Livable Basic Income: What is a luxury?
Abigail Welborn
42

The $2,000/month amount is clearly way beyond what we can conceive of affording right now, but I think it’s useful to get a dollar amount in your head.

The fact that you are thinking of UBI, or any form of the same, says that you are more flexible in your thinking than the average American, left or right. However, you just lost your own argument before you started by accepting the affordability ruse. It is what conservatives have used, mostly sincerely but many for nefarious purpose, to counter every progressive proposal since RayGun. They mostly do this because it works. If you have to collect tax “revenue” for such a program it quickly becomes both politically and mathematically impossible. Six hundred and forty billion dollars per month simply isn’t conceivable in the way we currently account for spending. Granted, that number is two thousand dollars times three hundred and twenty million individuals, so it is a bit high, but you can see the size of spending you are talking about this way.

I think it is obvious that such an endeavor is going to require a new way of thinking about money, and how we acquire it. I’m not arguing that it isn’t possible, only that it isn’t possible with today’s misconceptions and rhetoric surrounding the currency and debt. The good news is that a very unlikely pioneer (Nixon) paved the way for such a bold departure from normal economics by taking us off the gold standard for our currency creation. I doubt that he realized it at the time, but he took the “affordability” question off the table in the way the fiat currency now works. There has been no fanfare, even among liberal politicians, regarding the most monumental event in economics since our nation’s founding because it is a complete departure from past practices and the way people naturally think about spending and debt in any context other than the federal government.

As the monopoly issuer of the currency, with its “debt” denominated in that same currency, the US government can never fail to pay any obligation it wishes to pay. It can never “go broke” or run out of money. It also doesn’t need to find revenue or acquire debt prior to spending in any amount it deems necessary. In fact, it is literally impossible for it to increase the currency supply by “borrowing” its own currency as existing currency is required to purchase its debt instruments. Politicians have occasionally hinted at this (Deficits don’t matter — Dick Cheney) but no politician wants to pin his/her election chances on their ability to educate the public away from their preconceptions. If you’re explaining, you’re losing.

If you seriously wish to advocate for radical changes in how we deal with income and taxation, such as would be necessary to fund UBI, you would do yourself a great service by becoming intimately familiar with “Modern Monetary Theory”. It is not really a theory, but a different way of approaching how our system actually works at the federal level. It was first noticed by an economist/bond fund manager named Warren Mosler who is now a billionaire, retired, and running for the Governorship of the Virgin Islands. It is currently being taught by many schools of macroeconomics and is gaining acceptance quickly. A quick primer that isn’t as yawn inducing as most presentations of economics is available here.

Dr. Stephanie Kelton is the chair of economics at the University of Missouri, Kansas City. She is quite good at communicating boring material in a way that is interesting to those of us who appreciate such things. I am moderately familiar with the operations of the Federal Reserve and the Treasury and MMT as it applies to them and would be glad to answer any questions you might have, or direct you to a credible source for what I can’t answer.