Several years ago I published a post arguing that taxes are unnecessary. At the time the federal government was collecting about $1 trillion per year in individual income tax, while running a $2 trillion deficit. The deficit was funded by borrowing and creation of “new” money. So if the government can print up 2 trillion bucks to meet the shortfall, why not just print up another trillion and let us keep all of our income, I asked.
The post was tongue in cheek, of course, but it generated some good discussion.
More recently I posted about the increasing interest in a Guaranteed Minimum Income (GMI) that would replace much of our current social safety net. Under this type of scheme every citizen would receive a guaranteed income from the government every year, in an amount sufficient to make sure they have enough money to meet all basic needs, thus presumably eliminating the need for unemployment benefits, welfare, food stamps, etc. Anyone unsatisfied with subsidence wages could go out and try to earn more, but no one would have to have a job to assure survival.
I have also posted on occasion about robotics and automation eliminating much of our traditional employment and leaving the question of what people of the future will do to earn a living. Even with relatively low unemployment, our labor force participation rate just hit a 38 year low. Only 62.4% of Americans over age 16 are employed or seeking employment. That’s not entirely (or even primarily) due to robotics and automation. But with technology rapidly rendering human labor unnecessary, that percentage will surely continue to fall.
I used to be very interested in monetary policy, but I haven’t paid much attention to it over the past five or six years. So I was quite surprised to learn recently of something called “Modern Monetary Policy”(or MMT) which is supposedly all the rage these days. Under MMT (which critics quip stands for “Magic Money Tree”) governments would just print up whatever amount of money they need, without regard to tax revenue. Under MMT taxes are irrelevant and unnecessary, except as a means to keep a preferred currency alive. So it seems that maybe my old post from 6 years ago wasn’t so silly after all. Maybe taxes really are unnecessary after all.
But it all leaves me wondering. If…
With MMT no taxes are necessary;
With GMI no job is necessary; and
With robotics no work is necessary,
What kind of strange new world are we steaming toward?