Ely Sage basic income

Of course, there are objections to UBI, mainly revolving around how it would be paid for. However, since the financial crisis we know that governments really can create money out of “thin air” so in reality that argument is a non issue. UBI would perhaps lead to problematic inflation but the best guard against this would be to introduce it gradually. Additionally, government creation of money for UBI would be from a non debt source and thus banks’ money and credit creation could be more substantially controlled with much less effect on the economy, with the added advantage of less indebtedness to create the same amount of money overall.

We’ll just print the money and give it to everyone.

Hmm.

52 comments on “Ely Sage basic income

  1. However, since the financial crisis we know that governments really can create money out of “thin air” so in reality that argument is a non issue.

    Hmmm. Coincidentally:

    Peter May

    The remaining business was sold. And the bank was persuaded to show some ‘debt forgiveness’!

    What a clever bank, they must have just conjured it up out of thin air…

    Radical politics was always an abiding interest – there was just never sufficient time to get properly involved – until now! He regrets having to share the same surname as a Prime Minister who will be responsible for Brexit.

    How absolutely ghastly.

  2. ‘…we know that governments really can create money out of “thin air”…’

    That’s news to me. Spud, as usual, has no evidence for his own pet theories while demanding high levels of evidence for theories and facts he denies.

  3. If the government can make money out of thin air, why does he insist on so much bloody taxation?

    I can’t actually find this post on his blog; otherwise I’d put the same comment there.

  4. ” However, since the financial crisis we know that governments really can create money out of “thin air””

    And yet they got all pissy with me when I did it. (joke!)

  5. government creation of money for UBI would be from a non debt source

    Does he elaborate on what and where this is?

  6. If the government can make money out of thin air, why does he insist on so much bloody taxation?

    Tsk, taxation is needed to mop up all the money the government has created out of thin air. Keep up!

  7. Why don’t they pay us footballers wages? Then we can all retire & live like kings.

    And how do you introduce it ‘gradually’? Isn’t the point that you give the basic income to everyone at the same rate at the same time?

  8. “We’ll just print the money and give it to everyone.”

    Let’s be clear, that is just straight-up Nazi bollocks. It’s literally right out Mein Kampf via a translator.

  9. Dave – “Let’s be clear, that is just straight-up Nazi bollocks. It’s literally right out Mein Kampf via a translator.”

    God you’re a tiresome c**t. Quote the page then.

  10. > Tsk, taxation is needed to mop up all the money the government has created out of thin air. Keep up!

    My God, the watertight circularity of his argument is impressive!

    Candidly, the print-tax-mop cycle is completely different to the borrow-tax-repay cycle. (To be fair, there’d be an inflationary shock during the first year of his system; but after that it’s exactly the same.)

  11. @momoi

    No. It’s about washing away a massively complicated system of benefits and allowances and rules and just giving people the money that they’re going to get anyway.

    How to fund it is unrelated. It could be through a similar tax system to the current one, it could be with a different tax system (LVT, perhaps), it could be by printing and mopping.

    The crazy thing is, printing and mopping is fine in theory… the problem being that it’s the same people running both the printer and the mop. And those people are politicians who have proven that they can’t be trusted with either.

  12. If it is universal does that mean we all get it regardless or is it means tested. If universal is it meant to replace all other benefits (easily £30k of net benefits for people living in council houses on London) or is this just some minor sum we all get. If a more significant sum (enough to survive off) would it not just be our own money paid back to us since they’ll just abolish the tax free allowance and jack up other taxes to pay for it.

    You can create money in a second but you cannot create wealth/assets/consumer goods/ at the same rate so all this is is another set of wealth transfers from the producers (Mel Brooks or Ayn Rand, take your pick) to the looters.

  13. The crazy thing is, printing and mopping is fine in theory…

    1) No one could trust the extent of mopping that would be needed to be effective (as the printer / moppers are desperate for votes to get re-elected). Hence printing will always exceed mopping.

    2) Those that believe in printing and mopping also tend to believe that “printing in excess of mopping” (ie government debt) = wealth (because it also represents private savings). Ie, they see this as a virtue!

    Since when did public spend on diversity officers, and all sorts of other worthless crud, represent or create any notion of “wealth”.

    the problem being that it’s the same people running both the printer and the mop. And those people are politicians who have proven that they can’t be trusted with either.

    Exactly.

  14. I refer the Hard Right contributors on here to the paper’ Money creation in the modern economy’ from the BOE which in addition to proving you are all a bunch of morons helps cure cancer and promote world peace.

    Bear in mind I am clever and you are not

  15. It’s not money we want it’s wealth. Money is a mechanism for moving wealth around and for recording increases or decreases of that wealth. The problem for them is not the lack of money it’s the the wrong people have the money and this is their sly way of moving it around.

    To say an economy needs more money is like saying to create more roads we’ve halved the length of a mile and doubled amount of roads we have. And yes I’ve read the BOE paper blah blah blah. Make your argument in clear English about the impact on people’s wealth holding, it’s a fucking tax.

  16. @ sneezy

    Everyone gets it. No means test. You’d drop stuff like the personal allowance.

    So good working types who don’t get cash benefits (approx 23 people, thanks to Gordon Brown) would just be taxed more and get it back as UBI. But others would get what they get anyway but without the paperwork, the work disincentives etc.

  17. I’m all for simplifying the benefits system but it’s a safety net. It shouldn’t trap you from getting on, but it shouldn’t provide a decent lower middle class income. Life in benefits should be hard, go to friends or charity if you want more than a safety net. Incentives matter.

  18. Would one of you mind confirming my understanding? It’s because the ‘thin air’ money is from a ‘non-debt source’ (ie not drawn against illiquid or predicted, future wealth) that it’s rampantly inflationary, yes?

  19. Sorta.

    It’s new base money, new M0. That’s why it’s rampantly inflationary. New credit, new loans, that’s M3 or M4, which is less rampantly inflationary. Same end effect as you say, just a slightly different explanation to be consistent with the rest of theory.

  20. “It’s about washing away a massively complicated system of benefits and allowances and rules and just giving people the money that they’re going to get anyway.”

    I recommend “washing away a massively complicated system of benefits and allowances and rules.” The end.

  21. ‘UBI would perhaps lead to problematic inflation but the best guard against this would be to introduce it gradually.’

    So Richie is okay with inflation (though he seems to have some concern about the rate).

  22. If your economics are Austrian all increases are inflationary, as that is the definition of inflation (growth of the money supply), price rises are a second order effect. People like to talk of price rises in specific sectors, (e.g. NHS costs) as having their own inflation, this sounds all clever and sophisticated but it’s bollocks, strip out inflation (changes in money supply) then the rest is down to supply and demand or market interference (including rent seeking).

  23. it shouldn’t provide a decent lower middle class income.

    That’s the Basic part of UBI. Enough to not starve and have a roof over your head. End of.

    Unfortunately, it’ll be politicians setting the amount, so every election there will be a competition to see who can shake the magic money tree the hardest to give away the most UBI freebies.

  24. Ahh, I thought he’d gone quiet on this bollocks because he’d realised it was, well, bollocks.

    But of course, he’s courting the SNP and having told them all they’re either idiots or Westminster stooges, he’s using the same heavy petting he used with JC (who can stand the IRA, Hezbollah and Hamas, but just can’t abide Murphy); economics doesn’t matter you can just create money so that nothing costs anything.

    Yeah, right.

  25. “He regrets having to share the same surname as a Prime Minister who will be responsible for Brexit.”

    And the great cricketer Peter May is spinning in his grave seeing the moron who is abusing his name.

    I’ve done a fair bit of reading and listening to programs on UBI and at the basic level it does seem doable. There’s been a few trials that were promising.

    The problem, as others have pointed out, is thebpolitics. Politicians just won’t leave it be and always want to give their client base a special bit of help.

  26. B Ark thinking. “Since we made leaves legal tender we have all become stinkingly rich. We have run into a sort of inflation things so we will burn down all the trees”=

  27. UBI is bollocks. Most of our current benefits bill goes on disability / incapacity / carers allowance / etc. Only a tiny amount (about 3%) goes on Jobseekers’ Allowance. The big adminstrative headache is checking whether people are really physically unable to work, and evaluating just how disabled they (or their children) are, and thus how much money they ought to be given. UBI won’t get rid of any of that admin. Whenever you see a TV programme called “Benefit Spongers” or whatever, you’ll notice that most of them are claiming some kind of disability, not jobseekers’ allowance.

    The other problem is that UBI will be too effective. Plenty of people will claim UBI, top it up with maybe 12 hours a week working at the local supermarket, and spend the rest of the week playing video games; or writing comments on Tim’s blog.

  28. The other problem is that UBI will be too effective. Plenty of people will claim UBI, top it up with maybe 12 hours a week working at the local supermarket, and spend the rest of the week playing video games; or writing comments on Tim’s blog.

    So what?

    If that’s how someone wants to live their life, that’s their business.

  29. UBI is not really an ideological thing, it’s just another way of administering a benefits system. (Of course, people who are against any benefits are against UBI, but it is not really possible to address that argument.)

    What really stuffs UBI as a practical idea is mass immigration, if it is possible as it is now. Millions of people will come to the UK from poorer countries to claim their UBI and send most of it home. It just wouldn’t work without complex rules controlling who can claim it, and that would defeat the whole object,

  30. BiW

    Plenty of people will claim UBI, top it up with maybe 12 hours a week working at the local supermarket, and spend the rest of the week playing video games; or writing comments on Tim’s blog.

    So what?

    If that’s how someone wants to live their life, that’s their business.

    Because, post UBI under that scenario, there will be less productivity? Therefore, less tax generated to pay for UBI. Rate of UBI has to change (ignoring magic money trees). Where does that equilibrium (at lower levels of national productivity) end up?

    FWIW, I think that is exactly what will happen – ie people working less in total, and at which point it all simply risks breaking down?

    I may judge it otherwise when someone can show me a model, post UBI for what they think it will look like. All the critical info including “total money” and “money / person”, split by income groups – for income, tax collected, etc (compared to prior). And with the knock-on effects of any expected changes of behaviour included in that analysis, with some sensitivity analysis for those changes.

    I mean, someone will do something as basic as that, won’t they, given how it’s obviously going to be so beneficial?

  31. It is a good thing the UK is taking back control then. Restrict BI to citizens and job done.

  32. Spiro Ozer

    UBI is not really an ideological thing, it’s just another way of administering a benefits system.

    Is that true? If one doesn’t currently receive any benefits, they would start receiving them under such a system?

  33. Wasn’t the benefit cap meant to be about £21k net (and so include housing benefit)? If UBI doesn’t include housing benefit it’s not really a basic income. Do we all get £21k UBI per family, if not , it’s not very universal.

  34. PF,

    The US and Canada trials did in fact show a reduction in hours worked. This was primarily pregnant women and mothers of young children, people we generally want working less. We need to redo studies in developed nation since the traditional family structure has been destroyed.

    There are plenty of studies that try to predict what will happen. You sentence structure suggests that you view UBI as a temporary program. The studies I’ve read don’t consider what happens after UBI ends.

    Perhaps I am misunderstanding what scenario you want modeled. Here is a link to a large number of BI studies. Perhaps the information you want is available.

    http://basicincome.org/research/

  35. Andrew M nails it.

    Its politically impossible to get to a UBI from where we are (a means and needs tested welfare system) because vast amounts of the current system provide an income well in excess of that any feasible UBI ever could, mainly because (as he points out) there’s massive % of the welfare system aimed at the ‘disabled’, most of whom are not disabled in the ‘deaf dumb blind or in a wheelchair’ sense.

    So unless all the money currently poured into the disability welfare pot is included in the UBI, then all you’ll have is exactly the same incentives for people to game the welfare system to get ‘on the sick’ as there is now. Once the U in UBI is lost, and there’s classes of people who get more than UBI, then the benefits are lost and system will ultimately fail.

    I think there’s a fundamental reason why no country in the world has a UBI, namely that nations wealthy enough to afford them already have means and needs tested welfare systems that are generous enough that no affordable UBI could match for large number of people, and so change is politically a non starter, and countries that don’t have entrenched welfare systems already can’t afford UBIs, because they are poor.

  36. Pilot studies of UBI don’t show all those negatives listed above. oK this is Wiki but you can find these studies if you doubt their summary:

    “Pilots in United States in the 1960s and 1970s Edit
    Beginning in the end of 1960s there were five basic income-experiments in the United States, all of which took the form of a negative income tax. Alicia H. Munnell, examining experiments in Indiana, Seattle and Denver,[1] explains that Gary Burtless found a moderate reduction in work effort (17% among women, 7% among men). She also found that the money was not squandered on frivolous products such as drugs and luxury goods. There was an increase in school attendance, but otherwise, no noticeable improvements to health and well-being and a negligible effect on homeownership rates.

    Mincome in Manitoba Edit
    A similar experiment, known as Mincome, took place in Dauphin, Manitoba, Canada from 1974-1979. According to a study by University of Manitoba researcher Evelyn Forget in 2011 there were some reduction in work hours, but on the other hand more people studied and the overall health got better.[2]

    Native American casinos and tribal profit sharing Edit
    A longitudinal study of 1,420 low income children in rural North Carolina designed to observe their mental condition had the unintended result of also measuring the effect of an unconditional cash transfer on a subset of this group.[3] The Great Smoky Mountains Study of Youth found that a quarter of the families (those belonging to the Eastern Band of Cherokee Indians) experienced a surge in annual income due to a newly built casino. During this study, a portion of the profits of this casino were distributed unconditionally to all tribal members on a semi-annual basis.[4] Key findings of this study include: lower instances of behavioral and emotional disorders among the children, an improved relationship between parents and their children, and a reduction in parental alcohol consumption.[5]”

  37. I don’t mind the idea of UBI, but like many of the others here, I really don’t trust people to get a handle on the U part.

    What reasonable existence would a Labour Party have under a UBI scheme that they adhered to? “Everyone requires a living wage” is done. That’s the reason for their existence, and like UKIP with Brexit, they’re nothing without it.

    So they would immediately move onto trying to grant exceptions. Destroying the whole project in the process.

    The Labour Party members supporting UBI aren’t very clever. No surprise there.

  38. There are plenty of studies that try to predict what will happen. You sentence structure suggests that you view UBI as a temporary program.

    I simply see it failing, that’s all I meant.

    Perhaps I am misunderstanding what scenario you want modeled. Here is a link to a large number of BI studies. Perhaps the information you want is available.

    http://basicincome.org/research/

    A credible proposal supported by a sufficiently robust quantitative / financial analysis, and ideally relevant to the UK (as this is what we are talking about).

    Rather than simply a vague / theoretical qualitative narrative?

    Thanks for the very extensive link, I appreciate it, but I don’t have the time to go searching through it all (for what I am looking for above) on a “may be”?

    And apologies, it was slightly rhetorical, in that I wasn’t actually expecting anyone here to come up with something in response, as no one has formally proposed anything for the UK? I was simply suggesting that, if anyone is ever serious about this, one would hope it’s going to be a credible proposal?

    I think most of the other objections above explain very well why this is unlikely to see the light of day any time soon?

  39. The results of ending a BI scheme will depend on how it ends. The range is anything from switching to a system that is better or a depression. I fail to see a reason why you expect anyone would have done a study about ending a program that hasn’t been implemented, at scale, in the real world.

    When dealing with modern politicians credible proposals are rarely seen.

  40. The big problem with UBI is that there will be incessant pressure on politicians to increase it. The old “spend other peoples money to get votes”.

  41. LY

    I fail to see a reason why you expect anyone would have done a study about ending a program that hasn’t been implemented, at scale, in the real world.

    No – I meant model how it is intended to “work”, not model how it ends (fails).

    My post April 26 – 7.25pm:

    Para 1 & 2

    I don’t think this works, and hence ultimately it will fail.

    Para 3 & 4

    But OK, if people are serious about implementing this, we will see a credible, robust proposal for its implementation, won’t we (and not just lots of fine words)?

    That was it – I think we were at cross purposes..:)

  42. That’s the Basic part of UBI. Enough to not starve and have a roof over your head. End of.

    At which point, we move in with my girlrfiend’s parents, we all quit work, and we can lounge around at home for the rest of our lives, except when we’re taking several cruises a year.

    The idea is so laughably stupid that it’s hard to believe anyone could fall for it.

  43. “At which point, we move in with my girlrfiend’s parents, we all quit work, and we can lounge around at home for the rest of our lives, except when we’re taking several cruises a year.”

    But the prices will increase, so you cannot afford to do that without an increase in your ‘basic income’, oh and guess what? That fucking spiral will end with carrotts going for £10000!

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