As we all know, ‘money does not grow on trees’. If it did, I hope we’d be kind enough to pass around some money tree seeds to share with our neighbours. Unless of course, money trees turn out to be only good for making money and nothing else. On the other hand, if money trees produced units of ‘work’ which consisted of a magic mix of raw energy, skill, and efficient application; we could all use one of these trees growing in our front yards. We could use these trees to accomplish wonderful things. As it turns out, we are the money trees, after all, if we do the right things, at the right time, we can make money. If we’re lucky, we even make enough money to pay ourselves for the effort (this is usually called financial savings). I know, this is a rather odd concept for me too, and as I understand, something like 63% of Americans don’t have any substantial financial savings. The cost of living takes up most of the made money if not more. Who knows, maybe some of us even ‘waste’ their money on booze and cheap entertainment. That could be, or it could also be that we’re all being duped by the existing financial system.
As we all know, we need to buy low and sell high! We need to reduce our costs and maximize our profits! Sure, sure, whatever, that’s all well and good, but it’s within our power to tweak a few parameters to make the financial system work for us again (rather than against us).
As you probably know, the Federal Reserve in the US has a role in how much ‘money’ is created. You may also be quite aware that the Federal Reserve did some ‘Quantitative Easing’ for a while which is another term for ‘increase the money supply’. If this sounds all hocus pocus, that’s probably because it is. This created money consists mostly of digits on computer spreadsheets. In theory, QE is supposed to stimulate the economy by encouraging banks to make more loans. Loans to who and for what? Well, chances are these loans will be for real estate more than for new or existing business (you know, businesses are the place where money trees are productive, not where they sleep). Whether the economy is actually changed really depends on how the ‘stimulus’ is spent not on how much of it there is. Did QE increase inflation as it was designed to do? Who the hell knows? Not me, that’s for sure. Maybe I did benefit from the QE program in some way, for instance, the whole banking system didn’t collapse and that should be a good thing, right? But who knows if this newly created money was actually beneficial to anyone? How do we measure this? I’m sure a few people have more ‘on paper’ but does that really matter?
The great thing is that it’s possible to create money which would be completely beneficial to everyone. What? No way, you say! I say way! What is this magical thing that can do such things? Well, it’s called basic income and it goes like this: Everyone and I mean everyone is given some money. How much money? Well, it depends on how much we decide on, the thinking though is that it’s enough to get by on for food and basic shelter and maybe some bus money, maybe that amount differs a little based on where you live. You know, it’s something, not a lot money, but something to keep you from robbing or begging for food. Isn’t this a form of welfare? Well no, it’s not like welfare because everyone would get a basic income no matter what, no conditions need to be met. Is there a catch? Sure, let’s say that you owe money on a credit card, well perhaps this money needs to pay off the debt before you can just get the cash. Fair enough, at least you’re getting some free money eh?
Now, at this point you might be thinking, “Well this is nice but inflation is going to happen!” Well, duh, inflation is already happening, whether more people are given some money doesn’t mean that will necessarily change. Some things are still going to be expensive while other things are still going to be cheap. The difference is that a lot of people would have a safety net. A means to get by when all else fails. It’s an investment in the money tree when the money tree can’t produce fruit that year. Not only that, but this ‘basic income’ idea has already been tried and tested. Turns out that if you have this basic income for everyone, some people slack off and take advantage of the free money! What? Yup. Stay at home moms spend more time with their kids when they have that option! (It’s like a few months extra, not the end of the world, these moms still go back to work eventually). You know what else? Turns out that a lot of these slackers take the money to learn new skills to be more productive money trees. Insane! I know, you’d think there must be a problem with basic income, that it can’t be as good as they say it is! Well, let’s give it a shot and see how much damage we can do!
When you give money to poor people, they often spend the money! What? Yup, poor people spend! And what is all that spending good for? Growing the real economy! More participation, more consumed goods. If you’re at all like me, and I trust that you’re not, but for the sake of argument, you might begin to wonder if poor people spending money means that poor people will be eating more, and consuming more products such as kitchen appliances and automobiles? After all, it’s the horrid middle class that eat so much meat and drive their stupid cars! Well, yes and no. It’s not always as bad as you might think to have a basic income. Having more money doesn’t mean you’ll eat more, in fact, you might have the freedom to eat better, to have more choice in what you eat. Whether we decide to build a transportation system that uses clean energy and that costs less to run is another discussion entirely. Poor people drive cars too, with some extra cash they might buy more gas and drive around more, but really? Who cares? That will probably happen whether we like it or not. Don’t like cars and all that nasty pollution? Well, let’s tackle that problem on its own.
An ounce of prevention is worth a pound of cure.
Up here in great white north at least, a homeless person will cost society more living on the street and interacting with police and the hospital system than they would if they were given free housing. What? Yeah, it’s way cheaper to spend money making sure that people have food and shelter than it is to pay their medical bills. I know, you’re thinking, well, let’s stop paying for their medical bills! No, let’s make sure we always invest in money trees whether they make fruit or not so that the whole orchard can benefit.