Best of the Week
Most Popular
1.Stock Market Crash and Recession Indicator Warning: Extreme Danger Ahead - Harry_Dent
2. Is This How World War III Begins, In Almost Complete Silence? - Jeff_Berwick
3.Trump Wins 2nd Presidential Debate, Betfair Betting Markets Odds Bounce - Nadeem_Walayat
4.Why Krugman, Roubini, Rogoff And Buffett Dislike Gold - GoldCore
5.End of SPX Stock Market Correction Nears - Tony_Caldaro
6.Get Ready for the Future - Exponential Machine Intelligence Mega-trend towards Singularity - Nadeem_Walayat
7.US Housing Market Bubble II – It’s Happening Again! - Andy_Sutton
8.FTSE BrExit Stock Market Panic Crash Resolves towards New All Time Highs - Nadeem_Walayat
9.Can Trump Still Win Despite Opinion Polls, Bookmakers and Pundits all Saying Hillary has Won? - Nadeem_Walayat
10.Gold’s, Miners’ Stops Run - Zeal_LLC
Last 7 days
This Past Week in Gold - 24th Oct 16
Can Gold Continue To Rise, Since The Usd Is Moving Higher Too? - 24th Oct 16
Why are Americans Avoiding the Stock Markets; Fear or Lack of Money? - 24th Oct 16
The US Is NOT a Low-Tax Jurisdiction - 24th Oct 16
Stocks, Crude Oil and EURUSD Trend Forecasts - 24th Oct 16
Stock Market Another Month to Go? - 24th Oct 16
Large Sell-off in Stock Market Looming - 24th Oct 16
Ungovernability - 24th Oct 16
Stock Market Boredom Before The Storm - 24th Oct 16
Establishment Mainstream Media Elite Buys US Election for Hillary Clinton, Time Running Out for Trump - 23rd Oct 16
Inflation About To Explode Higher - 22nd Oct 16
Still waiting for SPX uptrend to kick off - 22nd Oct 16
Will a Rising US Dollar Crush Gold’s Fledgling Bull? - 22nd Oct 16
Why The Global Economy Will Disintegrate Rapidly Back to Olduvai Gorge - 22nd Oct 16
GLD Bleeds Out; Weekly Gold Update - 22nd Oct 16
Stock Market Investment Success Through the “Investment Rule of 72” - 21st Oct 16
The Final Bottom in Gold - WHEN - 21st Oct 16
Gold Green Lights Upleg - 21st Oct 16
Demand for US Mints Silver Eagles has ‘Returned with a Vengeance’ - 21st Oct 16
Central Bankers Can't Stop The Death Blow Of The Post US Election Recession - 21st Oct 16
The Fortune at the Bottom of the Pyramid: Golden Opportunity for Frontier Asia - 21st Oct 16
Have You Taken These 4 Simple Steps to Improve Your Trading? - 21st Oct 16
The Stock Market is an Accident Waiting to Happen - 20th Oct 16
It's Rally Time for Gold and Silver Equities - 20th Oct 16
Cashless Society – Risks Posed By The War On Cash - 20th Oct 16
China's insane Housing Market Will Tumble and Crash in 2017 - 20th Oct 16
Donald Trump Bounces Going into 3rd and Final US Presidential Election Debate - 20th Oct 16
Attention Please: Phase Two of the Gold and Silver Train Now leaving the Station. All Aboard? - 19th Oct 16
How to Successfully Trade a Stock Market Crash - Black Monday October 19th 1987 - 19th Oct 16
Tesla, Apple and Uber Push Lithium Prices Even Higher - 18th Oct 16
Silver, Debt, and Deficits – From an Election Year Perspective - 18th Oct 16
UK Property Market: Slow Growth Does Not Equate To Decline - 18th Oct 16
Trump Election Victory is in Your Power - 18th Oct 16
Stock Market More to Come! - 18th Oct 16
This Past Week in Gold and Silver - 17th Oct 16
A Falling Stock Market Cannot Be Allowed - Financial Repression Is Now “In-Play”! - 17th Oct 16
Commodities, Forex and Stock Market Trend Forecasts - 17th Oct 16
Stock Market Crash..or No Crash? - 17th Oct 16
A perspective on risk rally – Risks abound but Stock Market is Confident - 17th Oct 16
Bank of England Blames Brexit for Sterling Drop Inflation, Masks QE Money Printing Cause - 17th Oct 16
From Piety to Pride to Pity, America's Racial Divide - 17th Oct 16
Is Obama Juicing US Government Spending To Get Hillary Clinton Elected? - 16th Oct 16
Seek Your Independence: Anything Else Will Destroy You - 16th Oct 16
SNL - US Presidential Debates, 1st, 2nd, VP - Like You've Never Seen them Before! - 16th Oct 16
End of Economic Growth Sparks Wide Discontent - 16th Oct 16

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

LEARN to Trade

The American Dream is Dying But it Can be Revived

Economics / US Economy Jan 14, 2016 - 07:01 PM GMT

By: Gordon_T_Long


Charles Hugh Smith and Gordon T Long follow-up to their discussion last month of the puzzle of the falling US Civilian Labor Participation Rate. In this session they tackle the issues associated with "Universal Basic Income" which the public narrative has begun to 'offer up' as a solution.

Public Narrative

"A Solution to Automation -- Universal Basic Income for all"

The conventional wisdom is that a guaranteed free-money check from the central state is the solution. This is nothing more that "A Redistribution Scheme: A new form of Subsistence Serfdom"

• It doesn't address how this enormously costly program will be paid.

• It is Understood that the "Wealthy" will pay for it!

• Runs aground on the reality that upper-middle class and top 5% already pay 93% of all federal income taxes; they actually can't afford more taxes.

• The top .01% who can afford to pay will continue to buy political protection of their income, and that's not going to change:

Declining Labor Participation Rate - The Status Quo has no solution!

Declining work force will be unable to pay for the "pay as you go" social programs such as Social Security, Medicare and Medicaid.

Declining labor force will also be unable to support more borrowing -- and the system requires more borrowing just to keep afloat.

Decline of labor is the inevitable result of automation, which has only started eroding white-collar and managerial jobs.

The Reality: New technology creates far fewer jobs than it replaces/destroys

The Reality: Today's Tech Giants Are Creating Loads Of Wealth But Pitifully Few Jobs

Why Basic Income is not realistic or positive:

-- Financially unsustainable,

-- A disaster for those getting the welfare check. They are essentially serfs, with no incentives or pathways to build capital.

For the Wealthiest - A Private Tax System That Saves Them Billions

-- ultimately, proponents of basic guaranteed income are relying on borrowing additional trillions of dollars to pay for the scheme. Not only is this financially unsustainable, it is immoral to load debt on future generations to pay for today's spending.

Why Firms Are Fleeing

-- as for expecting corporations to tax trillions more in higher taxes -- they're fleeing US taxes, and they are also buying political favors to avoid higher taxes.

Creating Jobs for All

Understanding The Differences

1- The failed model of WELFARE-FOR-ALL - Communal Poverty

• The central-state welfare model

• Top-down, encouraging dependency and helplessness -- and resentment

2- The Social-Economic model of SHARED BENEFITS flowing from working productively together

• The community economy

• Bottom-up, encouraging accumulation of capital, skills, etc.

• Creating the goods and services that are scarce and needed within local communities requires new ways of thinking and organizing work

Subsistance Serfdom

• Giving people money without getting any productive work is destructive to participants,

• Those who have to pay for the free-riders (the community) loses the labor of its residents.

• Our goal should be to provide meaningful work to people in their own communities, not give them subsistence welfare,

• Guaranteed income for all is just a new form of subsistence serfdom.

• Those looking to central state "solutions" such as basic guaranteed income are out of touch with the reality that real solutions come from below, in the entrepreneurial Main Street economy, not from above (central banks, politicians enacting new social programs, etc.)

... and much, much more in this 31 minute frank and open discussion..

Gordon T. Long
Publisher - LONGWave

Signup for notification of the next MACRO INSIGHTS

Request your FREE TWO MONTH TRIAL subscription of the Market Analytics and Technical Analysis (MATA) Report. No Obligations. No Credit Card.

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that you are encouraged to confirm the facts on your own before making important investment commitments. © Copyright 2013 Gordon T Long. The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or suggestions you receive from him.

Copyright © 2010-2016 Gordon T. Long

Gordon T Long Archive

© 2005-2016 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife