There's no need to introduce it all at once. Call it a "Citizen's Dividend" instead of a "Basic Income" and start it at around $30 a week. This can replace a lot of lower welfare payments and, given to everybody - not just workers, would only cost $450 billion or so.
It can also be used to introduce more money into the supply and gives you much finer grained control over inflation, for example. It can slowly be increased up until it becomes enough of a basic income for some people (not everyone would be happy with the same level of income, obviously).
As a concept, it also promotes the idea that you're an active member of society. As your society becomes wealthier, you benefit directly. There are a lot of pluses to the general idea.
This definitely needs to be called the "America Permanent Fund," and be explicitly marketed as a scaled-up Alaska Permanent Fund[0], which is a hilariously popular basic (small) income program that literally no one has opposed ever, no matter what.
[0] http://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Dividends...
How many people have any clue as to where tax revenues come from?
How many understand that other people have to earn that money first?
How many understand that if the people who earn money are burdened with much higher taxes to pay for someone else's BI, a lot of them them will just stop working because fuck that? How would that affect the burden on the remaining earners?
Please just think about it for a while.
No I don't. Frankly, I suspect I understand tax and spending a fair bit better than you do, probably because we've spent the past 2 years talking about it in Scotland due to the independence referendum (and the following talks on full fiscal autonomy).
> How many people have any clue as to where tax revenues come from?
Just about every grown adult on the planet? Who do you think pays taxes?
> How many understand that other people have to earn that money first?
Well, that's just plain wrong. You're conflating money and wealth. They're different things. Money is just created to reflect wealth: it's literally just invented by your government (or, in the case of Bitcoin, just by proven work). And wealth doesn't have to be earned; it just has to be created.
> How many understand that if the people who earn money are burdened with much higher taxes to pay for someone else's BI, a lot of them them will just stop working because fuck that?
Sure, I'm going to stop contracting at $3000 a week because, hey!, I could just live on $30 a week instead.
> Please just think about it for a while.
Yes, please do. There are actually intelligent objections to BI.
Here are some proper concerns: What about illegal immigrants in the country? What about the federal government having all your details if you want to claim BI? Would it be better to be state run than federal (or in the EU, by countries, or would it be better run as an EU project?). Would it create problems with inflation? Would it cause problems with the banking system?
Now, this would raise rents in that area slightly, but would have a downward pressure on rents in the more expensive area. In short, it might have the effect of equalising rents.
It's difficult to be sure, of course, which is why I think it would be a good idea to start BI low enough that we can keep an eye on what's actually happening (say $30 a week), as there could well be multiple effects all at once if you started at, say, $150 a week.
My point was that people have to do something to acquire the money they have, and no one is going to give it to them "for free". All the money people have represents some sort of valuable activity, time used and effort spent.
So basically, money isn't free. It costs time and effort, and that's a central reason for why there's a limit to how much of it you can take from people.
(Let's not bicker about the financial industry at this point though - they're not actually providing value anyway)
But it makes no sense to say that "money is just created to reflect wealth". I get that wealth is all of the stuff we have available to us, in whatever pursuits it may be useful, and so on. But money is just a means of exchange. It's fundamentally a commodity that has become widely accepted in exchange for goods and services.
Now that's not how our fiat currencies work in today's world, but that's just because governments have abandoned sound money altogether. What I'm talking about - and what you should be too - is sound money. Something that just emerged as money through people engaging in voluntary trades.
Anyway, you're not in a position to complain about my understanding about economics (or taxes or whatever).
> Sure, I'm going to stop contracting at $3000 a week because, hey!, I could just live on $30 a week instead.
Is that supposed to be an argument against something I said? You'll have to explain how.
I should note that money didn't "just emerge". The reason money from the Roman Empire, for example, became so popular, even outside the empire, was because it was government backed. Outside the empire, people traded goods and would just use bits of gold or silver to trade, which suffered from massive fraud (mixing with base metals).
> Is that supposed to be an argument against something I said? You'll have to explain how.
Yes, it's an argument against the bit I quoted. That people would stop working because they saw others living on BI. I'm not going to stop working because I can do a lot better than BI, even working part time. Especially if it's started low, at $30 a week.
Gold and silver sure as hell did, and that's what I was referring to, which I'm pretty sure you saw anyway, especially considering you brought up gold too.
Actually, the concept of "debasing currency" comes from the government of the time diluting the gold content of the gold coins in use back then.
> That people would stop working because they saw others living on BI.
Alright, so your argument against the idea that people would stop working because they saw others living on BI, is to snarkily suggest that you personally wouldn't?
Surely you understand that other people very much would, even if you personally wouldn't? You'll have to try harder.
No, they didn't. I was referring to gold and silver being used as tradeable goods, not as currency. There's a difference.
Bertrand Russell wrote an essay on getting rid of the gold standard called "The Modern Midas". You'll find it in the collection "In Praise of Idleness". You might find it interesting. In fact, you might find the whole collection interesting, though I doubt you'd agree with any of them.
> Surely you understand that other people very much would, even if you personally wouldn't?
Oh, please. How many people would give up a job to live on $30 a week? You can live on welfare better than that. Would you give up your job for that? Do you know anyone who would?
Oh come on. You know they did emerge, as mediums of exchange, which is what money/currency fundamentally is. You're making a meaningless distinction to cover your ass.
> Oh, please. How many people would give up a job to live on $30 a week?
We're talking about a Basic Income, where the idea is to get enough money to live on, right? That most definitely would cause many people to just stop working because they wouldn't need to anymore, even if the BI happened to be too low for you to stop collecting your phat paychecks. You get that, yes?
No, I specifically mentioned starting it low and even gave an example amount of $30 per week. Several times. My first post was saying "call it a Citizen's Dividend instead". With the exact reason that it would be good to monitor the effect.
If you're going to refuse to actually think and read then you're not worth my time. Go away and learn something.
End of the day, we're making lots of technological advances that aren't advancing people in a meaningful way. We've already devastated the working class so much. Truck driving is a key "success" job for many people. Take that away without prospects for something new, and you're going to have an uprising.
People need an occupation. 50 years of the welfare state should have taught that lesson.
Two people trading with each other is not, because both perceive a benefit, because otherwise they wouldn't trade.
Opposition to UBI comes from people with a clue about economics. One more time: the money for UBI has. to. come. from. somewhere.
Money is not free, and therefore it can't be just handed out by the truckload without adverse effects elsewhere in the economy. Whoever gets free money is happy, but someone somewhere was burdened more than before and is unhappy.
First, let's talk about utility. Utility of capital is non-linear. So, if we take $100 out of a millionaire's pocket, and distribute it evenly to 10 people who each have $100. The millionaire's ability to contribute to society has decreased by 10 units. The ten other members of society each had their ability to contribute to society increase by 2 units. We've generated a net-gain for society by redistributing wealth.
Second, we can look at the dollar value of the system. Yes, I would argue that even the dollar value of this redistribution is not a zero sum game. Obviously the basic transfer of wealth was zero sum. But it made our enonomy slightly more efficient by improving the capacity of the 10 citizens. Let's say the economy grows $10 more than it would have without the redistribution. Suddenly, even in just dollar-value the redistribution was not zero-sum.
It's important to realize that UBI is a response to extreme income inequality, which can cause large ineffeciencies in a market. Automation obsoleting jobs only needs to lead to UBI if that automation leads to rising income inequality. If we find a way to work with technology that keeps income disparities at a reasonable and efficient value, then there's no need for UBI. However, income inequality has reached to pretty significant heights and continues to grow.
Are you taking into account the fact that 10 people now have a means to convey to entrepreneurs that some new product or service would solve a problem they have? Does doing this on a larger scale increase the ability of an entrepreneur to bootstrap a company through revenue rather than acquiring capital from now-poorer millionaire (whom we'll assume was an investor)?
Utility: http://en.wikipedia.org/wiki/Utility
Non-Linearity: This suggests that the utility that someone derives from wealth is not linearly proportional to their wealth. A simple example may demonstrate this more clearly: We give both an extremely wealthy person and an extremely poor person $10. The poor person will get more utility out of that $10 than the rich person will.
For example, if you're really hankering for an apple and you eat one, that apple will be more satisfying than the second one, because the first apple satisfied your strongest craving.
The same can be applied to resources etc.
But more importantly, why would anyone else have the right to decide how your property is allocated or used, even if you do happen to be rich?
Besides, even if you redistribute people's property based on the idea that the end justifies the means, what if the poor people you're helping through harming others don't use the money wisely? What if someone gets $10 and uses it to maintain his alcoholism? -Did your grand vision of increased Societal Utility come true?
Even disregarding morality, which would be.. rather psychopathic, how can you know if people will use the money wisely? What about Rational Actors® and Efficiency®? :)
No, I was using marginal utility to demonstrate that the relationship between total wealth and the utility provided by that wealth is non-linear.
To complete the full thought: Marginal utility is the first derivative of utility. If marginal utility is constant, then overall utility is linear. If marginal utility trends downward then the overall utility is non-linear. Since we appear to agree that marginal utility tends to decrease, then calculus forces us to agree that the utility that someone derives from wealth has a non-linear relationship with that wealth.
> "what if the poor people you're helping through harming others don't use the money wisely"
I think it's a fair question, but it seems hypocritical to ask immediately after asking: "why would anyone else have the right to decide how their property is allocated or used".
However, every study I've seen done on this issue has shown that unconditional cash transfers to impoverished people tends to be used reasonably well[1]. Certainly there will be some people who choose not to use redistributed income well, just as there are some people who have lots of capital who choose not to use their income well.
> "why would anyone else have the right to decide how your property is allocated or used"
This one you'll have to take up with the Supreme Court, Congress, the United States Treasury, and the Internal Revenue Service who all take it as a given that the United States Government has the right to decide how your property is allocated or used.
Again, as mentioned in our other comment thread, since you seem to be advocating for zero taxes and zero government spending, I don't think we can come to any meaningful resolution on these issues in a text-format over the internet.
I think this is the critical point of our disagreements over UBI — you find all government spending to be theft and morally wrong. This isn't an argument against UBI, but an argument against the entire system of governance that the world has adopted. That's totally fine, but it's not an argument that I'm prepared to consider on this particular forum. If you want to continue this discussion, let's do so in person or over the phone sometime.
[1] One example of a study showing gains from unconditional cash transfers: http://www.princeton.edu/~joha/publications/Haushofer_Shapir...
> I think it's a fair question, but it seems hypocritical to ask immediately after asking: "why would anyone else have the right to decide how their property is allocated or used".
Why would it be hypocritical? I'm not advocating for someone else using your property, nor for helping some through harming others.
> However, every study I've seen done on this issue has shown that unconditional cash transfers to impoverished people tends to be used reasonably well[1]
Didn't we already conclude that evidence is really quite meaningless in this discussion? It's not difficult to find statistics and articles to support the idea of redistribution.
It is difficult, however, to explain why anyone's money should be "redistributed" away from him, considering it's his property. If a rich person's kid has a shitload of Lego bricks, should some of them be taken away from him to be redistributed to poor people's kids?
> Certainly there will be some people who choose not to use redistributed income well, just as there are some people who have lots of capital who choose not to use their income well.
What does it mean to use one's income well? Who decides if my use of my income is acceptable? Why would anyone be in a position to decide that for me?
If I want to buy my seventh Ford Fiesta because it will bring me immense joy, can you claim I'm not using my capital or income well?
> This one you'll have to take up with the Supreme Court, Congress, the United States Treasury, and the Internal Revenue Service who all take it as a given that the United States Government has the right to decide how your property is allocated or used.
Well no, I don't "have" to, and that would be roughly as worthwhile as writing to your representative, asking not to get shafted by SOPA/CISPA/PIPA/NDAA/PATRIOT ACT/etc.
Instead, I brought it up with you, as part of OUR discussion here, which you're perfectly capable of continuing by answering my question.
Here's a related video though: https://www.youtube.com/watch?v=ngpsJKQR_ZE
I would be happy to continue the debate in a different venue — a thread with the ethics of taxation as it's core concept, a different website, an e-mail thread, a phone call, or an in-person meeting. Let's take this to a more appropriate place, and I'll happily continue the discussion as long as it remains productive.
Add '@gmail.com' to the end of my username, and we can go from there.
Any ideas, then?
But there isn't. The money has always had to come from somewhere, and it's always had consequences. It's just that the consequences can't be swept under the rug anymore, and soon even the most fervent propaganda will fail to convince the masses that everything is alright and the economy is recovering (when in reality it's not, and it's not).
Since reasoning alone doesn't lead to an obvious answer on this topic, then I would argue that yes, you do need evidence to back up your claims.
> "do you think there's no limit to how much of other people's money governments can spend?"
It's obvious that there exists such a limit. However, the existence of that limit doesn't do anything to help us determine what amount of government spending is the most efficient.
The claim that:
1) There is a maximum amount of government spending possible
2) Therefore, the current government spending is too high
Has the same flaws as:
1) There is a maximum velocity that we can travel (c)
2) Therefore, the current highway speed limit is too high.
[1] For example, there were a large number of respected economists that weighed in on both sides of the 2009 American Recovery and Reinvestment Act
You want to know what amount of government spending is the most "efficient", but you should first define what you mean with efficiency in that context.
In ordinary life, efficiency involves maximizing output from input, right? A car can be more fuel-efficient than the previous year's model, and so on.
So you want government spending to be "efficient", but all government spending represents a wasteful middle-man between people and their money and whatever goods and services they need. Therefore, all government spending is "inefficient" from the point of view of the people whose money governments spend.
So I'd say that there's no such thing as efficient government spending. What's efficient is people paying for stuff on a free market with free and unhindered competition among providers. Surely you know how competition works, and results in lower prices and higher quality, right? In other words, free competition results in maximal "efficiency" in an economy.
In conclusion, if you want maximal efficiency in the way money is spent, you can't support the idea of any government spending.
The main difference being that evidence changes between 2009 and 2015. Maybe there is new evidence since then to really support your claim that I'm not aware of? Evidence is constantly changing. Raw reasoning and logic is not constantly changing. If the only basis we're working from is rational thought, then you should be able to reach the same conclusions that Aristotle did.
Hence, the request for evidence.
> 'You want to know what amount of government spending is the most "efficient", but you should first define what you mean with efficiency in that context.'
I'm using efficiency specifically in the economic context (http://en.wikipedia.org/wiki/Economic_efficiency, http://en.wikipedia.org/wiki/Productive_efficiency).
I'm sorry for assuming an economic context for my terms — elsewhere in the thread you asserted that "Opposition to UBI comes from people with a clue about economics" so I made the assumption that you were familiar with economic terms. Additionally, I'll be the first to admin that my economics background is merely some early econ classes in college and a general interest afterward. I'd be very interested to hear from any economics if I've badly mucked up any of these concepts.
> "In conclusion, if you want maximal efficiency in the way money is spent, you can't support the idea of any government spending."
I don't think there are many serious economists that you back you up on this assertion. This claims that I would be happier if there were no roads, no water supply, no education systems, no protection from criminals (which technically don't exist because there's no criminal behavior), and no protection from other countries. I absolutely would like some of my money taken and spent on those thing.
I'm happy to debate if the amount of government spending is currently too high or too low; I'm happy to discuss where the best place for it to be is. However, if you would seriously contend that the correct number is zero I think we may be too far apart on a base ideological level to continue this conversation in a productive way. At the very least arguing economics won't get us to any common ground — I think we'd have to switch over to philosophy before we'd find common ground.
That's exactly why it's a better foundation for economic conclusions.
Why would you keep requesting evidence even after acknowledging that there's evidence every which way? Anyone can just cherry-pick evidence that suits them, but where does that leave us?
Reasoning based on correct premises works pretty well though.
> I'm sorry for assuming an economic context for my terms — elsewhere in the thread you asserted that "Opposition to UBI comes from people with a clue about economics" so I made the assumption that you were familiar with economic terms.
Let's just say I've seen those terms thrown around, but they're vague and obtuse enough to be practically meaningless. That's hardly surprising, considering their main use is rationalizing government intervention.
For example, no economy can ever reach "pareto optimality": http://en.wikipedia.org/wiki/Pareto_optimality .. because every single voluntary exchange leaves both participants better off, because otherwise they wouldn't go through it. Since value is subjective, it really is enough that they both perceive a benefit in the trade.
If you want to argue against that, you'd have to somehow magically know how much I'd be willing to pay for a Ford Fiesta tomorrow at 4pm. But you can't. No one else can. Just like I couldn't possibly know your preferences at some given moment in time.
So yeah, pareto optimality is nonsense, as explained above, and so is a lot of the other stuff involved in these discussions. That's part of why I demanded definitions.
> I don't think there are many serious economists that you back you up on this assertion.
You'd have to look to the Austrian school of economic thought for that, but all of them would agree with me.
> This claims that I would be happier if there were no roads, no water supply, no education systems, no protection from criminals (which technically don't exist because there's no criminal behavior), and no protection from other countries.
All the services you list are provided by people working for a living. Do you want to claim people need governments to tell/force them to work for a living?
> I absolutely would like some of my money taken and spent on those thing.
No you don't. No one wants to be robbed, any more than beaten to a pulp with a baseball bat. What you might be thinking is that you're willing to pay for those services, but that would also apply without getting robbed.
> At the very least arguing economics won't get us to any common ground — I think we'd have to switch over to philosophy before we'd find common ground.
You're right about that :)
Do you think Basic Income will be sufficient enough to sustain anyone's lifestyle that they will _stop working_ out of spite?
Perhaps not out of "spite" as you suggest, but a simple time tradeoff. E.g. "Work 8 hours per day, and get $100 more. Or work 0 hours per and have $100 dollars less to spend, but 8 hours more to work on hobbies and leisure and social activities.
That situation exists today, and to a greater extent than it would with a basic income. Due to the loss of benefits, as income increases the working poor face huge effective marginal taxes, sometimes over 100% so that they are literally made worse off by earning more. See https://www.epionline.org/studies/r27/ for example.
All in all, it just doesn't "work".
just like water, money disappears forever once used.
water flows from the mountain into the sea, and one day the river will run dry.
the government is like Niagara falls, a huge waste of money/water.
Universal Basic Income would accelerate this flow of moneywater, and is so obviously a bad idea that its opposite, Universal Basic Outgo is a good idea.
UBO would reverse the flow of moneywater by taking the same monthly sum of money from every citizen and pumping it uphill.
this would motivate everybody to work harder, resulting in a happier society with enormous moneywater reserves in the mountains.
This is where the money comes from. It’s not just New York, but everywhere. And not just property taxes.
There's also a limit to how much people are willing to pay in property taxes before they move the fuck out (or stay away to begin with).
In a nutshell, there are limits to what governments can do with their economies.
And most people are actually happy, because they still get free college, free child daycare, etc.
Aren't the standards of citizenship currently being eroded to suit whichever ethnic-voting-block the party in power happens to be pandering to today? Today's illegals are defacto citizens as evidenced by America's bankrupt ESL schools, hospitals, and "citizen-only" social services. Cutting a check for the rest of the Earth's six billion people who "make it" to America is a recipie for exponentially more economic-refugee-cum-colonists.
This is how life boats sink.
There are plenty of other nations available for globalist theorists to potentialy help and likely destroy.
I believe we differ on fundamentals, and certainly on the notion of "success". A nation is more than place to make money, rather it is a home for an extended family. Economic arguments quantify away the essence of a nation: a living space set aside for the well being of progeny. Either a people is in control of its inheritance, or, its inheritance is being subsumed by another tribe. When viewed in these terms, rather than flourishing since the second World War, the United States has in fact been on a path to dissolution. And one can do better than a URL for proof of this; go to Southern California, open your eyes, and be honest. There is a reason Southern California's Anglo middle class paradise of 1880-1970 is now a squalid Latin American sweatshop; demographics is destiny. Calcutta is Calcutta because Calcuttans live there. Detroit is Detroit because Southern Blacks now live there. Etc.
If this does not ring true to you, feel free to disagree with me, but please, try the alleged benefits of demographic substitution somewhere where economists will feel the pinch themselves. Given the large number of Jewish economists I've read over the years, Israel would be a prime testbed (if the nation wasn't currently sterilizing and exiling their Black Ethiopian populace). Middle class gentile globalists could start by opening the floodgates to their own gated communities and HOAs before gleefully replacing their "unwilling worker" blue-collar cousins.
>If we're going to talk about demographics, you should also consider the fact that the US is facing a shortage of younger workers relative to retirees
This thinking is completely backward, IMHO. The economy serves the people, the people do not serve the economy. The means is not the ends. If a people cannot afford to have sufficient numbers of children, the problem is not with the people, its with the (usurious) economy. The economy needs to be replaced, not the people.
I'm glad you pointed that out because it makes the challenge more manageable (about half of what I first suggested), but the underlying political principle is the same.
As a matter of policy, I'm all for broadening the tax base, ideally to 100%. But that makes zero sense in concert with BI.
I can also see introducing BI as an opportunity to remove some of the tax expenditures that riddle the tax code -- broaden the tax base. But I don't see any reason to change the basic nature from progressive to flat. After all we'd still need to raise quite a bit of money to pay the BI as well as the remaining government functions that BI doesn't replace. Even under the current progressive model, eliminating tax expenditures is probably not going to be enough.
One argument I see for making them file anyway is reducing disincentives to work; I'm not at all sure the magnitude of that disincentive is worth the extra paperwork, though.
The way to do it is probably paying only to the unemployed. Sounds socialism, because it is. But hating socialism just because USSR did it the wrong way is, in my opinion, stupid.
.. yes? That's the point. Along with increasing the lower limit on the amount of food you can have and the amount of housing you can have, up from "starvation" and "cardboard box".
Housing is more complicated. With basic income you're free to choose less expensive areas because you aren't required to find work. There might be some ups and downs but it will settle.
Obviously, economy is vastly more complicated, and there are correlation effects between everything, so I don't know...
Wealth redistribution also does have the effect of increasing the money supply, without minting more money. The poor tend to spend 100% of what they take in, while the wealthy put a large portion of their money in the bank, where its not circulating in the economy.
The truth of the matter is: Banks do not need deposits to make loans.
Quite the contrary: Banks make loaning decisions independent of the level of their deposits - and it is the loan that causes the deposit, rather than the other way around, because the money loaned by the bank eventually lands in somebody's deposit.
Think about it this way: A bank cannot force anybody to take out a loan. Instead, there is a demand for loans which banks satisfy (subject to checks of creditworthiness and available collateral). Whether person A spends $10 or puts it in a deposit does not change person B's demand for credit,[1] and therefore the amount lent by banks does not change either.
[1] Of course, this is not entirely true. There can be causal links, but their direction is totally uncertain. For example, person A deciding not to spend money could mean that person B's business begins to struggle and person B needs to take out a loan that they otherwise would not have had to take. In that case, saving does increase the level of loans, but in a way that most people would judge to be detrimental to the economy.
Conversely, person A deciding to spend the money could lead to person B's business projecting growth, which encourages person B to invest by taking out a loan. In this case, the loan level increases as well, and in a way that most people would judge to be beneficial.
The economy is complicated.
Reserve requirements dictate what percentage of deposits banks have to keep on hand rather than loan out, and its inverse, the money multiplier, determines how much the money supply is expanded by repeated application of the deposit->loan process. This seems to be the standard treatment: I checked Abel-Bernanke's and Mankiw's Macroeconomics textbooks and they both tell basically the same story.
The supply and demand for loanable funds are balanced through a price mechanism: the interest rate. If banks have lots of deposits and can't loan them all out, then they'll lower the interest rate that they charge until they can. If there's more demand for loans than can be covered by deposits, then banks will increase the interest rate that they charge until the two are balanced.
Compare this to a private investment arrangement where after you invest (aka lend) your money, your money is gone (in exchange for the promise to get more back later, and/or certain other rights such as ownership in a company).
When banks lend out money, what they do is either give you an account with a positive balance (in this case, the money doesn't have to come from anywhere, because all the bank is doing is changing some rows in their databases) or they make a payment to another bank on your behalf. In the latter case, the money that you actually see as a bank customer again doesn't have to come from anywhere, because it gets created by the involved banks changing some rows in their databases. There is also settlement in reserves occuring behind the scenes, and if a bank's reserve position drops low, what I write elsewhere applies: As long as a bank is solvent, they can always get reserves either from another bank or, in the worst case, from the central bank.
As far as the money multiplier is concerned, there are two ways to look at it. The first is empirical: https://research.stlouisfed.org/fred2/series/MULT How does a wildly varying money multiplier fit in with your story?
Also, there a countries where the reserve requirement is zero. The inverse of zero is not well-defined or infinity, depending on how you look at it. Yet those countries don't have an infinite money supply. How does that fit in with your story?
The second way is from first principles by actually looking at the laws. If you look into reserve requirements, you'll see that banks only have to satisfy them after the fact. That is, people in a bank's loan department first make loans, and then people in a different department of the bank go out and ensure that the bank satisfies the reserve requirements. They usually do so by lending and borrowing on the interbank market, but if they cannot borrow there, they can always get the required reserves from the central bank. See e.g. here: http://en.wikipedia.org/wiki/Discount_window
Finally, your last paragraph does show a potential causal pathway from increased savings to a higher demand for credit, via the interest rate. The import question is the relative strength of that pathway compared to others, such as the ones that I have described in my previous comment.
Obviously even economists end up disagreeing on that matter, given their political biases (though beware false prophets paid by wealthy people to spread lies and half-truths). Three final points on that particular matter:
(1) How sensitive to interest rates do you really think loan demand is? If a business sees growth in revenue, they are likely to invest and expand (which often involves taking loans) even in a high interest rate environment. On the other hand, if a business sees decreasing interest rates but also a fall in revenue, will they still take on loans in order to invest in a growth of their business? The answer can be yes occasionally, but it is more likely to be no. This is supported by surveys of business leaders.
This point is important, because in the face of high savings, businesses may see lower interest rates as a second-order effect, but they will also definitely see lower revenue as a first-order effect. When a large-scale shift of customer behavior towards savings happens, then businesses will see the fall in revenue first, long before banks lower their interest rates on loans.
(2) Empirically, some people have predicted for a long time, since the beginning of the financial crisis, that low interest rates would bring growth back via investment. And yet interest rates have been at the zero lower bound for some time with at best mixed results. (Again, the quantitative parts matter: Yes, low interest rates encourage demand for credit, but how strong is that effect compared to others that may go in the opposite direction?)
(3) The range in which interest rates actually vary by that mechanism is limited, because the central bank fixes the short term interest rate based on political considerations. (That's what e.g. the FOMC meetings in the US are all about. It's totally in your face, actually, but still many people refuse to really grok it ;-)) Obviously, the long term interest rate for loans taken by banks (which is some markup above that politically set rate) can vary, but the real story is control by the central bank.
[My comments are getting too long, so I stop here, even though there are more details to be talked about.]
This is definitely not true. If everyone asks for their money at once, the money won't be there because most of it has been loaned out. That's a bank run.
> How does a wildly varying money multiplier fit in with your story?
Over three decades, it looks pretty stable to me. The multiplier also varies based on the amount people want to hold in cash (I'm getting this from Krugman's book), because that's how money leaks out of the deposit->loan cycle. That could easily vary a non-trivial amount over 30 years. The most recent period where the multiplier is less than one I will grant is weird. The Fed has started paying interest on reserves, and banks are more wary post-recession, so they've started accumulating a huge amount of excess reserves: https://research.stlouisfed.org/fred2/series/EXCSRESNS.
> there a countries where the reserve requirement is zero
Obviously, the ratio that matters is not the legal minimum reserve requirement, but the actual effective reserve ratio. A bank has to keep a certain amount of reserves to keep their business running. The legal requirement is just to make sure that the amount they keep on hand is prudent. There's also the aforementioned leakage of money out of the deposit->loan cycle via currency held by the public, which can reduce the money multiplier further.
The rest of your post gives some good reasons that the real world doesn't work quite like the mainstream theory. It sounds like you're explaining an endogenous money theory; do you have any suggested references for further reading?
Getting money for being a member of society*. After all, we already don't let people starve.
> The way to do it is probably paying only to the unemployed.
A lot of people think so, but this is actually a subtly terrible idea because it strongly incentivizes being unemployed.
Are you sure about that?
and then
"The way to do it is probably paying only to the unemployed"
Foe some weird reason you seem to think "unemployed" are exempt from "people not doing anything".
Anyway, the problem here is not socialism (socialism actually had mandatory labour). It is that you subsidy unemployed. You will get more unemployed. People who are forced to do nothing.
With Basic Income people are encouraged to work at least part time.
Shipping doesn't add a whole lot of cost to goods already though, an awful lot of bananas fit on a pallet (I think bananas are a reasonable example here, they are shipped overseas, cheap, bulky and somewhat fragile).
That said, I remember this article about a well known futuristic society that possibly made the transition to a post scarcity world http://www.slate.com/blogs/moneybox/2013/11/18/star_trek_eco... I'd personally be happy to live in that kind of world.
Where we are and where they are are known, how to perform the transition is still to be understood.
Quantitative Easing is the creation of money to buy assets and therefore carries the risk of asset price inflation. It is used when the central bank intends assets prices to go up, e.g. after they slumped in a recession.
Basic Income on the other hand does not entail creation of new money. Most Basic Income proposals finance the costs through taxation or other government revenue (including savings from simplification and/or reduction of welfare programs that BI allows).
Creation of new money to redistribute to consumers would cause consumer price inflation and is unlikely to bring meaningful benefits in the long term.
EDIT: Also, the money created by the central bank in QE is lent to the government and/or banks, not given to them. It must be returned to the central bank. On the other hand, BI is not debt and need not be repaid.
The problem is that a basic income to (say) the 150m people in the civilian labor force x the ~$23k poverty line income would be about $3.4 trillion, which is not far off the entire federal government budget. That's (very roughly) $10,000 worth of redistribution for everyone in the country, which is going to be an incredibly tough sell politically, for reasons that I hope are obvious.
People in general are terrible at doing sensible things to stave off a distant-seeming catastrophe, viz the relatively poor progress on lowering/mitigating/managing the effects of climate change (whether or not you believe it's humanity's fault) or any number of other topics.
I do agree with the writer's conclusion and reasoning, I'm just pessimistic about our ability to manage the accelerating pace of disruption.