A $1,000 per month cash handout would grow the economy by $2.5 trillion, new study says

[yallerdawg]

Redistribution of wealth would do WHAT?

Source: CNBC, by Catherine Clifford

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).

The larger the universal basic income, the greater the benefit to the economy, according to the report.

A $1,000 cash handout to all adults would grow the economy by 12.56 percent after eight years, the study finds. Current Congressional Budget Office estimates put the GDP at $19.8 trillion. The cash handout would therefore increase the GDP by $2.48 trillion. (Vox first did this extrapolation in their coverage of the report, and Steinbaum confirmed the accuracy of the extrapolation to CNBC Make It by email.)

These estimates are based on a universal basic income paid for by increasing the federal deficit. As part of the study, the researchers also calculated the effect to the economy of paying for the cash handouts by increasing taxes. In that case, there would be no net benefit to the economy, the report finds.

"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. "In effect, it is giving to households with one hand what it is taking away with the other. There is no net effect."

Read it all at: https://www.cnbc.com/2017/08/31/1000-per-month-cash-handout-would-grow-the-economy-by-2-point-5-trillion.html

[Not Ruth]

1. The larger the universal basic income, the greater the benefit to the economy

I like the sound of that

[wasupaloopa]

2. Yes to hell with the deficit. Who cares if we go deeper

and deeper in the hole. Besides it ain't us who will have to pay it back!

Jam today, no jam tomorrow

[yallerdawg]

3. $2.5 trillion added to GDP generates the revenue!

The point is:

"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. "In effect, it is giving to households with one hand what it is taking away with the other. There is no net effect."

[tymorial]

4. Indeed.

And because the funds come from currency already in circulation the value of the dollar has not changed and as such no inflation. Very very interesting study.

[wasupaloopa]

10. Did you read the article?

There is no free lunch never was and never will be

There are some basic rules in economics.

This is nothing but wishful thinking.

You will cause inflation by flooding the market with money and establish a new floor just higher than the last one

[yallerdawg]

11. Damn. I usually just post links to articles. You want me to read them?

Notice how we actually recovered from the Great Depression? DEBT and GROWTH!!!

[Voltaire2]

6. we went trillions into debt for the stupid global war on terror and the economy was fine.

deficits aren't a problem when you have a fiat currency. We've established that there really isn't a problem with long term deficit spending, we've been doing it for 80 years or so.

Deficit hawks just want to justify taking away benefits while giving the rich tax cuts.

Deficits are paid back in bonds over time. T-bills are the safest investment on the planet.

[Voltaire2]

5. UBI plus Medicare for All would liberate people from wage slavery.

We would all be free to pursue our passions. It would transform society.

But we can't have nice things.

[yallerdawg]

7. "Slave to the wage" is at the core of our society.

From womb to tomb, they beat it into us - our only value is in "our work."

And a relentless need for "more."

[Hoyt]

8. I support some kind of universal income. It's going to be needed in future, but that study indicates

the $2.5 Trillion benefit is achieved by increasing the federal deficit over $150 BILLION a month (150 million adults X $1000). Sorry I don't buy that will work long-term, or even short-term.

From the OP:

"These estimates are based on a universal basic income paid for by increasing the federal deficit. As part of the study, the researchers also calculated the effect to the economy of paying for the cash handouts by increasing taxes. In that case, there would be no net benefit to the economy, the report finds.

"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. "In effect, it is giving to households with one hand what it is taking away with the other. There is no net effect."

[yallerdawg]

9. This particular model in support of UBI is designed as a Keynesian stimulus program...

to increase "aggregate demand: in addition to the increase in output, employment, labor force participation, prices, and wages all go up, as well. Since the policy is deficit financed, it increases the government’s liabilities, but because of the stimulative effect of the policy, that increase in debt is less than it would be if the policy did not increase aggregate demand."

The economic theory today is that lack of demand directly related to stagnant wages is holding our economy back. Stimulus will grow us out of the doldrums.

And as we all know, once you have something (UBI), it's very hard to take it away (ACA).

All we need is 50% plus 1 of American voters to support progressive taxation that will continue Universal Basic Income and the benefits associated with greater economic and personal freedom.

[Hoyt]

12. Sorry, I don't see a $2.5 Trillion stimulus in 8 years by "giving" folks $1.8 Trillion annually,

financed by increasing the National Debt.

Now, if you slashed military, and raised taxes on upper 50% or so, that might break us even -- every think considered -- for a year or two. But, then, both of those things would be a deterrent to stimulus (although it's time we do something drastic with military spending, it is a big part of our economy). I think Kenyes would laugh at the OP. I'm glad it was offered though, because we need to start thinking about how this is going to work down the road and stop trying to prop up coal mining, etc.

I do think we are going to have to do something as automation, etc., takes over. But the OP is more than a pipe-dream, more like mainlining Fentanyl.

[yallerdawg]

13. This is straight out of Keynesian economic theory - verbatim!

You want - need - Universal Basic Income to become a reality?

You won't get it taxing the more affluent and then cutting a check for everyone else! The Republican response is simple - and familiar, if you follow UBI (even at DU) - "We can't afford it and it will never pass!"

If we could have UBI without increasing taxes, stimulate and grow the economy, at least get back to full employment for anyone who wants a full time job, and do this with Republicans who are starting to consider this - we can begin to make the changes we need to ease into the inevitable economic historical evolution away from the excesses and failures of capitalism.

If we control what happens with the "profits" from production, then we pretty much "own" the means of production.