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Reactive government spending

Or how to please small government libertarians
  [vote for,

There are two parts to this idea.

Government has a habit of spending a lot of money very fast. Without much benefit for citizens.

Technological advances has created unprecedented growth in productivity since 1970. Productivity has increased and climbed while employee wages has stagnated. Something has to change.

Part One

I propose a solution: a proportion of tax is returned to citizens as unconditional basic income.

it doesn't matter how small the amount is collected, as long as there is a funnel that can collect money from all the pies that government has collectors in and return it back to citizens.

At the moment, with the exception of Alaska, and Iran (where there amounts are a couple of dollars) there isn't a universal basic income that amounts to anything significant and is a line item that is special cased. In Alaska it's Oil dividend and in Iran it's also only $1.50 from oil.

In essence, there is no mechanism for government to spend money directly - by giving money to citizens as part as income. What exists is through changes to taxation. For example, the UK has personal allowances which can increase in a year to "let" you keep more of your income.

There isn't a mechanism for giving money to citizens that isn't expensive. Such as the Trump bucks scheme in the USA. I'm proposing it shouldn't be special cased but should be part of government functions.

Here's the second piece to the idea: government spending should be reactive to the times we live in. One year we should decide to not invest in any *new* hospitals, new roads, new infrastructure spending, we should instead return what we would have spent back to citizens in the form of the universal basic income.

It's not even a surplus, it's what we would have spent anyway but instead of being spent on wild projects, is being returned directly to citizens.

Part Two - the reactive bit

One year the government can decide to divide prosperity by returning it back to citizens rather than investing in "things".

The government should be able to freeze all existing "additional investments" such as pay rises for public sector staff, additional road maintenance men and take all this money that WOULD have been spent and instead direct it to citizens directly.

This way everyone gets the benefit of what would have otherwise been reckless government growth. Governments are large enough already and every country can still claim to be non-socialist.

Governments grow inefficiently large through everybody demanding a piece of the pie to keep society running. I doubt it's truly necessary.

I dare say there's some effectiveness in borrowing to pay citizens directly due to the massive use of money after giving people money to spend. Market places tend to place assets efficiently, so giving people money to spend removes dislocations of asset allocations. The government can get a much better interest rate on borrowed money from the private markets than citizens.

Currently the government and central banks borrow money out of existence and pump them into markets to increase liquidity. The completely wrong way to go about improving the money supply. You need individuals, not financial institutions making financial decisions in the wider market that is society.

If people want the benefit of increased spending on road maintenance, they can choose to do so, nothing is stopping them from placing their assets on this social benefit.

This idea is a valve to allow government to become smaller, not bigger.

The idea is a valve for equality.

The valve is an alternative way of increasing prosperity of citizens. An alternative rebalancing of wealth.

chronological, Dec 02 2020

WTF happened in 1971 https://wtfhappenedin1971.com/
a set of graphs that show the dislocation of where wealth goes to since 1971, the Bretton Woods collapse [chronological, Dec 02 2020]

Universal basic income https://en.wikipedi...versal_basic_income
//In the late 18th century, English radical Thomas Spence and American revolutionary Thomas Paine both declared their support for a welfare system that guaranteed all citizens an assured basic income. Nineteenth-century debate on basic income was limited, but during the early part of the 20th century, a basic income called a "state bonus" was widely discussed//
//Bertrand Russell (1872–1970) argued for a new social model that combined the advantages of socialism and anarchism, and that basic income should be a vital component in that new society.
Dennis and Mabel Milner, a Quaker married couple of the Labour Party, published a short pamphlet entitled "Scheme for a State Bonus" (1918) that argued for the "introduction of an income paid unconditionally on a weekly basis to all citizens of the United Kingdom." They considered it a moral right for everyone to have the means to subsistence, and thus it should not be conditional on work or willingness to work.
C. H. Douglas was an engineer who became concerned that most British citizens could not afford to buy the goods that were produced, despite the rising productivity in British industry. His solution to this paradox was a new social system he called social credit, a combination of monetary reform and basic income// [pocmloc, Dec 02 2020]


       I like the spirit behind this idea, so have a croissant.   

       What if only engineers received the UBI? (EUBI) I can imagine it would be wonderful. I can imagine many things.
sninctown, Dec 02 2020

       Not a new idea. A good idea, but not at all new.
pocmloc, Dec 02 2020

       As we all know, tax revenues very rarely outpace government spending. Surpluses are rare.   

       Prosperity is a lagging indicator, and tax revenues do not match up with the time of spending.   

       I kind of feel that we should monitor prosperity and tax spending with as a lag in the data by 5 years or so, to truly see the picture of what spending generated what growth.
chronological, Dec 04 2020


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