Without exception, every idea, plan, or proposal for a Basic Income Guarantee is fatally flawed. Worse, every one of them strengthen the Big Lie, since they are all based on the presumption that Monetarily Sovereign governments run on tax revenue and loans.
You and I know that governments with full (or nearly full) Monetarily Sovereignty have no need or use for loans or for tax revenue. Such governments create money out of thin air by crediting bank accounts. Hence there is limitless money for a Basic Income Guarantee (which I call Universal Social Security).
Granted, euro-zone governments can no longer create their spending money out of thin air, since they surrendered their Monetary Sovereignty to the bankers – but they can reclaim their Monetary Sovereignty by reverting to their old currencies.
The failure (actually the refusal) to understand these simple facts causes advocates of a Basic Income to propose that the money for such a program will come from tax increases and / or government “borrowing” increases. That’s their Achilles heel. Their willful refusal to understand Monetary Sovereignty allows their proposals to be torpedoed by the simple question: “How would we pay for it?”
The refusal to understand Monetary Sovereignty allows people to falsely claim that Social Security is “unsustainable.” Imagine how people would scream if Social Security was made universal!
I speak of willful refusal, because people’s desire for a Basic Income is not sincere enough to make them try to understand the nature, origin, and function of money. Instead, they talk only of things like capitalism (e.g. “A basic income would sustain the aggregate demand that capitalism needs.”)
In reality, only the real economy needs an aggregate demand. By contrast, the financial economy (i.e. Wall Street and “the markets”) only needs gambling casinos.
Advocates of a Basic Income propose that every citizen get a Basic Income. This shows that they have overcome their desire to widen the Gap between themselves and everyone below them on the scale of wealth, power, and prestige. That’s good. However they still want to narrow the Gap between themselves and everyone above them. They propose that rich people pay more taxes. Many proponents actually use the term “redistributive.”
“How will you pay for it?” they are asked. Without a proper understanding, their only answer is, “More taxes and borrowing.” This turns average people off, such that advocates cannot even get to “square one,” let alone address other barriers to a Basic Income.
If we turn off average people, then how will we ever fight against rich people’s (and politicians’) desire to keep us poor and powerless?
A Basic Income would shift power from capital to labor. Our owners would never allow this voluntarily. Thus, we can only defeat our owners by collectively understanding Monetary Sovereignty. This means collectively changing our assumptions and our beliefs.
Of course, changing our beliefs is usually very difficult. Our greatest battles are those with our own mind.
Moreover, Basic Income advocates do not understand Gap dynamics. They think that rich people should welcome a Basic Income as a stimulator of collective demand. However the very rich don’t care about collective demand, except to the extent that it can support the financial economy. The true Masters of Capital make their money in the casinos (i.e. the “markets”). If weak demand in the real economy causes the Gap to widen between the rich and the rest, then so much the better. And if weak demand causes average people to seek loans from the rich, and thereby become debt slaves, then that’s better still.
In other words, Basic Income advocates underestimate the malice, hatred, and greed of the rich, who want us to suffer, since our pain is what makes them feel “rich.” The very wealthy will always allow a small percentage of us to have jobs in order to keep society from collapsing – but they will keep the vast majority of us in misery, so that they can feel “rich.”
Medium size corporations, and even large corporations still depend on sales, and therefore on collective demand. But we’re talking about the ultra-rich money masters, such as hedge fund managers, or top members of things like the Carlyle Group.
Furthermore, Basic Income advocates also do not understand Gap dynamics among the lower classes, which is another barrier.
Then there are contradictions among the Basic Income advocates themselves. A moment ago I read this…
It sounds too good to be true. We are taught to be suspicious of anyone promising a free lunch. Giving people money for doing nothing certainly seems like a free gift. Fear of scarcity is built into our DNA. For the Basic Income Guarantee to seem viable for most people, they need to learn that demand, not supply, is the bottleneck of growth. We need to recognize that money is something humans create, not something with fixed and limited supply.
Really? Then why must we raise taxes in order to have a Basic Income Guarantee? Think about what you are saying.
If technological progress continues to eliminate jobs, the Basic Income Guarantee may well be the only way we will be able to maintain demand in a post-work future.
Why should the very rich care about maintaining demand? The entire world could become like impoverished nations. The ultra-rich don’t care, since they will still be rich.
By giving every citizen a monthly check, a Basic Income Guarantee (BIG) will be as fiscally simulative as World War II without requiring the murder of millions. The BIG is economically sensible and politically practical. What then stands in its way?
The problem is that it would narrow the Gap between the various classes, which most people don’t want to happen. Just as the very rich don’t feel fully rich unless everyone below them suffers, so do (most) middle class people not feel “middle class” unless they know there are people below them.
The second problem is sociological. We feel that our work makes us more worthy than lazy people on benefits.
That’s Gap dynamics talking. Rich people and right-wingers think that everyone below them is lazy and worthless.
Gap dynamics trumps everything, including collective survival. As Rodger says, most people will sacrifice their comfort as long as they know that people below them must sacrifice even more.
By the way, a few governments are talking about having a Basic Income, but this is a sham. The topic has only been raised because of popular initiatives, which the politicians resist, since politicians want us to be weak and helpless before them.
For example, in October 2013 in Switzerland, a popular initiative for a Basic Income collected 126,000 signatures, which was enough to gain the right to hold a national referendum that will supposedly be held sometime in 2016.
In Switzerland, before the referendum is held, the two houses of parliament can issue recommendations for people to vote in favor or against it. On 23 Sep 2015, the National Council (the lower house of parliament) recommended to vote against Basic Income. The vote was 14 in favor of a Basic Income, and 146 against. (91% of Swiss politicians were against it.)
Sebastian Frehner of the Swiss People’s Party (SVP) called it “The most dangerous initiative ever!” He said that Basic Income would swallow all of Switzerland’s money, and spell “the end of Switzerland.” Daniel Stolz of the Liberal Democratic Party (FDP) called it “A released grenade in our hands!” Bernhard Guhl of the Conservative Democratic Party (BDP) said, “Don’t endanger our prosperity!” Peter Keller Swiss People’s Party declared, “You don’t even care who will be paying for that!”
On December 17 Dec 2015 the Council of States (the upper house of the Swiss parliament) unanimously approved a motion calling for people to vote against a Basic Income. They too said that if people were lifted out of poverty, the world would end.
Unless you are armed with the facts of Monetary Sovereignty, you can have no answer to these lies. Indeed, you cannot help but strengthen them.