free" money. If they print more, the buying power decreases, it's a zero sum game.

It's always nice to help out others, give to the needy, etc. But where does he money come from? Do we just "tax the rich"? Who is classified as "rich"? Seems anyone not getting government money.
 

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The premise is that there are cost savings in other parts of govt by doing this. Healthcare, social services, eliminates GIS, welfare, etc. Is it enough in savings to offset the costs? I don't know.

Most experiments with it have shown that there is no drop in workforce participation rates.

I'm indifferent on the subject either way.
 

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I think the number of people who are currently sitting around, happily milking the system will be the same and the number of people who have a job because they would go mad without something to do all day will be the same. It will just result in a simpler, more efficient government for the reasons nobleea has mentioned.
 

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Spent money circulates through the economy (velocity of money) and it ends up back to the government.

Governments create deficits when the money doesn't circulate........like tax breaks for the rich.

It was never more obvious than the comparison of the efforts of the US and China to provide impetus during their recessions.

The Americans spent Trillions propping up their banks, and the banks earned money by lending it back to the government.

The Chinese directed their stimulus capital to the people in the form of vouchers to buy Chinese products and cash.

China recovered fairly quickly. The US has languished for years.
 

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I've said this before, but right now I believe we are peak jobs in the world. Automation is going to be increasing at a much faster rate over the next few years. I also see consumerism dropping (if slightly) from it's current peak which will reduce need for jobs even more.

At some point society needs to address this. When 5% or 10% of the population is unemployed we can support them partially through taxes, and heck if a few fall through the cracks, it isn't that significant a number anyway. But what happens when it's 90% unemployment? Is it fair that the 10% who happen to have jobs get all of the money or conversely fair for them to get taxed to pay for the rest?

Or does it become a matter of decreasing the retirement age to something like 40, or making a 20 hour work week?

Again, remember I'm not talking next week or next year, but we will reach this point sooner rather than later and it's something we need to think about.
 

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I was listening to Sam Harris's podcast and this is an example of how it could work:

Everybody would get 12,000 a year. After one reaches 30,000 there will start to be a small clawback till it's gone. This ensures that people who can get a raise to 35,000 don't decide to quit because who wants to slide back to 12,000.

As for where the money comes from. We would eliminate Disability, Unemployment, GIS CPP etc. Right now, some of those various offices have paperwork and people have to track any work they might have done, where they looked for work etc. Then they get called in to talk to a government clerk to show their supporting paperwork. You know the drill. Eliminate most of this and just give people a basic amount.

With AI coming really quickly, we don't have many options.
 

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I always see people encouraging a basic income...they suggest it should be a living wage.

So, I have a basic question...

1) where does the money come from?
If you give money to someone without any corresponding generation of goods and services, it will become purely inflationary. Milton Friedman won a nobel price when he proved this economic theory.

Price increases, in a society, are paid for by everyone in that society, but the highest cost is paid for by the lowest incomes, since the effect of any price increase will be a higher percentage to lower income people then higher income people. Since the people getting the free money will obviously benefit, the highest cost will therefore be paid for by the people at the lowest incomes in that group that do not qualify to receive any free money. So the ones who just missed out on the free lunch. They will become the most poorer of all the citizens in that society as a result of this program.

The middle class get to take it in the behind again.
 

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Discussion Starter #8
As for where the money comes from. We would eliminate Disability, Unemployment, GIS CPP etc. Right now, some of those various offices have paperwork and people have to track any work they might have done, where they looked for work etc. Then they get called in to talk to a government clerk to show their supporting paperwork. You know the drill. Eliminate most of this and just give people a basic amount.
So, instead of just giving to the minority (the unemployed and the retired), we'll take that money and give everyone money...I don't see that working as there are way more people currently not getting government handouts (umm I mean benefits) that can't afford to pay for the few who are currently.

As for the advent of AI and more unemployed people, my question gets even more relevant from what I can see.
 

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Discussion Starter #9
If you give money to someone without any corresponding generation of goods and services, it will become purely inflationary. Milton Friedman won a nobel price when he proved this economic theory.

Price increases, in a society, are paid for by everyone in that society, but the highest cost is paid for by the lowest incomes, since the effect of any price increase will be a higher percentage to lower income people then higher income people. Since the people getting the free money will obviously benefit, the highest cost will therefore be paid for by the people at the lowest incomes in that group that do not qualify to receive any free money. So the ones who just missed out on the free lunch. They will become the most poorer of all the citizens in that society as a result of this program.

The middle class get to take it in the behind again.
So, if we we give everyone a base amount, aren't we just raising the bar for everyone equally? Maybe the poverty line goes from 25k to 50k, how's that any different if we just gave everyone 25k now.
 

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I was listening to Sam Harris's podcast and this is an example of how it could work:

Everybody would get 12,000 a year. After one reaches 30,000 there will start to be a small clawback till it's gone. This ensures that people who can get a raise to 35,000 don't decide to quit because who wants to slide back to 12,000.

As for where the money comes from. We would eliminate Disability, Unemployment, GIS CPP etc. Right now, some of those various offices have paperwork and people have to track any work they might have done, where they looked for work etc. Then they get called in to talk to a government clerk to show their supporting paperwork. You know the drill. Eliminate most of this and just give people a basic amount.

With AI coming really quickly, we don't have many options.
Clawback has to be much more aggressive to make the numbers work. Really, there is no reason/need to have a 0 marginal tax rate on all income up to 30k. Really, the clawback should be at least 33% from $1. It's much better than the current welfare clawback of 100%+ (penalizing work).
 

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So, if we we give everyone a base amount, aren't we just raising the bar for everyone equally? Maybe the poverty line goes from 25k to 50k, how's that any different if we just gave everyone 25k now.
Not quite sure I understand the question. If the poverty line goes from $25K to $50K, someone who earned $40K, who was a reasonably well off middle class person is now living in poverty.

That is what will happen approximately. The poverty line will simply increase from the inflation that ensues when you give money to someone for producing nothing. They will take that free money and start bidding up the prices of the goods and services everyone else was buying. Since they did not produce anymore goods and services this increased demand on no increase in supply will force prices up. Everyone's rent will go up, everyone's restaurant meals will go up, the price of shoes will rise, etc. If you were making $40,000 per year and your expenses were $39,000 you were pretty well off. If your expenses for the same stuff are now $41,000, you are poor.

That is the cost of giving money to someone who does not produce any goods or services for it. I am not saying we don't do it. I am just explaining how it is paid for.
 

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Discussion Starter #12
No, I'm suggesting by giving everyone a base of 25k, then the line moves up the scale...prices will rise so that those who make 50k will still be just as poor as when they made 25k. Those at 65k will be the same as when they were at 40k, etc. O thing changes after the initial windfall.

I do admit that, in the first little bit, there will be benefits, but there will eventually be a return to the mean and people will be right back in the same position.

It's like when the 7% gst replaced the 13% manufacturing tax. Prices of goods dropped by about 13% for a few months, then returned to their old prices, only now you had to pay gst on top of it. Retail made an extra 13% profits. Another example is a friend of mine who had his furnace replaced just before the government handed out rebates. He paid $3500 for a high efficiency furnace, a few months later the government issues its $1000 rebates which he didn't qualify for. The next year, his neighbor used the same company, had the same furnace installed and got the rebate...only problem is he paid $6500. The government rebate handed tons of profits to struggling furnace installers. Today, you can't even buy mid efficiency furnaces anymore so the prices should have gone down according to supply and demand, yet they're still about 7k to install.
 

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That is exactly how it will work.

The problem with getting rid of poverty is that it is a necessary ingredient to be rich or well off. Wealth explained simply, is the ability to convince someone else to do something for you or to give you something that was theirs. That is all wealth is and will ever be. If everyone had the exact same amount of money, NO ONE WOULD BE WELL OFF. I think communism proved that quite well.

2ndly, in a free market pricing environment, the price of goods and services will rise and fall with the supply and demand of those goods and services. If you give more money to the people in a society BUT you do not increase the supply of goods and services (give money for nothing), the prices of those same goods and services will rise. This is what happens when you give money to people without asking them to produce any goods or services. In other words, without asking them to work for it.

Lastly, the current prices of all our goods and services is a direct reflection of the amount of money in our society that is currently available to bid for the goods and services our society has currently produced. Since our society tries desperately not to over-produce anything, we can assume that there is a limited amount of goods and services available to buy. In this situation, the prices of those goods and services will be set so that the people at the bottom deciles of income levels cannot afford them. This is done by the people at the higher levels of income bidding for them and driving up their prices. If the poor people somehow could miraculously afford them, they would bid up the prices even further until they or someone else could not afford them again. This is how it works. For the bottom deciles of income levels, the people in that group will always find that their rents will be too high, their food costs will be too much, they will need a program to provide snow suits for their children, etc. It is how capitalism and free markets work and unfortuneately it cannot be solved by simply giving the poor more money. It may help out that particular individual who received the free money but will simply reduce the standard of living of everyone else or just make someone else poor to replace him.

It is an economic law not much different then trying to make water boil at 99 degrees C.
 

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It is an economic law not much different then trying to make water boil at 99 degrees C.
The boiling point in Edmonton is 97.8°C.

Guaranteed income is limited wealth redistribution. It gets taken from government workers who administer the plethora of services that are currently required, and gets given to the people who currently use those services. If no additional money was added, it was just 'taking out the middleman', then I could get behind the idea. There would be the same amount of money given to society, therefore the prices of goods and services should not rise. And we can all get behind a more efficient govt.
 

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No matter how much they got from a Universal Income it would never be enough. Look at how many people refuse to find a basic job because they can make more on EI, welfare or they can sit at home and their parents will pay the bills.

Certainly there are those who need assistance, but the vast majority don't. Cut gov't spending\benefits, cut the handouts, cut taxes and if the only option is to find a job, than that's what they will do.
 

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Or does it become a matter of decreasing the retirement age to something like 40, or making a 20 hour work week?

Again, remember I'm not talking next week or next year, but we will reach this point sooner rather than later and it's something we need to think about.
Germany has reduced work hours to avoid job loss with great success. They have the shortest average work week as well as one of the most productive economies

The 40 hrs work week is a carryover from the industrial era that doesn't really make sense in the age of computers. Just look at the internet activity of "employed" people

Look at how many people refuse to find a basic job because they can make more on EI, welfare or they can sit at home and their parents will pay the bills.

Certainly there are those who need assistance, but the vast majority don't. Cut gov't spending\benefits, cut the handouts, cut taxes and if the only option is to find a job, than that's what they will do.
That's why the current clawback of 100% doesn't work. There is a balance somewhere that keeps enough incentive for the willing and able to work

With the likes of self-driving cars hitting the streets, AI could soon be more disruptive than the PC. Jobs are quickly becoming obsolete, so good luck with that theory
 

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Discussion Starter #17
The boiling point in Edmonton is 97.8°C.

Guaranteed income is limited wealth redistribution. It gets taken from government workers who administer the plethora of services that are currently required, and gets given to the people who currently use those services. If no additional money was added, it was just 'taking out the middleman', then I could get behind the idea. There would be the same amount of money given to society, therefore the prices of goods and services should not rise. And we can all get behind a more efficient govt.
Umm, you've obviously never worked in government, they never get rid of bureaucracy and I very much doubt that it would cover double (at a minimum) the amount of people who would get money that currently don't.

Even if they did cut the jobs, how do we handle the unemployed government workers now?

As for cutting the work week, that just means people will want to be paid more. If they have a hard time surviving on their current salary, how would they handle a 20% reduction? They can't afford it, so they'll demand a 20%+ wage increase.
 

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Government loans & grants to students has put up the cost of education. Government trying to make housing affordable makes housing more expensive & less affordable.

The reason so many manufacturing jobs have left Canada to over seas is the over seas government will guarantee there taxes will not rise for 20 years. Would you rent a house from a landlord that spent money recklessly & could increase your rent when ever they felt like it to support their spending addiction ? Why start a business in Canada when a politician that wants to get elected will tax your hard work so others can leach off of you ? In the U.S the states that have the highest taxes people are leaving. When the productive are taxed they will leave & look to live where they are taxed less.

Going to have trouble with leaches coming into Canada to live off the system while the productive leave. Basic income will be good for bitcoin & digital currency because who will want to work for Canadian dollars.

The government cant seam to understand the poor will always be with us & trying to change the fact will not work. Is the government blind to what happened in the U.S when the U.S government thought it was every ones right to own a house ? Each wolf, fox, rabbit etc provides for its own life or is granted no life @ all. We are becoming wimps with sporting events for kids where everyone participating is rewarded no matter how much work was done to perform well. If someone does not want to take responsibility for them self why should that responsibility be put on someone else?
 

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No, I'm suggesting by giving everyone a base of 25k, then the line moves up the scale...prices will rise so that those who make 50k will still be just as poor as when they made 25k. Those at 65k will be the same as when they were at 40k, etc. O thing changes after the initial windfall.

I do admit that, in the first little bit, there will be benefits, but there will eventually be a return to the mean and people will be right back in the same position.

It's like when the 7% gst replaced the 13% manufacturing tax. Prices of goods dropped by about 13% for a few months, then returned to their old prices, only now you had to pay gst on top of it. Retail made an extra 13% profits. Another example is a friend of mine who had his furnace replaced just before the government handed out rebates. He paid $3500 for a high efficiency furnace, a few months later the government issues its $1000 rebates which he didn't qualify for. The next year, his neighbor used the same company, had the same furnace installed and got the rebate...only problem is he paid $6500. The government rebate handed tons of profits to struggling furnace installers. Today, you can't even buy mid efficiency furnaces anymore so the prices should have gone down according to supply and demand, yet they're still about 7k to install.
Prices don'd tend to scale that way. This would be re-distributive.
 

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If you give money to someone without any corresponding generation of goods and services, it will become purely inflationary. Milton Friedman won a nobel price when he proved this economic theory.

Price increases, in a society, are paid for by everyone in that society, but the highest cost is paid for by the lowest incomes, since the effect of any price increase will be a higher percentage to lower income people then higher income people. Since the people getting the free money will obviously benefit, the highest cost will therefore be paid for by the people at the lowest incomes in that group that do not qualify to receive any free money. So the ones who just missed out on the free lunch. They will become the most poorer of all the citizens in that society as a result of this program.

The middle class get to take it in the behind again.
I'm pretty sure Friedman didn't mean what you think it means. You seem to be thinking that if you give someone some of your earned income and they spend it it is inflationary, but if you don't give the money and you spend it, it is not inflationary. That's not what he meant.

Besides, he believed in negative income tax, which is in the ballpark of a basic income.

https://en.wikipedia.org/wiki/Negative_income_tax
 
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