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There's Only One Way to Pay for a Basic Income

Basic income gives consumers money to spend. The only way to pay for a basic income is by having an economy that gives consumers something to buy with that money. If our economy can’t produce enough goods to match the level of consumer spending, then we end up with inflation. There. I just gave you the answer. You can now skip the rest of this blog post. You’re welcome. For some reason you’re still here.

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Andrew Yang: Almost Not Wrong

As I’ve previously mentioned, basic income proponents fundamentally understand that our economy has the resources to do better for humanity. Andrew Yang understands this. He also understands that the economy exists to serve the people. Yang is a candidate running for United States president in 2020. His campaign slogan is “Humanity First” and he’s running with basic income front and center on his platform. Two weeks ago, I had the privilege of seeing Andrew Yang speak at a town hall meeting campaign event in Henniker, New Hampshire.

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The Wrong Thing to Tax Is Money

I explained last month that tax revenue is meaningless. But that doesn’t mean that taxes are all together useless. Taxation can have important positive (or negative) effects on the economy. It all depends on what we tax and how we tax it. And, as it turns out, money is always the wrong thing to tax. This must sound strange. Taxation is, after all, the taking of money. When I say we shouldn’t tax money, I specifically mean that the amount of money taxed should not depend on the amount of money or other financial assets that someone owns.

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Justice Is Overrated

Many of us are dismayed by the injustice we see in the world. We want our society to treat people fairly. Our sense of justice feels absolute and right and good. Yet different people hold incompatible views about what’s fair. How can this be? Could it be that justice is indeed objective and that some people happen to be getting it wrong? Do some people lie about what they think is fair when it’s in their interest to do so?

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Why Basic Income Makes No Sense

After having read my last post, a friend mentioned that basic income’s purpose had never before been clearly articulated to him. This is hardly surprising. People are confused about basic income. They’re confused about what it is and what it’s for. It bears repeating that basic income is a regular income unconditionally paid to every person. Basic income solves the problem of how to get spending money to consumers. It’s pretty straightforward.

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Basic Income Clichés

Basic income is simple. It’s a regular income unconditionally paid to every individual. It solves the problem of how to get spending money to consumers. That’s all it is and all it does. Among the many things that basic income is not, it is not defined to be an amount of money that’s sufficient to meet people’s basic needs. It could be less. It could be more. The income is basic.

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We Are All Disabled

My first post mentioned that the most remarkable thing about basic income is that it’s actually possible for us to hand out money to people. Interestingly, what makes basic income possible is also what makes it possible for us to pay out other cash benefits. Namely, the economy has sufficient resources to produce what people will buy with the money. In March of 2013, This American Life aired an episode about the increasing number of Americans receiving federal disability benefits instead of working.

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Tax Revenue Is Meaningless

Let’s conduct a thought experiment. Imagine that the government is a black box whose internal workings are completely opaque to us. We know that this black box can add money to the economy through spending or remove money from the economy through taxation. But we have no idea why the government is administering fiscal policy (spending and taxing) the way it is. This thought experiment allows us to consider the effects of fiscal policy without becoming distracted by its underlying politics.

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How I Cracked the Code on Basic Income

I live my life the way a procrastinator browses Wikipedia. Sometimes that literally means spending hours perusing Wikipedia. More generally, I have a compulsion to understand how things work and I’m at my best when I allow myself to pull on interesting threads to see what unravels. My background is in software development, but for the better part of the past decade I’ve been pulling on threads in economics. I came up with the idea for basic income in 2011 when it occurred to me that eliminating intellectual property laws would eliminate a large number of jobs without actually damaging the productive capacity of the economy.

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