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This is a tacit admission that our form of capitalism has failed.
Here is a pretty good article on the subject from the economist of all places.

Income inequality is soaring, poverty is rising, the rich are getting richer, and they are doing it faster than they ever have before.

Billionaires have doubled their net worth in the past five years- that has never happened before. the billionaire class is worth trillions, and those trillions are purchasing land, water, and food stocks- things that everyone else has to purchase for survival. before long those trillions will exponentially generate trillions more.

The battle between capital and labor has been lost, and it was never a fair fight- labor has lost- badly.
When half of the country doesn't own any assets, stock, real estate, or savings, and they rely on government assistance for basic substance we need to question, well, everything.

The one piece of the puzzle, that most forget to add into the puzzle, is the role of FIAT money.  Money creation is no longer backed by gold, its backed by guns, courtesy of the military. When dollars are created by debt, and no one would dare to reject debt dollars, what is the value of that debt, or the interest to pay that debt? Supply side doesn't work, showering the top with cash doesn't trickle down fast enough, and when it does the purchasing power of those dollars is anemic.

In the near future the debt will be 20 trillion, but so what. As long as counter-parties take dollars, we will always be able to print more, to pay more.

Banks create loan and credit dollars out of thin air, and charge interest on those trillions of phantom dollars. The government pays 200 to 400 billion in interest (depending on what creditor is paid) to service the debt. But the poor and middle class have to fight and struggle to make ten bucks an hour. In a nation where there are tens and tens of trillions sloshing around, none of that is getting to those that need liquidity the most.

Yes, i know that the US government creates a Treasury out of thin air, and then they give it to the FED to create cash out of thin air- and the swap is done.

I know this, but the end result is the same, paper has been turned into cash, but it is a debt, and interest must be paid.

Soon the interest on the debt will be 1 trillion dollars per year, and labor will be made to suffer even more. Since there are so many dollars in existence, the inflation needs to be masked, and the primary way to mask it is to export our inflation, through trade. But the other way, the more nefarious way, is to stifle wages, to create poverty; that poverty makes dollars scarce, and thus valuable.  

With that said, something needs to be done. The system we have in place, it isn't working for half of the country. Since we have the ability to create money, it needs to be put to better use than enriching the rich, and starving the poor.

I am not arguing for the gold standard, or the dissolution of the FED, i am not even criticizing Ben Bernanke. I am stating the obvious, and trying to understand the system that is in place. The only way to get ahead, is to understand the rules of the game.

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Comment Preferences

  •  Just another "scare the Jabebus" out of the (0+ / 0-)

    "good people" story so that the Royalists can get More.

    Notice: This Comment © 2013 ROGNM UID 2547

    by ROGNM on Wed Nov 20, 2013 at 02:50:09 PM PST

  •  a national income would be a massive (7+ / 0-)

    stimulus for the corporations and could eliminate the need to pay unemployment, food stamps, welfare, social security, or pensions. The cost of all the tax loopholes, subsidies and direct payments that are currently in our tax law could equal the amount spent on a national income. Not that we would need taxes to pay for a national income as you point out, ours is a fiat currency.

    BTW - our government doesn't issue 'debt' to fund spending, it issues debt to provide a safe asset for investors and to set interest rates. The 'debt' that our 'creditors' buy is purchased with dollars that our government spent into the economy first.

    Loyalty to petrified opinion never yet broke a chain or freed a human soul in this world--and never will. Mark Twain

    by whoknu on Wed Nov 20, 2013 at 02:55:30 PM PST

  •  Switzerland voting on this! More reading. (9+ / 0-)

    Switzerland will soon vote on whether to start a universal basic income. I don't think the date of the vote has been set. NY Times article:

    Slate article:

    "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

    by HeyMikey on Wed Nov 20, 2013 at 03:10:01 PM PST

  •  Disincentive to Work? (From the Article) (13+ / 0-)

    The economy is a disincentive to work, it won't hire everybody as things are. It really hates hiring Blacks, which is why government is the #1 employer of Black men and #2 for Black women.

    A guaranteed income would solve a lot of problems among the bottom 30-40% of people but I think if there's going to be a middle and upper income population below the 1%, there will still need to be savings, unemployment programs and pensions to allow accidents or business cycles to not flush these people into the bottom class, and some kind of federal insurance backstop to whatever private insurance there, in case of a wide economic crash or serious recession.

    I've always thought the idea was excellent even if it's far from solving all the social safety net issues.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Wed Nov 20, 2013 at 03:14:17 PM PST

    •  One of my old-school conservative friends (19+ / 0-)

      (she's from the Barry Goldwater school, i.e. what you do in your own house, who you marry, and what you believe is no one's damn business- true conservative positions) is 100% behind the idea of a guaranteed minumum income.  Her idea is that it will A.) stimulate the economy and B.) get the laziest chaff out of the job market so that people who are hired actually want to be there, instead of just doing anything for the money, and will work with motivation, thus being a boon for companies, C.) allow those with artistic and unclassifiable talents (soap makers, artisan brewers, poets, etc.) and mom-and-pop-scale business owners to not worry about making a living and simply have time to hone their craft, thus benefitting their customers and society as a whole.  As an unrepentant bleeding-heart liberal, I wholeheartedly agree with all of her points.  Here's hoping this means that this is an idea that both progressives and the remaining old-school conservatives can agree on and push to make a reality.

      Odds and ends about life in Japan:

      by Hatrax on Wed Nov 20, 2013 at 03:29:23 PM PST

      [ Parent ]

    •  Seems to me like it would create a lot of (11+ / 0-)

      entrepreneurs.  If you know that no matter what you'll make some minimum that allows you to live, you're suddenly far more free to actually try 'doing what you love' - all the artistic, creative, innovative things that languish undone as people are too scared to do anything other than slog along in dead-end jobs that are often meaningless.

      •  Exactly!!! (4+ / 0-)

        Years ago, my wife and I liked to go for walks in a small town that had a weekly farmer's market.  There was a young woman there, maybe 25 or so at the time, who drove a 70s vintage Dodge van and sold her handmade soap.  After seeing her a few times, and liking what we smelled, we bought a couple of bars.  It was the best soap ever.  Not only did it do what it was supposed to (i.e., clean us), but there was something extra.  My wife and I both have dry, sensitive skin, and this soap worked wonders for us.  We continued to buy soap from her for over a year, and then one day she was gone.  We waited a few weeks for her to come back, and she didn't.  We asked around, found that she took care of her ill mother, and both had been evicted from their house (medical bills) and had hit the road, reportedly taking a waitressing job a few states over.  I still think about her.  This is just one example, but how nice would it be for her to be able to just continue to make soap, something she obviously loved and was good at?  How nice for us and all of her other customers?  
        This is just one small story that the average Rethuglican would dismiss with a laugh, but small stories like this one add up.  
        Another benefit would be that encouraging people to follow their dreams would free up a lot of "regular" jobs for the people that actually want them.  

        Odds and ends about life in Japan:

        by Hatrax on Wed Nov 20, 2013 at 11:13:54 PM PST

        [ Parent ]

  •  will the economists be footing the bill? (4+ / 0-)
  •  A guaranteed income won't guarantee a... (5+ / 0-) standard.

    Items will just inflate to continue to be out of reach of people who rely on the minimum income. We all get minimum income, but gas is $7 per gallon.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Wed Nov 20, 2013 at 03:55:41 PM PST

  •  As computers and robots get better and cheaper (14+ / 0-)

    this is going to HAVE to happen. And it's closer in some sectors than you think. We're not far from robots driving on our roads. When that happens every truck, bus, and cab driver will be unemployed. Automation will take the place of many service jobs in restaurants to grocery stores. Right now we could put RFID chips on every bit of food in a store and walk thru the scanner to pay your bill. Maids and janitors will be replaced by machines. More and more people will be not just unemployed but unemployable. Eventually we'll get to a point that the notion that a human being's value is tied to the labor they can provide will be destroyed and capitalism will finally die the death it so richly deserves.

    Spite is the ranch dressing Republicans slather on their salad of racism

    by ontheleftcoast on Wed Nov 20, 2013 at 03:56:39 PM PST

    •  The cynic in me says (6+ / 0-)

      that when the notion that a human being's value is tied to the labor they can provide is destroyed, it's not going to suddenly make us into a Star Trek society where everyone's intrinsic worth is recognized.  I sadly think that when their value is gone, then their value will be gone- i.e. the upper crust will truly have no use for them and see them the same way they see food scraps or a broken machine.  When that happens, and if the rich are still in control as they are now, we are much more likely to see proposals that such people be culled like unwanted shelter animals (in this brave new world, we can't afford to feed everybody) than have a sudden revelation that all humans have intrinsic worth.

      Odds and ends about life in Japan:

      by Hatrax on Wed Nov 20, 2013 at 04:32:48 PM PST

      [ Parent ]

  •  Something has to give because higher (4+ / 0-)

    productivity and lagging demand means that there's no need for more people to do what we're used to calling work. This trend isn't going to reverse.

    I found this statement a bit jarring:

    Money creation is no longer backed by gold, its backed by guns, courtesy of the military.
    I mean it's true in a figurative sense which is a staple of leftist thought especially in Europe and that explains why the US and its NATO partners need the endless war in Afghanistan that they're breaking to the public little by little.

    But the dollar isn't literally backed by guns.  In economic terms, each dollar is backed by every other dollar. It's just a medium of exchange. What backs the currency isn't the problem.  I think Americans say this only because they're not allowed to name the real problem. There's a taboo against it.

    It's the system in which the dollar exists that necessitates war. It was true 100 years ago even when it was backed by gold.  The same predatory system based on haves and have-nots drove the world into war that began in 1914.  Jean Jaurès, the French Social Democrat, spelled it all out and was assassinated in 1914.  But his thinking survives.  A metro station and streets everywhere in France are named for him.

    When you say that war props up money you are spreading the word of Jaurès whether you know it or not.  It was true then and it's true now.  

    This idea of a basic income is part of a larger context that turns neo-liberalism upside down. Instead of basing an economy on debt and cheap goods made abroad by cheap labor, the economy is based on a better standard of living with food and goods produced in a way that may be slower but respects the Earth and labor.  It's a long-term sustainable system based on value and inclusion.  

    There is no existence without doubt.

    by Mark Lippman on Wed Nov 20, 2013 at 04:14:15 PM PST

  •  Richard Nixon suggested a guaranteed income (8+ / 0-)

    when he was first elected. I think it passed the House but got stuck in the Senate.
    Anyway, it's not a new idea.
    That said, currency is worthless unless spent. The only reason it seems to be worth something is because Congress is rationing the supply and Wall Street is hoarding to minimize the risk of Congress cutting off the supply entirely. Which is what the sequester is designed to do.
    Why would Congress something that is, theoretically, in infinite supply? Because they have fallen into the habit of using the dollar as a tool to subordinate recalcitrant citizens and reward their friends.
    Rather than taking bribes, Congress has hit on deprivation as a strategy to promote themselves. Sometimes they just threaten to deprive, as when they pronounce that people's pensions have to be reduced. Other times they actually effect deprivation as when they reduce or remove the food supplements.
    Imagine if the number of inches around a person's waist were used to determine whether or not they could eat. That's how access to currency is being deployed. What should be a simple measure of relative value is being used as a tool to deprive people of food, shelter and medical care.
    In a culture where abuse and discipline are the norm, deprivation is hardly surprising.

  •  You do realize that if the government (0+ / 0-)

    went back to "US Treasury Notes," it would have all the advantages of "Federal Reserve Notes," with no debt what so ever.  Watch "Secrets Of Oz".  The Greenback Party advocated it.

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