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DU Home » Latest Threads » Forums & Groups » Topics » Activism » Socialist Progressives (Group) » Yang 2020. Let's put huma... » Reply #9

Response to wasupaloopa (Reply #1)

Thu May 3, 2018, 07:37 PM

9. Good questions.

I'm not sure you got particularly satisfying answers. I'll do my best.

I'll start from the end and work backwards.

Where does the money come from? The same place money already comes from. US dollars are a creation of the Federal government. I know most people thing the government taxes, then spends. That's not true. It actually spends, then taxes. (This is the case with the Federal government, but not state and local governments - they have to tax or borrow to spend.) The Federal government can spend as many dollars as it cares to, it's not financially constrained in any meaningful way.

This leads to your second question about inflation. Even though the Federal government has an infinite supply of dollars, there is not an infinite supply of labor and resources. So is is possible to create a situation of too much money chasing too few goods and services, which will result in inflation. There are a variety of ways the government could handle this. The usual method is for the Federal Reserve to create higher unemployment (by raising interest rates); an alternate method would be to cut spending or raise taxes.

Whether or not a universal basic income will create inflation depends on a lot of other variables. I think the argument is that productivity increases will be significant enough that we can provide more goods and services with less labor (already true vs. anytime in the past). If we build capable enough robots, (and natural resources aren't exhausted) then the goods and services should be available. Personally, I'm not sure. In spite of all the hysteria about robots taking jobs, productivity growth has been very slow in recent years (much less than it was from WWII through the 60s), but maybe there a productivity boom on the horizon.

I'm not sure I understand your question about poverty. There's "absolute" poverty and "relative" poverty. Right now there are plenty of people in the US who don't get enough to eat and don't have a roof over their heads. But there is enough food, and enough housing, so it should be possible to remedy that sort of poverty without creating inflationary pressure.

Myself, I'm not sold on the idea of a universal basic income. I'd much rather see a full employment policy of some kind, and some different (i.e., other than UBI) revisions of laws governing property and labor markets first. But I'm still considering all the arguments around these issues.

Hope that helps.

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