[speakeasy]

http://bigthink.com/praxis/should-the-go...sic-income

They get to vote on this measure next week. If it passes, it will mean every Swiss citizen and legal resident will get $2800 a month as a basic income. What's interesting is that both liberals and libertarians have their own reasons for supporting it. It would be a cold day in hell before something like this became law in the USA, but the idea behind it is interesting and if Switzerland adopts this it'll be fascinating to see how it plays out.

One theory is that it may actually put upward pressure on wages as people will have more bargaining power for compensation if they don't have to worry about basic survival. You would also have an easier time switching between careers if you didn't have to worry about how you'd provide for yourself in the meantime.

[Sawyer]

I don't know. Getting free shit long term is seldom good for people.

[Vacancier Permanent]

2800 in Switzerland is the equivalent of about 1k in the US that is not much in light of the high cost of living there.

[bojangles]

Pah, you can't even live on that in Switzerland.

[Tytalus]

Interesting. If we all got a non livable bonus per month from the government, what would happen? Most would spend it and then cause inflation.

[Sp5]

(11-20-2013 06:16 PM)bojangles Wrote:  

Pah, you can't even live on that in Switzerland.

Yeah, but what would stop you from collecting and spending most of your time in Spain?

[InternationPlayboy]

Pretty decent idea given that you wouldn't get by with the wage so people would still have to get jobs. But that means everyone still gets the $2800 even if they are working? As of now when you're on unemployment in Switzerland you're collecting around $3000 anyways.

[Handsome Creepy Eel]

Fascinating idea, even if I'd never dare try this out if I were running a country. Let's wait and see.

[InternationPlayboy]

Switzerland had it's shut pretty well together when it comes to running a country. I'm sure it will work out. They've made great decisions the last 100 years. They stayed out of WWII and just say back and collected gold. The decided not to join the EU and keep their own curency. I personally don't think it would be the place I'd want to live, but hats off to them for knowing how to run shit. If I were the type of guy who just wanted a family and to live a comfortable, somewhat boring lifestyle (in my eyes, probably ideal for many), Switzerland would probably be my bet.

[Samseau]

(11-21-2013 12:21 AM)Tytalus Wrote:  

Interesting. If we all got a non livable bonus per month from the government, what would happen? Most would spend it and then cause inflation.

It's an alternative to inflation, which is why some Austrians (such as myself) think it's a worthy idea to try out with a closed population.

Normally, money is continuously collected in the hands of a few, so the only way it spreads to the poor is if the they labor for it or manage to invent something with high demand. Over time capital concentrates until there is either war or depression.

Depression or war is the guaranteed outcome because if the poor people cannot afford to buy the products of the rich, then there becomes less demand for goods and services which kills jobs and so forth.

The idea is instead of letting wealth just sit in the hands of the winners, money is recycled back down to the poor so they can spend it and continue to generate demand.

Having a bonus per month also must be done as an alternative to regular welfare, as to avoid bankrupting the country, and instead give total freedom for citizens to spend it as they please.

The problem of course, is if illegal immigrants sneak in for the benefits, or if enough Swiss citizens themselves decide to become freeloaders. Say, for example, if a Swiss citizen decided to go live in SEA on his $2800 a month.

[Caligula]

The only reason that the open referendum system works so well in Switzerland is that it is generally quite a conservative population. That's the reason this will most likely not pass.

[la_mode]

They control so much of the world's money this might be easy for them.

[jaakkeli]

This would be a great move *if* it could be done the way the libertarianish advocates do eg. completely dismantle all other forms of welfare. It would actually cut costs since you could get rid of the army of social workers and bureaucrats that now decide on money hand outs and it would be more "morally" satisfying (right now the biggest payments go to the most shameless leeches who have no problems lying and cheating).

It will never happen that way though. In a lot of European countries the government has gotten bloated enough that most people are public employees. All the people slacking off at nonsensical government fake jobs won't vote to have them taken away.

[bojangles]

(11-21-2013 01:59 AM)Sp5 Wrote:  

(11-20-2013 06:16 PM)bojangles Wrote:  

Pah, you can't even live on that in Switzerland.

Yeah, but what would stop you from collecting and spending most of your time in Spain?

I'm not sure being Swiss will enable you to do that, as they aren't part of the EU

[runsonmagic]

So... how do I become a swiss citizen?

I want my monies in them' banks.

[babelfish669]

According to Wikipedia, Swiss population of citizens is 6,071,800, I'm not sure how many are out of country.

2,500 Swiss francs (useless to list this in USD for reasons further explained)

15,179,500,000 Swiss Francs per month * 12 = 182,154,000,000 Swiss Francs per year ( 182.1 billion Swiss Francs)

Swiss GDP was 579 billion Swiss Francs in 2010 (CIA World Factbook) ; the more common Purchasing Power Parity GDP is a lot lower (331.67 billion Swiss Francs.) Whats being counted and how may not be very meaningful. GDP can double count things, or count things that wouldn't exist if tax rates went up. If you could transfer GDP directly to tax revenue 182.1 billion Swiss Francs isn't unrealistic.

Current tax revenue 194 billion Swiss Francs, which is pretty close to their spending (they don't have the deficit spending problem at the moment.)

Some discussion about cost cutting if the Swiss plan was implemented, how much is a wildcard.

Either way, they have some options:

#1 double tax revenues
#2 cut 94%+ of existing spending.
#3 borrow 94%+ additional revenue beyond current spending
#4 print more Swiss Francs

A mixture of all 4 is probably possible. What will be the end effects are dependent on what the mixture is.

One thing most low income earners, and people who don't understand economics, easily miss is what is the effect of a blanket increase in the distribution of money.

If you play Monopoly, and give every player an additional 2,500 monopoly dollars, what effect does it have on the game?

In this case it would be like giving everyone on team Switzerland an additional 2,500 monopoly dollars -- except those monopoly dollars aren't universal. They are monopoly dollars only used by team Switzerland. If they taxed each other and redistributed the existing Swiss monopoly dollars between themselves then the other teams may keep valuing those Swiss monopoly dollars the same. If they did it another way, such as making new Swiss monopoly dollars, and tried to buy more things from other players they aren't going to be able to buy as much as before.

My guess is that a blanket income would trickle down to housing costs immediately. This is the most evident effect on areas of mass affluence, where typical employees make a lot of money -- San Francisco and Silicon Valley in the US. (Population growth in a limited geographic area also does this.)

Rents and home values would go up. Purchasing power wouldn't really increase. You can come up with laws to try to counteract this, but good luck on that one.

If Switzerland borrowed or prints to pay their bills, then the Swiss franc devalues and imported goods and materials costs increase (Japan is trying to do this now, but it could backfire very badly since they need to import so much just for basic survival like food.)

This is just the economic impact of such a plan based on simple arithmetic. What is the psychological effect?

Some country will try this in the near future. We are just seeing the impact of full automation doing away with human labor. Soon retail stores and fast food restaurants will require no human labor. Cars, trucks, buses, will drive themselves by the end of the decade. Much of farming can be done with robots today. Huge chunks of major corporations are just paper pushers which are not required for modern start ups. What will people who don't own land or have a very unique skill be left doing? Not much.