The Exchanges

Q Well, but do, but do that because that's the number that you'll hear in the news, especially with people arguing against it and then go and we'll work to the gross cost based off all the savings. So what's the total?

A Yeah. So if you do that, and then if you're going to do a thousand dollars per month, uh, per person, and you're going to go to citizens in the United States, then it's a little over three trillion dollars. That's the gross cost. Um, but it's important to understand that the net cost, because a UBI is a very unique program in that people are essentially spending money to receive money. And That is unlike any other program. If you're spending for healthcare, then you're spending money, but you're getting healthcare back. And so the cost of that is the cost. But if you're spending, you know, 10 dollars, let's say to go into a store and there's a, a 10 dollar bill on sale that you can buy, then you spend 10 dollars on it. Then are you 10 dollars richer? Are you 10 dollars poorer? Um, It nets out to zero. You essentially, you know, bought your own 10 dollars for the same of not doing anything. And so when you look at UBI too, there's this, um, you can look at it as a slope where there's a threshold point where someone is essentially paying 12,000 dollars to receive 12,000 dollars. And in which case that cost is zero. They're paying for their own. And anyone spending more than 12,000 dollars for their 12,000 dollars is again spending for their own. And then on the other side of that line, people are net receivers. They're spending, let's say, if you're spending 6000 dollars to recei…

AI assessment note: “then it's a little over three trillion dollars. That's the gross cost.”

Q can chat about that. But besides all the bureaucracy that you would do away with, it's about a trillion dollars annually in supporting, you know, Hundreds. I think it's maybe between a 102 hundred different kinds of welfare programs. Can we credit, will that trillion dollars of our current welfare state, uh, can we credit that and basically put that into, uh, paying for UBI? Will they replace each other?

A We can absolutely do that. And I, and I recommend doing that to a large degree, but not, um, a hundred percent kind of degree, because I think there are things that make sense to keep and things that don't make sense to replace with cash. Example of that would be like Medicaid. Like it wouldn't make sense to me to, to cash out Medicaid and provide people, um, that is money instead of you going about like a universal healthcare kind of system. That to me makes more sense, but there are programs. I think TANF is the best example of the program that absolutely needs to be cashed out. Um, right now that's a block grant system where the federal government is, is writing checks to states and states can actually determine for themselves how they want to spend that money on the poor. Now they're supposed to spend that money on the poor and it's supposed to be a cash program. But there is enough leeway involved that the amount of cash has actually decreased from what was originally over 70% to now 23%. So most of it is not even cash anymore. And it's also not even reaching people. Like a, a, a good example recently was, um, uh, gosh, I can't remember which, which state this was. This just happened. And it was that, um, the, the, the TANF money was actually, um, was actually given to a, to Brett Favre, uh, for appearances that he didn't even make. So, like, not only should they not have …

AI assessment note: “We can absolutely do that. And I, and I recommend doing that to a large degree”

Q If corporations, any company that sells a good or service in the United States has to pay a 10% VAT tax, Scott, doesn't that mean that to cover that extra expense, they'll just increase their prices by 10%?

A It's certainly possible. Uh, but at the same time, uh, there is competitive interest involved here so that you do not want to raise your prices if you don't have to. Uh, and so this could mean that instead of, let's say, Amazon, uh, uh, passing on, let's say, you know, five dollars onto, like, something that's, that costs 50 dollars, then they could, Lower that price to, to say, you know, um, if they wanted to eat the entire thing, say like, you know, 45 or round there, pass that on, um, uh, so that the consumer ends up still paying 50 dollars instead of 55 dollars, even though the 10% tax is actually added on. That, it really depends on competition, and we also see in Europe, too, that around, on average, about half of that is passed on, and about, um, half is absorbed, and we also have seen something very similar to that happen just recently with all the tariffs that, uh, Trump applied to, uh, a bunch of goods, and we saw that, that these companies did not want to compress that onto consumers. They wanted to try to eat as much of that as they could, Because again, they have a competitive market and they don't want to lose that competitive edge by increasing those prices.

AI assessment note: “we also see in Europe, too, that around, on average, about half of that is passed on”

Q Scott, sorry, what do you mean by, what do you mean by that? Spending 6000 on what?

A 6000 is increased taxes to receive the 12,000. So whatever the, the, um, the tax regime put in place, whatever you're doing to, to make the basic income possible, um, you have to subtract out what people are receiving from what they're paying to get it. And if you looked at, uh, like the 10% value added tax and Andrew Yang's freedom dividend, then the threshold point Depending on, you know, expenditure details, is that, uh, and also if you assume that the full 10% of the VAT is even passed on to the consumer, then if you're spending a 120,000 dollars on goods and services every year, and a hundred percent of that is going towards that, uh, that goods and services, and the full cost is put on, then you are essentially paying 12,000 dollars in VAT For your 12,000 dollars in basic income. That's where the net is. So those spending more than a 120,000 dollars on that goods and services are net payers, and those spending less than a 120,000 dollars on goods and services are net receivers.

AI assessment note: “6000 is increased taxes to receive the 12,000.”

Q every to every citizen. Doesn't matter. We're not going to try and decide who gets in, who doesn't. There's no bureaucracy. We drastically eliminate property in the United States. We're okay with less employment because we've created a baseline of capitalism and consumerism at 1500 dollars per month. I mean, why hasn't someone just come out and said that exclusively market the heck out of it and get it passed?

A Well, so I don't think that that would pass. I, I think that that's, uh, appeals to a very specific segment, and I don't think that that would be politically saleable. The closest that is, is, is Charles Murray, and so Charles Murray's plan is to actually cash out everything and just provide people this, um, universal basic income, and it actually, it was asked of economists if they would approve of that, and, like, it was virtually, like, no economist approved of that approach, To the point where it actually was, it was actually sold as being like, look at how many economists don't like basic income, you know, but it was, they didn't like that version of basic income. There's a lot of support for the idea of economists, but not that particular way of going about it. I think Andrew Yang actually sold it quite well talking about it as a dividend. I think that that helps people understand what it is in this full universality thing that really helps people to saying, look, this is not something for the poor. This is for everybody, and he would say that, you know, capitalism doesn't have to start at zero, and that's what, you know, this is. Instead of capitalism starting at zero dollars per month, it's capitalism starting at a thousand dollars per month. I think it's a very simple way of looking at it, and if you're looking at it as a dividend, then it's something that you have ear…

AI assessment note: “I don't think that that would pass... appeals to a very specific segment”

Q Isn't that bad behavior? Shouldn't we encourage job loss if these companies are making things more effectively and driving productivity gains?

A Oh, absolutely. I mean, again, we should be investing in automation, and we should be, we should get out of this, um, I'd say almost like, it's like a trap of full employment, this belief that, that it's best for people to be doing these jobs. Um, I think that we should be aiming for full unemployment. Like, our goal should be how much, uh, if a job can be done by a machine, then let's make a machine Do it. Uh, because that frees up that person to be doing other things, and it's not only about the enabling of activities, um, that automation, uh, enables. It's also about time, and in order to free up time, that is something that is, that is its own good, because again, we also need time in order to consume. So we have a 70% consumer-based economy, And this all ties into automation as well, where if you eliminate someone's job, then as long as income is coupled to jobs, then you actually are reducing their ability to spend on the stuff that the machines are making. So as you automate more and more, then the entire consumer based system breaks down because people are no longer able to purchase stuff. So we want to make sure not only that People continue to be able to purchase what the machines are producing, but we want to make sure that people have time to consume what the is being manufactured by machines. I think people are even kind of getting a taste of that right now, where …

AI assessment note: “Oh, absolutely. I mean, again, we should be investing in automation”

Q In claiming any ownership of that, how do we change that?

A Yeah, I, I think that it's a, it's important to, to kind of, um, to have that perception that this is a, it's a, a return on our investment. So like in Alaska, there has been a universal dividend since 1982. They received that because they believe that the oil of Alaska is something that they essentially all co-own. And when it comes to technology, basically all type one, all level one research is actually government funded. So all these tax dollars are going into these technologies, including self-driving cars. I mean, this was originally a DARPA project that was funded by the military really to start up. And, uh, there's a lot of these technologies that we create using our tax dollars, and then the companies just take the ones that seem like they could build into profitable businesses and profitable technologies and just use it, and then what do we get in return? We're just told that in return we get to be able to purchase those products, and it doesn't really make sense if you think about it in terms of, like, say, investing in Apple. Like, if you, if you buy stock in Apple, then when Apple makes a new product, you aren't just told that, congratulations, now you get to buy a new product. You actually have this, you know, a dividend that you can get from Apple, and you have a, a, an increasing value of that stock in Apple that can benefit you. So I think it's important that w…

AI assessment note: “I think it's important that we see our economy as essentially... a giant corporation”

Q fiscally conservative, but it's happening. And we're going to see, I mean, this is, we can kind of use this as a new sample, like a cohort case study on like, what does this do to the economy? So the, I mean, the question I guess I have for you is Is it going to take more crises like the virus? And that is actually the best marketer for UBI.

A I mean, we, the only reason we're talking about UBI like we are right now to the degree that we are is because of this crisis. And this crisis, it's essentially what those of us talking about automation have been talking about. It's just that the automation argument is something that takes place over a longer period of time. It's like, you know, the proverbial, uh, Um, you know, slow boiling frog kind of situation. And in this case, we just immediately, you know, put the frog in hot water and people went, ouch. That's effectively what we're doing right now is we're saying that, wait a second, we really do. People need money. They need it quickly. What is the fastest way to get people money? What is the, the most efficient way of doing it? Um, It should there be, you know, should we find people to give people money or should we just make sure that people get the money without any kind of, um, middlemen involved? Um, so that's suddenly the discussion that we're have because it's like such a, you know, an immediate kind of situation. And so, you know, whatever happens after this, um, I, I think that, that, uh, we're still going to see more of this. It's just gonna, it's gonna go back to the slow moving stuff. Um, But it's going to be, you know, perpetually painful to the point where this, like, this, this pain is going to eventually lead to just people being completely fed up with…

AI assessment note: “the only reason we're talking about UBI like we are right now... is because of this crisis”

Q Hillary Clinton in her autobiography mentioned they looked at having her run on this, uh, back in 2016. She chose not to because she couldn't figure out how to pay for it. How do you pay for this? That's what she says. What do you think the real, you laugh when you said, what do you think the reason was? Why didn't she make that a core piece of 2016?

A Well, I, I laugh because, uh, Hillary is Hillary, and she will say things based on the economic wins, and so it's, it's funny to me, um, how she claims that she was, uh, thinking about this and thinking I'm running on it, and maybe she was, but what I also think is interesting is when she was running, she was actually against the idea of basic income, so it wasn't, she didn't say, oh, I think it's a great idea, but we can't afford it. She was not interested in the idea. She didn't like it, And so I think that's, she's just choosing, um, she decided years later to say that she was thinking about it because it had grown more popular to the point where she then felt like the political winds were in her favor to say that she was for it. So that's why I kind of laugh about the, about the Hillary stuff. But when it comes to being able to afford it, Andrew Yang, he, he made a, you know, a good argument as far as value added tax and, and, you know, that would create eight hundred billion dollars, um, worth of revenue around that. And, um, and I like the way that.

AI assessment note: “when she was running, she was actually against the idea of basic income”

Q make the debt payments, right? So they can optimize their return. So even if you are now getting, you know, uh, Kamala Harris, Ed Markey, Bernie Sanders, monthly economic crisis support act, a 2000 dollar check, your rent went up. So these two things I see as directly competing with each other. One of them has to slow down for the other to become more effective. What, what buckles first?

A Yeah, I mean, obviously there's, there's already a, a big problem, um, and I, I actually, I, I'm, like, I feel, like, ashamed to even be in a country where we have decided to do the exact same thing that we did during the last downturn. Like, we already know that buying up all these assets was something that vastly increased inequality and vastly, um, Disproportionately, positively impacted, you know, asset holders. And we could have just bailed out the people, made sure that people could afford to, you know, pay their mortgages. And then that would have actually prevented these, you know, mortgage bundles, these, these securities to not fail. And instead we just went right to get them under the banks. Uh, and we're doing the same thing again. And so, yeah, that is, that is a problem. And, and it's also very inefficient. Like here we are, We're basically, the Fed is just shoveling trillions of dollars into banks and hoping that, that it will be cheap enough that people will take on debt and get that money out there and spend it. And it just doesn't, it's an extremely inefficient way of going about this. We could actually, the Fed could have introduced less money into this. Um, we could actually be paying for, uh, a 2000 dollar a month Uh, fully universal, uh, basic income, uh, for the amount of money that the, in, in, in the Fed is doing in one week. So, you know, it's, we're c…

AI assessment note: “the Fed is just shoveling trillions of dollars into banks and hoping”

Q owners always win. So home ownership makes sense. However, if we envision a world where we let automation happen using your quote, we aim for full unemployment. So people are jobless and you actually let prices decrease over time. Cash holders win and asset owners lose You would not want to own a home in that environment because it would be decreasing in value over time. How does that work?

A Uh, I mean, this is a, in a, a debate between, like, is, uh, an inflationary policy good, or is a deflationary policy good? Like, do you want prices to continually go up a bit, and what are the benefits of that versus the cons, and what are the benefits and cons of, uh, you know, prices going down? And, um, I mean, that's a whole argument that, uh, I, I don't think that, That's even, um, something to get into. Uh, you know, I would, I would say personally, I, I think that there, there is sense behind, um, prices increasing slightly. I have no problem with a, a small amount of inflation, and also, I, I actually don't even have a problem with the larger amount of inflation, because again, that the, the more inflation that there is, is essentially Um, can be seen as like a wealth tax or something because it disproportionately impacts the, you know, owners of these, these assets. And, um, if you're, if you're taking out a loan on a house in a high inflationary environment, then you're going to pay back, um, much less of the value of that house, um, in a higher inflationary environment versus the deflationary environment.

AI assessment note: “that's a whole argument that, uh, I don't think that's even, um, something to get into.”