Guaranteed Income Could be a Game Changer

By MARK ANDERSON

Society could be at the brink of an extremely vital renewal that, if clearly understood and boldly and intelligently implemented, could pave the way for far “calmer waters” economically, politically and socially.

I’m referring to the movement to give every adult in the United States a $1,000 cash “handout,” or dividend, per month. It could grow the economy by $2.5 trillion by 2025, according to a new study by the Roosevelt Institute on what’s known as “universal basic income.”

This is essentially the same proposal that Swiss voters narrowly defeated last summer. Roosevelt research director Marshall Steinbaum, Michalis Nikiforos at Bard College’s Levy Institute, and Gennaro Zezza at the University of Cassino and Southern Lazio in Italy co-authored the study.

“The study made economic forecasts for three proposals: a full universal basic income in which every adult gets $1,000 a month ($12,000 a year), a partial basic income in which every adult gets $500 a month ($6,000 a year) and a child allowance in which parents get $250 a month ($3,000 a year),” CNBC online reported.

“A $1,000 cash handout to all adults would grow the economy by 12.56% after eight years. … Current Congressional Budget Office estimates put the GDP at $19.8 trillion. The cash handout would therefore increase the GDP by $2.48 trillion,” CNBC continued. “The $250 allowance would grow the GDP by 0.79% and a $500-a-month payment would grow the GDP by 6.5%.”

But here is where things begin to wobble. These estimates, says CNBC, “are based on a universal basic income paid for by increasing the federal deficit.”

Researchers also calculated what would happen if the cash dividends paid to the people were offset by increasing taxes. In that case, there were would be “no net benefit” to the economy.

“When paying for the policy by increasing taxes on households rather than paying for the policy with debt, the policy is not expansionary,” the report says, giving what are arguably false alternatives. “In effect, it is giving to households with one hand what it is taking away with the other. There is no net effect.”

The glaring gap in this Roosevelt study is that it overlooks the key thing that would actually make a regular citizen dividend work: We have to avoid money transfers based on redistribution, where we tax one segment of society in order to pay out the dividend — just as we must avoid more borrowing, which creates a larger deficit and more debt.

Instead, we must create new money interest-free through the Article I constitutional power of Congress. In other words, ladies and gentlemen, we’re facing a financial, political and social abyss and we have to know exactly how to proceed.

Adopting this proper process would necessarily mean that the banking system’s monopoly of money creation would be trimmed or possibly ended altogether. In that vein, take note that the real fourth branch of government has nothing to do with the press; instead, it’s the financial-monetary power along with the legislative, executive and judicial branches. In 1913, however, the US government surrendered its money power to the newly created, privately-owned Federal Reserve System and that power must be reclaimed.

2017 is the 100th anniversary of British engineer C.H. Douglas’s discovery of “social credit,” which is a broad monetary-societal reform that contains the proper formula for solving a real problem.

During his in-depth engineering work for the British government, Douglas found that the manufacture of goods racks up costs and creates prices far in excess of the purchasing power that it also meagerly creates through wages and salaries.

This is not just some abstraction. Once Douglas confirmed this production-consumption gap, he devised “social credit,” wherein a dividend is regularly paid to the people to the same extent, per production cycle, that there’s a shortfall in purchasing power when goods come off the production line, steeped in production costs, including labor costs.

Douglas knew that the dividend had to come from somewhere other than the labor market. In other words, society needs a direct infusion of a properly calculated dividend that is not work-related. That way, the dividend does not become just another labor cost that’s automatically embedded in the final prices of goods and services.

But the overriding point is that social credit solves the problems cited in the Roosevelt study, while also answering the urgent call to society that more and more automation is on its way.

Widespread automation could be the key to much more leisure and freedom—as long as we carefully construct a sufficient dividend to supplement people’s work incomes and strongly boost demand, even while human labor inevitably becomes less and less of a requirement to produce abundant goods, due to the efficiency of the machine.

Yes, we can take our noses off the grindstone and flourish, provided we pay careful attention to the snares and pitfalls and understand what we’re dealing with. I’d suggest reading some of the essays at www.socred.org among other sources, discuss the matter with associates and make your views known to policymakers.

Douglas once said that society could literally leave one civilization and enter another, a much better one, if we shake off outmoded financial shackles and carefully and bravely forge ahead. It’s time to get serious and do it. All the signs are there.

Mark Anderson is a veteran journalist who divides his time between Texas and Michigan. Email him at truthhound2@yahoo.com.

From The Progressive Populist, October 1, 2017

Populist.com