Sunday, May 28, 2017

The Case for a UBI

Over the last decade or so, I have supported some type of Universal Basic Income. In the early days before I was introduced to Modern Monetary Theory, I would think about ways to fund such a program, how the tax code could be worked, how the increase in spending, and all the other factors that played into funding this type of program would work.

The truth of it is, something like a UBI is a tough sell, even for many of the more progressive people. Really, tell people your grand idea to limit poverty, homelessness, stress, problems with the minimum wage is to have the federal government give every citizen $3,000 a month if their income is under $250,000 and everyone goes insane. Over time, I figured that for the initial roll out, a specific amount of funds could be removed from the stipend. If you owed back taxes, student loans, child support and alimony, or had legal judgments against you, a portion of that fund would be withheld until you were entirely caught up. After that, child support and alimony would continue to be removed from the stipend, the same with student loans. Of course, taxes would likely still come out of this stipend, Medicare/Medicaid and Social Security would still be offered (as the majority of us have already started paying into it).

Really it would just be a Social Security for All program. If you weren't content with the $27,000 (estimated at a 25% tax rate), you could find yourself a job and earn more money. In essence it would be the ultimate Social Safety Net. Nearly every person in the United States would be removed from poverty within the first few years. Now, I say the first few years, because honestly there is a lot of private debt. Mortgages, car loans, student loans, credit card debts, hospital bills, you name it, there is a debt for it and someone in the US probably has at least one of it, and its going to take a year or so to clear it out of our collective systems.

Think about this for a moment. If suddenly, next month you had an addition $2250 in income, what could you do? If you are renting, would you suddenly start looking for a new place to rent? Maybe you would trade in your older car for a newer one? If you didn't have to worry about how you were going to pay your bills, maybe you would sleep a little easier. You might even decide that since you hate your job, you'd quit and find something that you didn't hate, or you'd go back to school. If you wanted to be a stay at home parent, you could afford it. It opens the door for many options most of us don't currently have. Or at the very least, you would have the ability to ensure all bills are paid and food on the table.

But there would be other benefits, for all people. Once the debt problems got under control, people would spend money. They'd buy that new television, they'd spend more money than they do now. Rather than rarely going out, people might elect to eat out more, waiters and waitresses would certainly benefit from this in terms of more tips due to having more customers. Companies would make more money, given more people are spending. Now you might say that this will cause prices to increase, and yes that is a very real possibility at the start. Supply and demand, the more demand, the less supply, the higher the price. However, think about your computer, or your smart phone. I remember back in the mid-90s when I got my first computer, it was a large chunk of money to buy that thing, something like $2000 at that point. Today, you can buy five times the computer for $400. Why is that? Because more people started buying them, the developmental prices decreased because companies had to be more innovative and cheaper than their competitors. Ultimately, we have computers selling for next to nothing when compared to cell phones and televisions (which would also benefit from this same effect). Also remember that companies are also trying to recover their research and development costs, and with more sales, they recover their funds faster.

Also keep in mind that as demand rises, more people are going to be needed to work the machines, load and unload the trucks, stock the shelves, be able to repair the products. The only way supply cannot keep up with demand is if everyone decides they are done working, and guess what, not everyone is going to get off their job. Some people would continue to work, as shown when Canada performed a basic income experiment several decades ago. People would buy a home, certainly everyone could have insurance (especially if we go into a Single Payer System), cars would get sold, and do all the things some don't do now. And this money would be passed back into the economy, because others would spend more.

See, while being a “job creator” is cool and all, its not the thing that ultimately drives and economy. Its the people who go to a NASCAR race, its the people who eat out every week, go to the theaters, travel to Disney, remodel their homes, buy cars and video game consoles. When people spend the economy grows. When we don't spend, it contracts. When people are doing as many are, it grows stagnant. Hey, imagine if everyone could afford to go out and buy a newer more fuel efficient vehicle? I'm not saying a Prius in every driveway, but cars that get double the mileage of their current car, look at the benefits to the environment. The manufacturers would make a killing yes, but you'd have the bonus of not using as much oil based fuels, which helps the environment. We'd become more fossil fuel independent, and less affected by market whims when it comes to oil prices. We would improve the quality of life for all people.

That is the thing, the most important thing if you think about it. Having a job is great, having multiple jobs are not. Being able to afford the basics, while paying your bills does a great many things for the mind and body. I'd bet that there would be a massive change in various aspects of our lives. Less stress, less financial problems, fewer divorces, oh and likely fewer abortions. Hey, I know people who get pregnant just to try and save their marriage.

Say what you will about this idea, good or bad. But there are some other things we need to start looking at. Last year some companies started testing out self driving semi-trucks and trailers. We already have cars (think Tesla) that can drive themselves. And yes, while you still have to pay attention when the car is driving itself, the fact is, its only a matter of time when the programming will be able to completely drive itself without any need for human intervention or interaction. We are doing this with cars and trucks. People are developing machines to make your Big Mac, while other places have fully fleshed out automated ordering systems (Here's looking at you Sheetz and Wawa). Many of the cars we drive today are nearly fully automated in their construction (usually a few people oversee everything), self checkouts are a real thing and are growing. Even our enforcement of traffic laws is becoming more automated. Those sensors above the traffic lights in your home town, they double as cameras to catch people running red lights. Where I live we have signs that tell you how quickly you are driving, and guess what, if you are speeding, it takes a picture of your tag and you, mails you a speeding ticket. Cameras on police vehicles take pictures of your tag, run it against a data base, and if your tags are dead, even if the cop doesn't stop you, you could get a ticket.

In rapid progression our lives are becoming automated, and I won't say its a bad thing. The problem is, our economy doesn't match the coming lifestyle. Our lifestyle is quickly becoming one where work isn't required, its becoming optional in many aspects. But our economy still dictates that we must work for the things we need and want. With the looming creation of true Artificial Intelligence, where computers can do anything needed, something has to change. We also need to get out in front of this. We cannot wait until a quarter of the jobs we currently have are fully automated. At that point we would have millions of people out of work, possibly out on the streets. We need to be in a position where when this happens, it will not affect our economy. Where people can still survive without absolutely having to have full time employment. Now, I know some of you might be thinking, when the car came along, became affordable, it didn't put carriage drivers out of work, they became taxi drivers. That is true, but only the title changed, the job was essentially the same. But what happens when the taxi becomes fully automated, and does not require any real oversight, what does the taxi driver do then? He finds another job, maybe as a mechanic on the same taxi he previously drove. But what happens when someone figures out how to take this “thingamajig” can do 90% of the maintenance for half the cost, and three times faster with fewer errors? That previous driver turned mechanic is going to need to find work elsewhere. Remember, that as production gets going, and the demand increases, the prices are going to decrease. Also remember that everything technological doubles in speed and ability every eighteen to twenty four months, while the price and size decreases. There was a time that a computer, a regular computer was the size of a room in a house. Even my first computer in the mid-90's was a big thing, nearly the size of a small modern microwave, today, I am typing this out on a laptop that could fit into a small modern microwave. Just look at cell phones, which back in the 80's were the size of War and Peace, in the 90's to early two thousands were the size of a deck of playing cars, and while they are becoming larger today, its only the screen size that is changing. Technically, the phones are thinner, but taller, and they can act as a small computer (this applies to smart phones). The regular old-fashioned “dumb phones” haven't changed much over the last fifteen years. Yeah, there are people who say Moore's Law cannot continue at the pace it is, but that is not true. Several times in the last few decades people have said that the sluggish pace of technology growth signaled the death of the law. Yet, that is only because we hit the limit of technology, for that period, then someone comes along and figures something else out, and the race is back on.

Okay, look, I am not railing against technology. Technology is our friend, it is making our lives easier everyday. That is a good thing. Our computers, and our phones really help make the days easier. If you are looking for work, potential jobs are just a few keystrokes away. I say potential because even if you fill out the application, you may or may not get hired. We can communicate ideals, get the latest news, and do research in a split second. If we have trouble, we can get help nearly instantly, or at the very least send out that we need help, and as technology grows, these abilities will grow. The land-line is nearly dead, replaced by cellular technology. We are quickly approaching the means to delete AIDS, birth defects and cancer from DNA. And in time, we might even be able to fix anything and everything that ails us physically and emotionally. What I am saying here is, we are very quickly approaching a time when people are going to need food, shelter, and the other necessities of life and there won't be adequate work to provide it for a large number of them. This is not an alarmist point of view, its a real word view of needing to bring our social and economic lives in line with the technological life we are leading. And for the record, I am not advocating against technology, I am advocating for altering everything in such a way that we continue to drive technology further ahead, while maintaining good lives for all of us. Because lets face it, technology is coming, like it or not, its time we start planning ahead for the eventual outcomes, before we have too many people suffering for it. Don't resent technology, it was created to make life better for all of us, but we have to plan ahead for the consequences of it.