mhaze,
However much automation we get, the Federal government will always have the means to create full employment. So please stop considering UBI as an alternative to proper employment!

And we certainly don't need negative tax - that would be very expensive, unfair and probably easy to defraud.

Hey Aiden,
Economists decree that we should never have full employment. Do you know why?
It's because capitalism requires a pool of 5% unemployed to prevent wage growth.

Giving everyone a free handout won't solve societies problems.
I believe it will create even bigger problems.

The answer I believe, is to:

Make use of that 5% unemployment that Capitalism requires by creating a base level socialist job system
(The job you have when you don't have a job)
and base the system on a 'handup' rather than a 'handout'.

Double dole for full time work doing things to help the government save money.

Check my recent post here:
http://forum.onlineopinion.com.au/thread.asp?article=20692&page=0#364474

I look at the bigger picture of what we've built, and this '(Optional) Base-level socialist jobs system' looks to me like the missing piece.

To SteeleRedux.

Economic stimulation is not an argument I see as valid. Think of it like this. If you pick a man's pocket and give some of the money back, that's not going to encourage him to spend more of his money. If anything it will cause him to spend less of it because he has less of it to spend on anything but bills.

The issue is still that the money has to come from somewhere. Where is it taxed from to house a program of $1000 a month to everyone. If it's income tax then that does more harm then good (go back to picking a man's pocket, because in that case you have to pick more then a thousand out per working person in order to pay a thousand back for both those working and those unemployed).

No, economic stimulation is just as much bunk as the statement from an economists view of holding a 5% unemployment rate is bunk. The reason for the argument for UBI is to help those who lose their jobs, have a crap amount of income, or have been unemployed for a while. (Such as being on disability and needing assistance). If the UBI causes more harm by either taxing the income to make it work, (making it harder to pay for anything and causing more poor among those not super rich), or by killing one industry or another that has to shoulder the burden under tax weight; then the UBI is a bad idea.

I'm not saying there isn't a need for government assistance. Medicare, social security, and disability assistance exist for a reason. But I know that UBI is a bad idea and not the solution.

If you look at the real inherent FLAW of capitalism:
It's because 2 people go for a job, but only one person can have the job
It's really that simple.

- Someone Has To Lose And The Loser Gets Nothing -

The loser has no opportunity to improve his or her lot.
They're denied a place of value and worth within the community.

The loser of Capitalism therefore, is the person who did not get the job.

[It should be noted here however that one of the great benefits that underlies capitalism, is that it chooses the best person for the job based on merit, and this should never be lost]

So the question is how do we 'FIX' that FLAW of 'The Loser of Capitalism' - 'The person who did not get the job'?

You create a foolproof system.

You create an optional base level socialist jobs system that gives 'The loser of capitalism - the one who did not get the job' a second chance.

There's still a job for them, but it's the 'job you have when you don't have a job'.
This way people wont lose all they've worked hard for during periods of unplanned unemployment, family breakdowns, alcohol and drugs, etc etc.
They have an opportunity to stay busy and get twice as much money as doing nothing pays.

All it does is create an opportunity for people to be able to help themselves, and I think the amount it would actually save in all the services that go into helping people when things aren't going well in their lives would be seriously underestimated.
I think it would actually save the country billions.

And you don't have to waste as much money managing the unemployed if they're showing to be actively helping themselves.

" 2 people go for a job, but only one person can have the job
It's really that simple."

Yeah that's why we have 50% unemployment. Struth! how to totally misunderstand the real world in one easy lesson.

The bloke who missed the job goes down the road and gets another.

The fact is that capitalism is the great job creation system the world has ever seen.

The issue is that in the potential new AI dominated world, the job creating potential of capitalism may not work as well as it has over the past 3 centuries. So it MAY need some tweeking.

SR's favouring of UBI is one way of doing it. Negative income tax is another - I believe a more flexible system. The government merrily creating make-believe jobs isn't a solution. It the road to universal poverty.

Aidan,

I now you have these fantasies where governments the world over can spend 'til the cows come home, but I don't buy it. The revolution in AI potentially destroys the working class. Governments spending on all manner of job creation, thereby creating debt and inflation is a recipe to destroy the middle class. I'd prefer a somewhat better system. The iea that no matter what the future problem is, the government will make it all better is rather unlikely given the history of the last Keynesian century.

Armchair,
Capitalism does NOT require a pool of 5% unemployed to prevent wage growth. If preventing wage growth is the objective (and there's good reasons to think it shouldn't be, as wage growth has been very subdued lately) then 2.5% in all regions is a much better target than an average of 5% across the board. And when you have as much underemployment as we do now, neither of those is necessary.

You're certainly not the first to suggest the government create a sort of reserve employment pool. Professor Bill Mitchell has developed a far more detailed plan. Unlike yours, it involves the government creating proper jobs (minimum wage instead of the peanuts you're suggesting). You can find his blog posts about it at http://bilbo.economicoutlook.net/blog/?cat=23

Personally I'd like to see a slightly different approach: those paid to save the government money should be paid in proportion to the money they save the government!

__________________________________________________________________________________

Not_Now.Soon,
Economic stimulus is when extra money is added to the economy; if the government just increases the tax rate, it is NOT economic stimulus. There has to be either a fiscal stimulus (where the government borrows more) or a monetary stimulus (where the government reduces interest rates to induce the private sector to borrow more). Or there could be some sort of hybrid like QE, but that's not so effective.

Remember, when the government borrows money:
You are not obligated to pay it back
Your children are not obligated to pay it back
Your grandchildren are not obligated to pay it back
Even the people a hundred generations in the future are not required to pay it back.

Governments may sometimes decide to run surpluses in order to keep interest rates low, but that's irrelevant to the amount of debt they already have.