Tralfamadoran777
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Thank you {{U|I dream of horses}}Tralfamadoran777 (talk) 23:16, 3 April 2015 (UTC)
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Feasibility edit
work in progress as of 10/28/2016
Feasibility of Providing a Citizen’s Income as a Product of Simple (relatively) Monetary Reform
I thank Malcolm Torry for the significant effort of producing “The Feasibility of Citizen’s Income" (Exploring the Basic Income Guarantee ISBN 978-1-137-53077-6 ISBN 978-1-137-53078-3 (eBook) DOI 10.1057/978-1-137-53078-3 Library of Congress Control Number: 2016940869), while the detailed treatment of Citizen's Income is the focus, the process and considerations appear appropriate for the forwarding of any legislation or proposal.
Especially for quite rightly insisting that I get, read, and prepare such a consideration for this scheme from it. This is my attempt. Currently anything within quotation marks with page numbers is from “The Feasibility of Citizen’s Income". Any cogency is attributable to the text, and of course misappropriations and distortions are entirely mine
The Scheme
Require sovereign debt to be backed with Commons shares, that may be claimed by each adult human on the planet, for deposit in trust with their bank, as part of an actual social contract.
The Rationale
Since the end of the gold standard our currencies are backed with Fiat, as any commodity makes an unstable base, and people were fine with simply accounting for new money.
For the developed nations, this means they may create money by borrowing it into existence, largely without the expected inflation, where this is not true of developing nations, that must pay unsustainable rates for their working capital, if they can get loans at all, along with other creditor requirements.
By defining fiat as the credit produced by the existence of a human being it becomes a defined and stable concept. This also assures that a functional and stable quantity of credit will be available world wide on an actual per capita basis. While the distribution to shares held in trust assures that the available credit will be invested based on local concerns, with the oversight of local fiduciaries and actuaries.
Distributing a Commons share of fiat to each adult human on the planet provides economic enfranchisement, inclusion, global social cohesion, a specific common focus with equal and shared implications and effects, and a secure quantum of capital, for little cost, as fiat has no physical substance, only the perceived substance of credit backed by the population of the Earth.
A primary concern here is allowing the people of developing nations to advance to developed nation status as quickly as possible, not only because it is the right thing to do, and will enable stability, but as population control, since we see that this is not so much a problem in developed nations.
A secure quantum of capital in this form also assures that a person surviving disaster, natural or not, or persecution, will have this to transfer to their new location if they escape.
By providing a shared base for the worlds various currencies, and distributing the interest in the various currencies on a per capita basis, expansion from newly created money will be proportional and should not provide inflationary pressure, while assuring some minimum level of economic activity on an actual per capita basis.
Requiring a social contract that meets minimum international standards reinforces the enfranchisement of each, and directs each level of each government to examine and clearly state the rights and responsibilities of each, and of government.
“Desirability”
The desirability of a global Citizen's Income is similar to, but less complex than for a single state, in that no competing benefit exists for comparison, there is no direct effect on existing benefits, and initially no change to taxation, so there is little to contest.
Equality of opportunity, fairness, enfranchisement, sovereignty, and market stability are among the desirable outcomes of the proposed rules change.
Equality of opportunity is generally believed to exist, by those with no impediments to opportunity, though many accounts, experiences, disagree.
The notion that each person has the potential to achieve a comfortable and satisfying life, is easy enough to accept, and while opportunities exist for a limited number of persons to achieve this, and more, the potential for all people to avail themselves of such an existence does not exist.
In order for each to have financial stability, enough money in the world to support such an existence would need to exist. So how much is that?
To provide an income of £1,000/mo for every adult human, at a sustainable growth rate, I like to think of 1,25%, something like £1,000,000 per capita would need to exist, and there simply isn't seven or eight quadrillion £ in existence. Though much of the world would seem to be undervalued, particularly the land in undeveloped countries.
While the proposed rule change would not create such a large amount of money, it would provide that potential, and would distribute a quantum of that potential to each person. That potential provides a minimum equality of opportunity.
The fairness of providing each with an equal share of anything is according to definition
Enfranchisement in the world economic system, an actual vote in what gets produced, can only be provided in a capitalist market with a minimum amount of secure capital. A quantum of the fiat that backs all currencies functions as secure capital, more perfectly than other forms. A Commons share has no physical form, can not be transferred to another, divided, or modified in any way. Commons shares would be forever attached to a unique set of biometric data, and cease to exist with its owner, the only possible function is to provide sovereign credit, and return interest to its owner.
Sovereignty is gained by that same secure enfranchisement, with the observation that this Citizen's Income is paid directly through the banking system as interest on owned property, and not a legislated welfare distribution from a superior government.
These desirabilities are superior to similar ones envisioned by Citizen's incomes included in a single country's social contract in that they are provided extra governmentally, and provide global economic improvements not imagined from single state welfare benefits. It appears unlikely though that such a structure would provide the level of income expected of a Citizen's income in a developed nation, and also likely would not support special benefits generally provided in social contracts. The structure would provide a single shared global identity, a global focus, a common complaint, and thus, greatly enhanced social cohesion, while easing the burden on single state social support structures, which would in turn provide greater acceptance for single state BIG programs.
A likelihood exists though, that as a result of this change, the examination of social contracts, and a reduction in economically driven immigration, that governments will begin to compete for citizens by improving quality of life and reducing the cost of living, which would then reduce the level of Citizen’s Income required to provide basic needs.
"Only the State can provide a safety net of last resort, so in a democracy, the government will be unable to resist providing such a safety net..." pg 3
Economic enfranchisement though provides a safety net of first resort. While also partially provided indirectly by the state through debt payments, much may be provided by sovereign citizens, and corporations, relieving some of the State's responsibility, and if established prior to single state Citizen’s Incomes, a wealth of new and valid data, along with a controlled and positive global example of Universal benefits.
If each adult human on the planet has a bank account and a quantum of secure capital, the term per capita becomes significantly more meaningful and useful in any economic calculation.
The desirability of the rules change though may concern some of those most powerful. The control of money creation by the developed nations, primarily the U.S., presents the largest hurdle.
How can these nations that strongly support democracy be convinced to extend democracy to the world economic system?
How can they oppose the expansion of democracy to the world through the shared economic system, particularly when the implementation and function do not impede the sovereignty of any nation, or people?
The notion of world hegemony appears to be recognized more and more as a fruitless, counterproductive, and wasteful Empirical indulgence. The best argument I can make is that if those in control may not homogenize the Earth to look like them, they are best off creating a system where no nation, or group of nations may do the same, a system where nations are allowed to concentrate on their administrative duties without the distractions, and harms, caused by meaningless conflict.
The largest and most obvious concern for the rule change is the loss of availability of secure investment. While secure sovereign paper and real estate make up a large portion of retirement funds, and this could negatively effect many, the potential and likely effects of moving that money into active investment, in a world with global economic enfranchisement is more likely positive than not, and the transition would be slow enough to make any needed adjustments, pause, or abort if that should become necessary. Either way valuable and valid data will be acquired. Ultimately no one has more of a right than another to a secure investment, which should reasonably be considered welfare for those with money to save, and such security is reasonably distributed to each.
In conclusion
Feasibility
"Would it be possible to administer a payments system that would pay a regular income to every member of a society?” pg 25
Yes. Each sovereign would make their debt payments to an aggregation and distribution fund that would divide and distribute the interest to each shareholder account.
"Would it be possible to manage the transition from the present benefits system to one based on Citizen’s Income?"
Yes. As sovereign debt instruments mature, or are retired, new sovereign debt will be offered to banks holding Commons shares. The current level of global sovereign debt would return a small monthly interest payment equivalent to about ten or twenty USD per month. Many countries paying higher than the suggested sustainable rate would be able to increase their debt without increasing their debt payments.
The U.S. average interest on their national debt is reported to be 2.232% for September 2016 - https://www.treasurydirect.gov/govt/rates/pd/avg/2016/2016_09.htm The current rate though, and for most of the developed nations, is well below 1%, and some are negative, so there may be tremendous resistance to paying higher fixed rates. It would be possible to establish the structure beginning in those developed nations that would have significant savings at a sustainable fixed sovereign rate.
"Would it be possible to fund the payments?"
Yes. Initially, the funding stream already exists, and will simply be diverted.
"Would there be any adverse effects on individuals or households?” pg 25
Possibly, the loss of access to most secure investment may affect some reduction in income from investment, but for most would not likely be greater than the Citizen's Income provided. The greater point here though, is that the interest paid on sovereign debt is the economic security provided by the state, and this economic security is available only to those with money to invest, the rule effectively distributes this economic security equally to each
"Would politicians be likely to vote for the proposal?—which would require a positive answer to the question: Would the general public, as well as politicians, understand Citizen’s Income and approve of the idea?” pg 25
We will see. Still asking...
"Would it be possible for a Citizen’s Income to travel from idea to implementation?” pg 25
Absolutely. Adoption of the rule will demand the codification of social contracts, the only additional new requirement is for an account product that includes an individual sovereign trust holding a limited right to loan money into existence to finance secure sovereign debt. The values I suggest for consideration: 1,000,000 credit, 1,000/month, 1,25%... allows a little less than 500/year/capita for banking and UN costs.
The rule simplifies the process of money creation while enfranchising each
"Will Citizen’s Income achieve the changes promised for it, particularly in the fields of household structure, income security, labour market freedom and flexibility, and social cohesion?” pg 26
Of course, as the claims are modest, and primarily structural, to provide opportunity.
"(W)ill the general public and legislators continue to understand and approve of Citizen’s Income?” pg 26
Undoubtedly, it is simple, and fair.
“Fiscal Feasibility” pg 39
As previously noted, the funding currently flows, so would require no change to taxation, only the transition to Commons shares from current funding of sovereign debt.
Countries currently paying unsustainable interest rates would be motivated to retire existing debt as rapidly as possible to take advantage of the reduced cost, and in many cases could borrow multiples of their current debt while maintaining their current budget.
The ubiquitous access to sustainably priced credit for secure sovereign investment, along with a rational upper limit, and tying each currency to a standard fiat credit is a stable and sustainable foundation
“Much of the money created by the banks buys assets that are in limited supply, such as houses, and it therefore creates price bubbles; too little of it is employed as investment in the productive economy; and if the loans are not repaid, then lending stops and a recession is the result. Interest on public and private debt transfers money from the poor to the rich and so increases inequality, and the payment of interest requires climate-changing economic growth, but attempting to reduce the level of debt reduces spending, reduces the amount of money in the economy, and can lead to recession.” pg 46
With the proposed change, most of the money created by the banks will be used for public projects and viable business models, and houses still, though with fiat distributed to banks by individual depositors, life at a distance from expensive metropolitan areas will become more sustainable as more investment capital will be available if people simply move there and transfer their shares. The interest paid in this case then would be as it is in QE, except that the payments collected in taxes will be paid directly back to each, instead of back to the government or central bank, and growth may be held down by fixing the sovereign rate below that of sustainable growth. The proposed change also makes sufficient credit available to achieve maximum spending, such that spending is limited by the availability of material and labor, or full employment.
“Jackson and Dyson argue that banks should be prevented from creating money, and that an independent body should be charged with creating money and spending it into the economy as government spending, tax reductions, direct payments to citizens, or lending to banks on condition that the money is lent to productive businesses. ‘The monetary system, being man-made and little more than a collection of rules and computer systems, is easy to x, once the political will is there and opposition from vested interests is overcome.14” pg 46
The proposed change, not addressing operations separate from Commons shares, would provide funding primarily for government spending, and exclusively for secure lending, without directly interfering with current activity. This should ease concerns while creating money on a per capita basis, proportionally, in the various currencies, maintaining the existing relative status of the various states.
“Geoff Crocker has pointed out the increasing gap between the value of production (Gross Domestic Product: GDP) and the total value of wages. This means that wage income is no longer sufficient to absorb the goods and services produced by an economy, so domestic debt has to be employed to fund consumption. Increasing debt is unsustainable, so regular financial crises are inevitable. A solution would be for governments to fill the gap between the value of production and the value of earned incomes by paying newly created money in equal amounts to every citizen. This would release the real economy from artificial financial constraint, and deliver sound finances built on productivity advances. It would also greatly enhance social cohesion.15” pg 46
I suggest that it is the perpetual increasing of debt that is unsustainable, that establishing a sustainable level of debt is possible, and that that level may be adjusted to provide a stable Citizen’s Income determined by market demand and limits set.
“Household Financial Feasibility” pg 67
The proposed change, by paying amounts to each shareholder would potentially reduce existing means tested benefits. Only where means tested benefits are reduced at a rate greater than one to one would there be a net loss.
“Strategic Feasibility” pg 27
The strategic obstacles for a global Citizen’s Income may be less difficult to manage than for a single state, as the actors governing Basel, OCC, FPC, and the other relevant agencies are a more cohesive group, a much smaller group, and theoretically, a higher educated group.
“Political Feasibility” pg 28
The proposed change is coherent with the stated “…political ideologies of the agents that need to act in order for Citizen’s Income to achieve implementation.” pg 28 Of course, we can’t really know whether the stated aims and actual aims are similar.
As a primary focus of financial regulation and reform is stability, the stability reasonably expected from global economic enfranchisement should reasonably be accepted by these agencies.
Observing the https://www.weforum.org/agenda/2016/01/what-are-the-10-biggest-global-challenges/, it is apparent to me that the proposed change would impact each challenge positively.
(Now I need co cover each, I suppose)
“Political Process Feasibility” pg 28
Here I must admit to a complete lack of knowledge concerning the process of forwarding such a notion through these agencies, and an expectation that if a very few specific people are convinced of the value of such a change, the process will be not only feasible but under way.
“Institutional Feasibility” pg 28
Since the proposed change requires only a simple restriction of the source of financing for sovereign debt, and an account to aggregate and distribute the interest paid on sovereign debt, administration should be rather simple, and feasible.
“Behavioural Feasibility” pg 28
Because the proposed change simply creates a structure to distribute the interest paid on global sovereign debt to each claimant/shareholder, and to define and limit fiat, individuals and households should only expect a very small, rather token payment monthly, along with a vast potential. This is reasonably assured.
“Psychological Feasibility” pg 29, 87
The proposed change should not confront the same psychological barriers faced by a single state welfare distribution program, because it isn’t a welfare program, it is a securing of previously unrecognized property and enfranchisement in the economic system. As such, no one is getting something for nothing, and each is getting the same thing. The envisioned initial income provided would have little effect in most locations on a need or requirement to work, and current financial status is not relevant.
The requirement for a local social contract has a powerful psychological potential.
The examination and review of current social welfare infrastructure in the context of a global society, with each having a significant stake in the process should reasonably have a positive effect on social cohesion.
While there is really no way of knowing how a particular individual will react to the possibilities presented, considering the magnitude of the change, strong feelings should not be evoked.
“I shall also agree with Stuart White when he suggests that the expectation of contribution has to be conditional on society being sufficiently just:” pg 92
Reciprocity is provided explicitly with acceptance of a social contract, even if the requirements are simply to adhere to international and local law, and to deposit their share in trust, and economic enfranchisement will move society toward being more, if not sufficiently just.
Conclusion
It may be easier to create a structure for a global Citizen’s Income as an example and functioning social experiment than to legislate a single state Citizen’s Income.
Tralfamadoran777 (talk) 02:29, 31 October 2016 (UTC)