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Negative Income Tax

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Helsworth
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Post: #51
RE: Negative Income Tax

I don't see it as paternalism when the majority of the population agrees to it, and it's usually more than just 51% - especially concerning the environment and moving away from coal and oil.
There will ALWAYS be times of need. Such as droughts, floods, wildfires, earthquakes, invasion etc. And that's why government ought to take measures and prepare society for such things - for instance, making construction regulations which PRESCRIBE that buildings be built to meet a certain minimum standard of safety. You know what private or gov agents do in lack of such codes/laws? They cut corners and the fucking buildings collapse on people - on workers and bystanders. Just check the news on this in developing countries and third world countries. You're telling me that what Castro did of making Saturdays non-free days in order to rebuild the city after the fighting was "evil" because it prescribed something? Ex: A mandatory law for people to sort their garbage, oh, no, this will create room for anti-freedom legislation in the future & for commies and nazis to come into power. People! Your freedoms are under attack! Yes, most of the times laws shouldn't prescribe, but that doesn't mean that there is no case in which laws should never prescribe anything.
You have to look at things in context. There is no absolute law or principle to be applied indiscriminately of context - if you do that, that's the definition of ideological zealotry. Since you'll "never" accept a law which prescribes things, (whatever they may be), you catalog yourself as a zealot. And that's why online debates about personal choice of ethics is a waste of time.


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This post was last modified: 24.07.2015 20:30 by Helsworth.

24.07.2015 13:28
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Oxinow
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Post: #52
RE: Negative Income Tax

First -thx for the links provided in your first reply to me, i forgot to refer to it. Good to see that there are people remaining speaking out that things. In Germany there are almost no more voices against the neoliberal or monetarism politics, neither in politics itself, nor in media. It is one big sauce of mainstream.
And yes, race to the bottom is the inevitable result of that "politics", if other countries want to stand against the starter.

Helsworth Wrote:
A couple of observations and personal points.

1- NIT or BI should not abolish the minimum wage.
Minimum Wages 101
bilbo.economicoutlook.net/blog/?p=1010

That is a point where i did not make a decision yet.
As i see from your previous posts you support what you called "Job Income Grant" and the idea or aim of "full employment".
I am not sure if that is an overcome view, which might result from a missing distinction between "work" and "income work". Usually this is set equal in our thinking. Work is only what generates income. But imo that is not true. One can have a "working place" but actually does no "meaningful work" but it is accepted as "work" because it generates income. With the imo false inverse conclusion that anything that does not generate income would be no work. Which is a reason that most "voluntary" work or "morally forced" work (e.g. caring about old family members) is not honored or usually does not even appear in economic thinking or calcuilation (no income = no work = no economic value = not worth to implement).
I think, according to that, there should be also a distinction between "income places" and "work places". Any work place can be an income place as well, but not every income place a work place.
That said, an UBI could enable such yet not honored but necessary and value work to become income work as well, even with low wages - if there is no minimum wage.
Additionally if a BI is an UBI it will prevent wages dropping too low, because - like you said - it makes wage bargaining on same eye height between employer and employed. But this is only the case when it is an UBI at or above living costs/existance minimum. And in that case wages might adjust ok even without minimum wage.

Quote:
2- Makes no sense to tax the BIG of people, which the state pays to them. All the money that goes to paying taxes & buying government debt comes from government spending. While BIG can numb the automatic stabilizers a little, a JG program correlated with adequate macro-policy (high enough deficits) to maximize private sector employment can ensure full employment, regardless of cycle.

I agree to the first part about taxation of a BIG, doesn't make sense.
But i doubt the idea of full employment, and to be honest: i don't understand the aim of that. People always have work in the meaning of valuable work like i described above, people always search for what is a meaningful work for them, nobody plans ones life with doing nothing or no meaning. If so, then this is a deformation result of the current system that surpresses all initiatives that don't result in money income and of a minimum height instantly.

Setting work equal to income is a mistake in my opinion.

And disrespects all the not paid work in society, which is not only standard voluntary work in clubs or social projects, but also e.g. the "common" work of growing up and educate children or household work.

Quote:
3- The reasons in Ars-Regendi for why BI can screw your state is not about decreasing wages. In my states in which I applied BI, net income of people grew.

Possible. But in reform "Basic Income II" (i was wrong with basic income I) there is explicitely written that wages would be reduced by the amount of BI (in german reform text, maybe different in english).

Quote:
BI in real life would actually enhance labor's bargaining power.

Only if it is an UBI!

Quote:
4- I see no purpose for supporting or tolerating firms whose productivity is so low that they can't afford to pay the minimum wage. Others might disagree, but I'm against 'race to the bottom' approach to economic 'success'.

I agree. Either the business and its product is needed or it is not. If not, there is no reason to artificially keep that business alive.

For me an UBI (not only a BI or BIG) adds another component to the wage, which changes the common term "wage" to a term like "personal earnings"or "personal gain". Which also adds a new "immaterial value" to the wage which is part of the new wage bargaining process. That again means a new grade of freedom added.
The new wage is (money/h + meaning) and with that the yet common income = wage money becomes

Personal Gain = (JobMoney + JobMeaning) + UBI

This can never be zero, and bargaining can be done as a balance between money and personal meaning of the job, respectively the "new wage" is a pair of balances. One can exchange JobMoney vs meaning an employer has to offer instead, if he cannot pay higher money wage - - keeping the same personal gain.

To avoid a misunderstanding: it does not matter here, if there is no measurable definition of "personal meaning" or if "meaning" is only an emotional term and an intangible value. In any case the sum of "personal meanings" increases, and "meaning" as a new value or component of National Income therefore rises National Income as well in any case. If minimum wage exists or not. But the absence of a minimum wage then would enable more opportunities to rise that new immaterial income. And what counts in the end is how satisfied people are, and not the amount of available money allone. That's the mistake today, that economics predominantly equals nation happiness with GNP and people happiness with money/income and consume.

Interesting approach: The idea of Bhutan's "Gross National Happyness", where GNP is only one index of others for the overall calculation of the efficiency or size of the national economy.

This post was last modified: 24.07.2015 20:31 by Oxinow.

24.07.2015 20:14
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Helsworth
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Post: #53
RE: Negative Income Tax

My goal for full employment is not a coercive one. I'm not concerned about the willfully unemployed. I'm concerned about those people who are in a state of permanent and involuntary unemployment. They are the people sacrificed by the neoliberal/monetarist establishment to the NAIRU god, in order to appease him.
The NAIRU is deliberate establishment policy, it's called the unemployed buffer stock of labor. The academic argumentation for it is based on data fudge. The alternative MMT solution to that is the voluntary Job Guarantee, an employed buffer stock of labor - which enhances the automatic stabilizers, works as a better price anchor, and does away with many of the social and psychological ills associated with permanent and involuntary unemployment.
Have a look at Fullwiler's slides on Simulating the Logic, costs, and effects of the Job Guaranee. https://prezi.com/gpdff4g-kuqz/simulatin...ntee-2015/
Note, I'm not in favor of mandatory (right wing) make-work schemes.

PS: It's great to see a passionate heterodox German bloke on Ars-Regendi engaging in discussion on such matters. And also, your English is really really top notch! Daumenhoch


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This post was last modified: 24.07.2015 21:14 by Helsworth.

24.07.2015 20:29
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Oxinow
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Post: #54
RE: Negative Income Tax

Helsworth Wrote:
My goal for full employment is not a coercive one. I'm not concerned about the willfully unemployed. I'm concerned about those people who are in a state of permanent and involuntary unemployment. They are the people sacrificed by the neoliberal/monetarist establishment to the NAIRU god, in order to appease him.
The NAIRU is deliberate establishment policy, it's called the unemployed buffer stock of labor. The academic argumentation for it is based on data fudge. The alternative MMT solution to that is the voluntary Job Guarantee, an employed buffer stock of labor - which enhances the automatic stabilizers, works as a better price anchor, and does away with many of the social and psychological ills associated with permanent and involuntary unemployment.
Have a look at Fullwiler's slides on Simulating the Logic, costs, and effects of the Job Guaranee. https://prezi.com/gpdff4g-kuqz/simulatin...ntee-2015/
Note, I'm not in favor of mandatory (right wing) make-work schemes.


But isn't that a sort of circle conclusion when seen in an environment with an existing UBI?
UBI gives people the freedom to chose or create work on their own.
Todays psychological impacts and illness connected to unemployment are a material result of no income and an immaterial result of todays evaluation of the term "work" as "human value" - and that additionally under the confusion of work = income. Which results in the capitalistic image of a human as "human value = income". No income = worthless human --> social exclusion.
It is the social exclusion that makes the people ill.

But today they themselves are victims of that perverted human value thinking, where they fix their self esteem to the amount of money they earn.

UBI creates space to find new criterias for self definition. And it probably removes social exclusion much better than just having an income place, that not even needs to be meaningful for the one.
It are not only the unemployed today who become ill, it are also more and more the employed ones who develop psychologic problems under the pressure of lower wages, existential fears and the - probably more subconcious - insight that their personal value is increasingly reduced to an economic evaluable number in an environement as well increasingly lacking democratic influences and opportunities for personal impact to ones world and personal meaning.


Quote:
PS: It's great to see a passionate heterodox German bloke on Ars-Regendi engaging in discussion on such matters. And also, your English is really really top notch! Daumenhoch


Thx for your courtesy about my english Wink
One of my eye-opening developments was the discovery of Wolfgang Stützel's Saldenmechanik (Balances Mechanics, maybe you know about), where i also finally found my "own amateur logic" adressed and confirmed - of which i always thought i must be wrong, because it is too simple and therefore couldn't picture the complex economic issues, for which armies of high academics developed huge term buildings.
I now find that Balances Mechanics roots in many of your posts and links.

https://en.wikipedia.org/wiki/Balances_Mechanics

I am not an economist, but interested in the stuff, because i recognized what a direct/immediate material and psychologic impact the combination of ethics with economic models and philosophies or ideologies has on the daily lifes of billions of people.
Because of the overcomplex language developed by economists most people think all that is too abstract and some sort of "force majeure" they have to bow down to and accept. But it is a game made from rules made by humans. Rules made by humans can be changed by humans.

29.07.2015 21:33
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Helsworth
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Post: #55
RE: Negative Income Tax

I agree with your conclusion; it really is just smoke and mirrors to trick people into believe that it's all too complicated for their little buys minds to understand - and only the magicians (the academics) know how to interpret such data.
I subscribe to the accounting approach of Wynne Godley.
https://en.wikipedia.org/wiki/Sectoral_balances

I see that Stützel's approach is the same. Guess it's like Newton & Leibniz on calculus. Happy


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29.07.2015 23:40
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Oxinow
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Post: #56
RE: Negative Income Tax

Helsworth Wrote:
I agree with your conclusion; it really is just smoke and mirrors to trick people into believe that it's all too complicated for their little buys minds to understand - and only the magicians (the academics) know how to interpret such data.
I subscribe to the accounting approach of Wynne Godley.
https://en.wikipedia.org/wiki/Sectoral_balances

I see that Stützel's approach is the same. Guess it's like Newton & Leibniz on calculus. Happy


I met on Sectoral Balances a while ago already and instantly thought of the Balances Mechanics. Wondering where the differences are, i only see that Sectoral Balances are more specific (the three sectors), and Balances mechanics describes expenditures and revenues more general and with empahsis on economic paradoxes.
Balances Mechanics was round 1970s, when did Godly the Sectoral Balances?

Hihi, i used this opportunity to translate the english article to German WP. And as usual in German WP they instantly deleted parts in less than one minute after i had the fresh translated article published. Now someone even wants to put it to the article remove page, because the article would be stuff of first semestre economics (what a reasoning, lol, let's remove Ohm's Law!), (though he also made the suggestion to insert it as subsection to Balances Mechanics).
I also added in some articles links to Sectoral Balances and Balances Mechanics in the "See also" sections.
The Balances Mechanics article translation from the German article was done by me - i hope it does not suck too much. Same with the article about Wofgang Stützel and the one "paradox of competition".
Atm i am at a translation of MMT to German WP. Maybe Chartalism will follow - if that watchdogs at german WP won't piss me away already before.
Wink

01.08.2015 01:45
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Helsworth
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Post: #57
RE: Negative Income Tax

Oxinow Wrote:

Helsworth Wrote:
I agree with your conclusion; it really is just smoke and mirrors to trick people into believe that it's all too complicated for their little buys minds to understand - and only the magicians (the academics) know how to interpret such data.
I subscribe to the accounting approach of Wynne Godley.
https://en.wikipedia.org/wiki/Sectoral_balances

I see that Stützel's approach is the same. Guess it's like Newton & Leibniz on calculus. Happy


I met on Sectoral Balances a while ago already and instantly thought of the Balances Mechanics. Wondering where the differences are, i only see that Sectoral Balances are more specific (the three sectors), and Balances mechanics describes expenditures and revenues more general and with emphahsis on economic paradoxes.
Balances Mechanics was round 1970s, when did Godly the Sectoral Balances?

Hihi, i used this opportunity to translate the english article to German WP. And as usual in German WP they instantly deleted parts in less than one minute after i had the fresh translated article published. Now someone even wants to put it to the article remove page, because the article would be stuff of first semestre economics (what a reasoning, lol, let's remove Ohm's Law!), (though he also made the suggestion to insert it as subsection to Balances Mechanics).
I also added in some articles links to Sectoral Balances and Balances Mechanics in the "See also" sections.
The Balances Mechanics article translation from the German article was done by me - i hope it does not suck too much. Same with the article about Wofgang Stützel and the one "paradox of competition".
Atm i am at a translation of MMT to German WP. Maybe Chartalism will follow - if that watchdogs at german WP won't piss me away already before.
Wink

Heh, WP policies & policemen, what can you do...
I know that Abba Lerner's Functional-Finance was earlier than that (in the 1940s); and Keynes himself drew inspiration from him in his works.
https://en.wikipedia.org/wiki/Functional_finance
I don't know when Godly actually put forward the sectoral balances. I'll ask Steve Keen on twitter about this.


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01.08.2015 10:54
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