Unnecessary?

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?

 

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21 comments on “Unnecessary?

  1. Laurie Graves says:

    Tongue in cheek aside, these are important questions!

    Liked by 1 person

    • Bill says:

      Wouldn’t it be great to be able to have some kind of crystal ball to show us the future? If I could look into one I don’t know exactly what I’d see, but I’m sure I’d find it interesting. The odds are good it won’t look much like what we’re expecting.

      Liked by 1 person

      • Laurie Graves says:

        Yes, indeed! I just hope I live long enough to get a sense that we humans are at least heading in the right direction.

        Like

  2. Yes very good Questions Bill, ” What kind of new world are we steaming towards?” One I hope that changes it’s values that include People as more important that Profits..
    We still have a lot of shovelling to do yet before we stoke the boiler in our favour.. But my spade keeps digging deeper into the workings of our world..

    Thank you for this excellent post .. Sue

    Like

    • Bill says:

      Thanks Sue. I worry about how we can devalue labor and meaningful human work without devaluing humanity itself. But I prefer to believe our best days are yet to come. For sure, we’ll need a lot of people doing good shoveling. 🙂

      Liked by 1 person

      • My spade is always at the ready Bill. 🙂 and yes, I have faith that despite all that is Now, I have Great Hope for our future Now, when there are individuals such as your good self about spreading that which needs to be ‘planted’ 🙂

        Liked by 1 person

  3. avwalters says:

    Oh, don’t get me started…

    Like

  4. BeeHappee says:

    Magic Money Tree.. . A good one. We lived almost without money once, in Soviet Union, where everyone was provided just enough to meet the very basic needs. Still, if you were a sick old grandma, you had to bring all your chickens and eggs (or gold from under your pillow) to get treatment from a doctor in a “free” medical care.

    Like

  5. nebraskadave says:

    Bill, interesting concept about Magic Money Tree. I’m hoping it was a satire about the fiscal practices of today government. What will the work force look like in 20 years? In 30 years? Robotics have taken over much of the labor force of manufacturing. Perhaps in 20 years a Bob the Builder robot will be building houses. Robotics is a scary thing for me. I do love the thought of robots doing the drudgery work around the house but Jetson living would drive me up a wall. At my age I don’t think I’ll live long enough to see personal robots that are smarter than me take over the world. “Century Man” was one of my favorite robot movies. It’s right up there with “I Robot”. I’ve talked about agriculture robots before and I can see that happening in the near future. Today the massive tractors are GPS guided and only need to be turned around at the end of mile long rows. The day is fast coming when unmanned tractors will be sent out to do field work and monitored from a remote location. Companies will own the tractors and farmers will lease field time. Since the seasons start sooner in the South that’s where the tractors will start there migration north. When the fields are all planted they will be transported South to begin the harvest migration.

    Google cars have been certified to drive themselves on the roads of California. How long do you think it will be until certified drive yourself trucks will be on the roads. They already have radar that can tag the vehicle in front and follow it’s every move. It could be the beginning of truck trains on the road. One hundred mile competitions have developed vehicles that can travel that far without any intervention over all types of terrains.

    Technology will continue to advance at an incredible rate. Who would have thought even 10 years ago that we would be able to buy a “Dick Tracy” watch that would do more than even the one he used in the comics? It’s a love/hate relationship for me. I love the possibilities but hate that a machine could become way smarter than me.

    Have a great MMT day. 🙂

    Like

    • smcasson says:

      I thought that driverless cars could operate in rural roads in Nevada? Not Calif? But that’s what I heard a few months ago, and I deliberately don’t consume the news. Anyway. Driverless trucks are operating as well. But those won’t maneuver themselves in a yard and dock themselves. So a trucker will have to ride along…
      My coworkers keep teasing me that driverless cars are coming… Yeah. Right. Just watch me buy a driverless car. I don’t even buy cars over $5,000.
      Anyway. I’m an engineer and I love the problem solving aspects of these tech innovations, but I am a curmudgeon when it comes to using them.

      Like

    • Bill says:

      Believe it or not, it’s not satire. MMT is a recognized, legitimate monetary theory now, being advocated by reputable economists. But perhaps we shouldn’t be surprised in this day and age when our money is mere paper.

      Recently I listened to a podcast about robotics and automation and the conclusion was that we are on the cusp of some revolutionary changes (self-driving vehicles being one). The agricultural field labor that still remains will be taken over by robots/machines. Fast-food restaurants will be automated. And it’s not limited to low-skill jobs. There is a robot/machine that replaces anesthesiologists for example. But as more and more human jobs are eliminated by technology it raises two big questions in my mind: 1) without work, how will humans get the money to buy the stuff the robots are making and selling and 2) without jobs, what are people going to do with their time? Maybe the future will include the bulk of humanity doing nothing meaningful, living off their GMI, while the rest continue doing the technological innovation and gathering up wealth. That sounds kind of bleak, so let’s hope not. But whatever happens, it does seem that traditional work is being squeezed out (and I didn’t even mention the effect of globalization and the outsourcing of work). I have plenty more thoughts about that, but I’ll save them for another day.

      By the way, it was over 70 here today. It’s been a wildly warm fall. The gardens think it’s spring!

      Like

  6. EllaDee says:

    It’s an interesting direction the world appears to be heading in. The stuff of dreams… or nightmares. I worry about the divide between the haves and have-nots but wonder how you quantify have vs have nots. Who will be better off, those to subscribe to every shiny new development or those who know and value the old ways.

    Like

    • Bill says:

      I wonder about those things too. Maybe we’ll divide into 3 groups: those who want to do nothing but watch TV, eat junk food and live off their GMI, those who want to stay in the rat race in order to earn as much money and accumulate as much stuff and prestige as possible, and those who choose to live simply and naturally, returning to our traditional work of farming and craftsmanship.

      Liked by 1 person

  7. Deb Weyrich-Cody says:

    Unrealistic.
    People NEED to be productive and Making is necessary for a positive state of mind.
    Being given something for nothing is not fulfilling.
    Duh(mb) ideas.
    Bread & Circuses, anyone?
    Soylent Green, perhaps…

    Liked by 1 person

    • Bill says:

      I think having good meaningful work is part of what it means to be human. We are incomplete without it. A state of affairs where no work is necessary doesn’t sound attractive to me.

      Like

  8. RonC says:

    If the Government spending could be limited to 5% of GNP, then they could go ahead and print all the money to fund it and not have serious inflation. At least that is Martin Armstrong’s proposal. You would still have to fund the state and local governments with taxes.

    As for eliminating work….The devil tempts all men, but idle men tempt the devil. Even before sin entered the world, there was work to do. That has not been changed…In fact more work was piled on for our good.

    Driverless cars are all over the place now that cell phones are so common.

    Like

    • Bill says:

      That makes sense. But it’s hard to imagine government spending being reduced that much (however nice that would be). Good point about state and local governments. Without the ability to print money, they’d still need tax revenue. So the old saying about the certainty of death and taxes holds true even in a world with MMT.

      Like

  9. Leigh says:

    Well, it seems to me we’re steaming toward a strange new world that would have no need of a citizenry. In fact, people would no longer be an asset to such a world, just a liability.

    Like

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