Merging Altruist and Capitalist Economics

[Pozessed]

I am curious of the economic outcome if America had a small happenstance in its economy. Please allow me to entertain your thoughts.

Consider Americas economy to have establishments that will give all its registered citizens $60 cash once per day.
Every day but holidays.
These establishments are as abundant as fast food places and gas stations.
All a person needs to do is show up and wait their turn in line to collect the money.
The money does not come from government funds.
The money being given is projected to reoccur for at least 10 years from multiple civilian contributions out of pure generosity.
However, the money is taxed and 25% to 30% of every dollar given went towards the recipients taxes and required dues.
Thus the $60 per day is only 70% to 75% of the persons total earnings.

If the establishment described above were a functioning entity today, and it serviced the majority of Americans. What effects would it play on the economy?
Please be a little detailed if you wouldn't mind.

[iNow]

Well, people without any spending money now would be able to spend and it would feasibly increase demand which would cascade throughout the system and stimulate jobs. You'd also decrease the deficit since you'd be collecting new revenues into the government on taxes.

 

However, that's more than $20,000 per year per person (or $6 Billion annually using a conservative estimate of 300 million people in our country) that you expect to collect from "pure generosity." Even the most generous among our wealthy probably lack the resources needed to fund.

 

More than anything else, though, if this were somehow made to work... I see the biggest impact being on reducing poverty. It's basically the same thing as a guaranteed minimum income, except made unnecessarily more complex.

 

http://www.theatlantic.com/politics/archive/2014/08/why-arent-reformicons-pushing-a-guaranteed-basic-income/375600/

[Pozessed]

Well, people without any spending money now would be able to spend and it would feasibly increase demand which would cascade throughout the system and stimulate jobs. You'd also decrease the deficit since you'd be collecting new revenues into the government on taxes.

 

However, that's more than $20,000 per year per person (or $6 Billion annually using a conservative estimate of 300 million people in our country) that you expect to collect from "pure generosity." Even the most generous among our wealthy probably lack the resources needed to fund.

 

More than anything else, though, if this were somehow made to work... I see the biggest impact being on reducing poverty. It's basically the same thing as a guaranteed minimum income, except made unnecessarily more complex.

 

http://www.theatlantic.com/politics/archive/2014/08/why-arent-reformicons-pushing-a-guaranteed-basic-income/375600/

What do you think would happen due to inflation?

[iNow]

If we saw some inflation, right now it would largely be a good thing and would help to naturally erode our debt. While it's not something creditors want to see, it's what the aggregate economy actually needs so debtors can get "out of the hole."

 

http://www.marketplace.org/topics/economy/whiteboard/why-inflation-can-be-good-thing

 

I don't, however, think it would occur in an overwhelming amount since while $6B is a lot of money, it still only represents 0.04% of the overall US economy.

[Pozessed]

If we saw some inflation, right now it would largely be a good thing and would help to naturally erode our debt. While it's not something creditors want to see, it's what the aggregate economy actually needs so debtors can get "out of the hole."

 

http://www.marketplace.org/topics/economy/whiteboard/why-inflation-can-be-good-thing

 

I don't, however, think it would occur in an overwhelming amount since while $6B is a lot of money, it still only represents 0.04% of the overall US economy.

Kudos to you my friend. Thank you for your thoughts.

[swansont]

 

However, that's more than $20,000 per year per person (or $6 Billion annually using a conservative estimate of 300 million people in our country)

 

$6 Trillion (using US nomenclature, see http://mathcentral.uregina.ca/qq/database/QQ.09.02/ryanandaylah1.html )

 

$6 Billion divided among 300 million is $20 each; it's a small fraction of the federal budget.

 

Kinda changes the discussion a bit

[Ten oz]

@ the OP, unfortunately I am a bit of a cynic when it comes to capitalism. If such places existed offering people money I believe the people receiving money would quickly be exploited. I can imagine any number of schemes where an average person would simply wind up owing their $60 a day to someone else. That money would get factored in as income and people would be be given loans for homes and cars they otherwise can't afford. Flexible interest rates and inflation would ensure they weren't able to keep the cars and homes. After a brief up swing to the economy there would be a collaspe leaving an enormous amount of people permanently indebted.

[iNow]

$6 Trillion

Ugh. Thanks for the correction. That was indeed a sizable, frustrating, and embarrassing orders of magnitude error. What that means, though, is that funding this becomes even harder than I was originally highlighting. The impact on inflation would clearly be bigger at ~30% of the economy, too.

[Phi for All]

@ the OP, unfortunately I am a bit of a cynic when it comes to capitalism. If such places existed offering people money I believe the people receiving money would quickly be exploited. I can imagine any number of schemes where an average person would simply wind up owing their $60 a day to someone else. That money would get factored in as income and people would be be given loans for homes and cars they otherwise can't afford. Flexible interest rates and inflation would ensure they weren't able to keep the cars and homes. After a brief up swing to the economy there would be a collaspe leaving an enormous amount of people permanently indebted.

 

I agree that giving away cash is easily exploited. People treat "found" money differently than earned money, and I think that would influence this type of program.

 

What's the spirit of this new program, to circulate capital or to take care of basic needs?

 

Any fund that comes from private sources is going to have plenty of caveats attached to it. I'm struggling to envision the Koch Brothers donating to a $6T program that gives their money away to just anybody. I'm sure they'd put provisions in where anyone who gets money from the Kochs has to use Angel Soft toilet paper.

[swansont]

Ugh. Thanks for the correction. That was indeed a sizable, frustrating, and embarrassing orders of magnitude error. What that means, though, is that funding this becomes even harder than I was originally highlighting. The impact on inflation would clearly be bigger at ~30% of the economy, too.

Most of the discussion has proceeded as if the right number was being used, but I worry that someone will see $6 billion and think "no big deal"

[Roamer]

60 dollar daily not a big deal

People would have less(no) need to work/produce as well, so less will get produced and prices would go up very hard, towards a point where 60 dollar daily realy isn't a big deal, i 'd estimate this point to be around 50% devaluation.

[Ten oz]

60 dollar daily not a big deal

People would have less(no) need to work/produce as well, so less will get produced and prices would go up very hard, towards a point where 60 dollar daily realy isn't a big deal, i 'd estimate this point to be around 50% devaluation.

This implies economic stability is directly associated to work/production. The less a person has the harder they work. I think that is a fallacy myself. there are productive people at every level of the economic ladder. Just as wealthy and poor people alike are responsible for various inventions that have transformed society. Money is merely a form of power. It is used to influence and control people. Sometimes for productive purposes and other times for destructive purposes. Either way money isnt the reason for human productivity. I do not believe in a world where everyone had economic stability production would suffer.

Edited September 9, 2014 by Ten oz

[Skeptic134]

I do not believe in a world where everyone had economic stability production would suffer.

 

I disagree.

 

I think we are creatures that inherently need motivation and that there are many jobs that are done solely because people require the money to sustain their lives.

[Ten oz]

I disagree.

I think we are creatures that inherently need motivation and that there are many jobs that are done solely because people require the money to sustain their lives.

There are also many jobs that could be done by machines or as collateral responsibilities of other workers but cheap labor is more profitable and or desirable. Whether its janitorial, farming, manufacturing, or etc the type of labor required is often decided by the cheapest means a business can exploit. That doesn't mean that type of labor is actually neccessary. Which is why throughout the history of many countries like the United States we were able to end unfair labor practices such but limited to Slavery, indentured servitude, child labor, unequal pay for women. Providing the people in those examples with better pay, more security, better treatment, and etc would have hurt the economies rather than helped by your theory. Rather countries that have unions, higher wages, higher levels of education, more economic stability, and so on tend to also have better economies and happier citizens. Even within countries regions with more economic stability thrive. Here in the United States from examples states with higher wages and more benifits for there residents ar more productive than right to work states that begrudgingly enforce the basic minium standards.

[Skeptic134]

There are also many jobs that could be done by machines or as collateral responsibilities of other workers but cheap labor is more profitable and or desirable. Whether its janitorial, farming, manufacturing, or etc the type of labor required is often decided by the cheapest means a business can exploit. That doesn't mean that type of labor is actually neccessary. Which is why throughout the history of many countries like the United States we were able to end unfair labor practices such but limited to Slavery, indentured servitude, child labor, unequal pay for women. Providing the people in those examples with better pay, more security, better treatment, and etc would have hurt the economies rather than helped by your theory. Rather countries that have unions, higher wages, higher levels of education, more economic stability, and so on tend to also have better economies and happier citizens. Even within countries regions with more economic stability thrive. Here in the United States from examples states with higher wages and more benifits for there residents ar more productive than right to work states that begrudgingly enforce the basic minium standards.

 

Any sources showing the productivity comparisons you are claiming?

 

I want to make sure I understand what you are saying; could you define what "economic stability" means to you?

 

Based on your claim that money isn't the reason for human productivity and that productivity would not suffer if everyone had "economic stability" I interpret that to mean you believe people would continue to "produce" without any need for financial reward.

 

Perhaps that isn't what you mean to say.

Edited September 10, 2014 by Skeptic134

[Roamer]

This implies economic stability is directly associated to work/production.

 

Hmm, work/production = economy, even though we often (only) measure our economy in money.

 

 

The less a person has the harder they work. I think that is a fallacy myself.

 

You're saying you're not gonna try to pitch in a few extra hours at work if you just lost your house/money/car/belongings ?

 

 

There are productive people at every level of the economic ladder.

 

Often the rich have very comfortable jobs, having people running around to appease them, while the crappiest jobs are paid least.

and the effect of the 60 dollar would hit the crappiest jobs hardest.

 

 

Money is merely a form of power. It is used to influence and control people. Sometimes for productive purposes and other times for destructive purposes. Either way money isnt the reason for human productivity.

Money is purchasing power, and the majority of us still use it to buy food, pay their rent and purchase other necessities

 

There are many more motivations for productivity, most still come down to some kind of compensation

[Ten oz]

 

Hmm, work/production = economy, even though we often (only) measure our economy in money.

 

 

 

You're saying you're not gonna try to pitch in a few extra hours at work if you just lost your house/money/car/belongings ?

 

 

 

Often the rich have very comfortable jobs, having people running around to appease them, while the crappiest jobs are paid least.

and the effect of the 60 dollar would hit the crappiest jobs hardest.

 

 

 

Money is purchasing power, and the majority of us still use it to buy food, pay their rent and purchase other necessities

 

There are many more motivations for productivity, most still come down to some kind of compensation

While what you are saying makes sense and generally would be accepted as correct it is not reflective of the actual state of the world. Countries with more poor people are not more productive than countries full of middle class people. Working harder to makes ends meat isnt the common thread of the most wealthy or productive Countries. Management of resources physical or intellectual is. Good wages, free educations, subsidized healthcare, affordable housing, and etc do not cripple economies. Does not encourage apathy.

 

Lots of people around the world live in poverty. Lots of peiple would do just about anything for pennies. Those areas of the world are not the most productive one.

[Phi for All]

I don't like the concept of giving away cash to everyone. I think it's already been shown that the OP is far too costly.

 

Can we continue discussion based on the title of the thread (if not, I can start a different thread)? That's what really attracted me in the first place. How do we merge a society that needs a healthy economy with one where basic needs are met for everybody?

 

Can we start with the premise that anyone living here should expect minimum subsistence with regard to food, clothing, shelter, and healthcare? Eliminating hunger and homelessness should be Job One for any country calling themselves both altruistic and a first world nation. I define minimum subsistence as being able to survive without spending any money (which seems reasonable if this program is aimed at poor people). To be fair, such a system would need to apply to Charles Koch as well should he go bankrupt and need America's help to keep from sleeping in the streets.

[Skeptic134]

Countries with more poor people are not more productive than countries full of middle class people.

 

Lots of people around the world live in poverty. Lots of peiple would do just about anything for pennies. Those areas of the world are not the most productive one.

 

You are assuming that the only variable in the productivity equation is how well off people are, which is clearly incomplete. There is much more to the productivity levels of different countries than how many poor people and how many rich people there are. To conclude that because the regions with the highest concentration of poor people aren't the most productive that financial compensation isn't a motivation for labor/work is erroneous.

[Ten oz]

 

You are assuming that the only variable in the productivity equation is how well off people are, which is clearly incomplete. There is much more to the productivity levels of different countries than how many poor people and how many rich people there are. To conclude that because the regions with the highest concentration of poor people aren't the most productive that financial compensation isn't a motivation for labor/work is erroneous.

I am merely pointing out how in practice there doesn't seem to be any connection between a work force being desperate and productivity.

You are right that there is also no direct connection between wealth and productivity. The wealthiest country per capita is not the most productive country. As I stated in my last post resources management, both natural and intellectual resource management, tends to be the key to a healthy economy.

 

For clarity, this is an off topic discussion. I do not think providing people with $60 a day as a form of altruism is a good idea.

I don't like the concept of giving away cash to everyone. I think it's already been shown that the OP is far too costly.

 

Can we continue discussion based on the title of the thread (if not, I can start a different thread)? That's what really attracted me in the first place. How do we merge a society that needs a healthy economy with one where basic needs are met for everybody?

 

Can we start with the premise that anyone living here should expect minimum subsistence with regard to food, clothing, shelter, and healthcare? Eliminating hunger and homelessness should be Job One for any country calling themselves both altruistic and a first world nation. I define minimum subsistence as being able to survive without spending any money (which seems reasonable if this program is aimed at poor people). To be fair, such a system would need to apply to Charles Koch as well should he go bankrupt and need America's help to keep from sleeping in the streets.

I appears to me that starting with the premises you listed has worked more often than it has fail in modern society.

Then again it could be argued that all the Countries in the world today with high standards of living got there partially built on questionable histories of imperialism?

Edited September 10, 2014 by Ten oz

[Roamer]

I don't like the concept of giving away cash to everyone. I think it's already been shown that the OP is far too costly.

 

Can we continue discussion based on the title of the thread (if not, I can start a different thread)? That's what really attracted me in the first place. How do we merge a society that needs a healthy economy with one where basic needs are met for everybody?

 

Can we start with the premise that anyone living here should expect minimum subsistence with regard to food, clothing, shelter, and healthcare? Eliminating hunger and homelessness should be Job One for any country calling themselves both altruistic and a first world nation. I define minimum subsistence as being able to survive without spending any money (which seems reasonable if this program is aimed at poor people). To be fair, such a system would need to apply to Charles Koch as well should he go bankrupt and need America's help to keep from sleeping in the streets.

 

How about 30 dollars a day ?

There would still be high inflation over time, but i don't see that as a major problem, if people want to save up they'll just have to invest their money somewhere or get interest from a bank.

I don't think many people would want to live off so little money, so the able are likely to keep working, and some of the crappier jobs will be forced to disappear or pay better.

Most of the existing welfare programmes could be scrapped as well, it'd be more honest and save a lot of bureaucracy/paperwork.

[Skeptic134]

I don't like the concept of giving away cash to everyone. I think it's already been shown that the OP is far too costly.

 

Can we continue discussion based on the title of the thread (if not, I can start a different thread)? That's what really attracted me in the first place. How do we merge a society that needs a healthy economy with one where basic needs are met for everybody?

 

Can we start with the premise that anyone living here should expect minimum subsistence with regard to food, clothing, shelter, and healthcare? Eliminating hunger and homelessness should be Job One for any country calling themselves both altruistic and a first world nation. I define minimum subsistence as being able to survive without spending any money (which seems reasonable if this program is aimed at poor people). To be fair, such a system would need to apply to Charles Koch as well should he go bankrupt and need America's help to keep from sleeping in the streets.

 

If the government is able to continue to only provide the minimum in terms of food, shelter, and access to medicine for all than I suppose there is no reason that both a healthy economy and a minimally altruistic society can't prevail.

 

That is a big if though, government always seems to naturally grow and continually expand “services”.

 

The system won’t suddenly make the poor (the ones requiring the altruism) productive because they suddenly have their basic needs met. It also won’t suddenly make those that are not dependent on the government subsidy to become more productive.

 

If the minimum altruistic provisions increase over time it will erode the healthy economy because the minimum provided for merely being alive will slowly equal and then surpass what at one point required trading production (work) to receive.

Edited September 10, 2014 by Skeptic134

[Phi for All]

How about 30 dollars a day ?

 

Fine. A $3T program funded by private interests as an altruistic alternative for economic advancement.

 

My personal incredulity isn't an argument, but I'm wondering where the history is that would serve as some kind of evidence a program like this would work nationally. I usually look for attached strings whenever private interests appear altruistic. And considering that much money is unlikely to be had from family fortunes, we can assume there will be corporate involvement in this program. I've found most corporations love to be on the receiving end of social programs, then switch to a Libertarian outlook when it comes to altruism, regulation, and taxation.

[iNow]

I disagree.

I think we are creatures that inherently need motivation and that there are many jobs that are done solely because people require the money to sustain their lives.

Yes, many jobs are done solely because people require money and are unable to find better jobs elsewhere for whatever reason. However, you do yourself a disservice if you fail to acknowledge that a great many people also do their jobs solely because they love it or take enormous pride in what they produce or the service they offer... Many of these people would quite contentedly work for free.

 

Following your logic, we'd be forced to assume that rich people never work, and yet they do. The world is not as monolithic as you seem to assume, and it's important when thinking in terms of motivation to recall that money is not the only motivator. You are right that we inherently need motivation, but passion and psychological fulfillment and a desire to give back to the world around us (for example) can be powerful motivators, too.

[Ten oz]

How about 30 dollars a day ?

There would still be high inflation over time, but i don't see that as a major problem, if people want to save up they'll just have to invest their money somewhere or get interest from a bank.

I don't think many people would want to live off so little money, so the able are likely to keep working, and some of the crappier jobs will be forced to disappear or pay better.

Most of the existing welfare programmes could be scrapped as well, it'd be more honest and save a lot of bureaucracy/paperwork.

Why money? What is actually more valuable in the long run $30 dollars a day or investments in infastructure? If a government makes things like healthcare and education free or housing affordable isn't that actually worth more than $30 a day. No body is getting through college or paying for a hospital stay with $30 a day. in some cases new rail lines, buses, express ways, and other forms of easing travel for commuters may actually save a person more than $30 a day.

For example; I spent several years working in the finicial district of San Francisco. Driving into the city meant a $5 bridge toll plus $30 for all day parking while I was at work. Plus about another 4-5 dollars in gas depending on road conditions made it around $40 a day just to go to work in my car. Fortunately the the San Francisco Bay Area they have a commuter rail line (bay area rapid transit) which I could take rather than drive. It cost about $6 dollars each way (lates 90's prices). So instead of a $40 dollar commute it allowed for a $12 dollar commute.

Cash in the hand isn't the only way to benifit people. Having billionaires pay for people to attend medical school or building more recreation centers in under privilaged communities helps too.