I don't think it's a difficult assumption: Why is the pie supposed to grow, let alone stay the same with trickle-down economics? If you can entertain the idea of trickle-down economics, which is giving the top-tier a bigger slice of the pie will increase the size of the pie, you can entertain alternatives. It's the exact same concept but with a different recipient; all citizens. We want to give the pieces of the pie to those who will grow the pie most, and trickle-down economists say it's the biggest producers, but others say it's the smallest producers. I think it's fair to establish a diminishing ratio of return; some companies can only get so big before more pie doesn't help the pie, while the smallest producers are the ones who stand to have the most growth in productivity. We know that money that goes up has trouble coming back down; we know that money goes up very easily, which is why flipping the trickle-down paradigm is a premise of UBI for increasing economic velocity.
Let's not get side tracked on UBI or MIN wage. Stick with the pie. You don't GIVE top tier or any tier anything. You take from what has been created. It has to be created first for you to take anything from it. If you just start taking the principal pie how will it maintain or even grow it's size? Tax breaks or tax hikes are meaningless if I have no profits to pay taxes on. There are many ways just get get money moving, but it usually involves friction and an inefficient use of capital. I've never heard of money stagnating. If I could find anything stagnant I would just write a short straddle on it. Why is it my money is always stagnant and yours is always fluid? How come all these ideas always involve me giving some more of my money to someone else? I don't ask the salesman if his kids have enough money for college when I buy a car. His poverty is not a good enough reason for me to buy a new car.
You replied to my comment but it does not appear that you understood any of it. The circulation of money does not create wealth, it does not increase wages, it is not a good measure of the health of an economy. I know you have been taught this and that it has become a prism through which you interpret economic reality, it seems self evident doesn't it? Sorry, its a flat world view; its wrong; it doesn't work. The article you link to is not a 'study,' the holes in its anecdotal metaphors to support ideology are big enough to drive an oil tanker through. The unidentified exogenous factors that impact the economies of Alaska and Kuwait are myriad and the role of UBI is insignificant; what do you think the role of oil might be? Think about what you suggest...we give everyone, or I suppose you mean only people at the bottom of the earnings metrics...say the bottom 20% of households, money with no conditions and we assume they will spend it quickly and that circulation will cause the whole economy to grow; it will increase domestic production because it will increase demand for products and then people will invest and grow the economy. What will these people spend this money on? Beer? Sneakers? Flat TV's? How much of that spending do you think will be captured by domestic production or is produced by domestic industry? How many do you suggest will start a business? I don't know how much money you suggest to hand out; I think you would be talking about something that would sustain the cost of living and that would be about it. I would not think they would have anything to invest in a business, nothing to save that would be invested in business. The idea of 'trickle-down' has always been a political pejorative embedded in a demand based, consumption paradigm. It really makes no difference who gets money when the idea of simply spending money is a wrong headed idea in the first place. It is not the spending of the money that matters, it is what you spend it on that matters. The whole idea of a general reduction in income tax is a consumption paradigm idea. The only thing that matters if you want to increase wage and create an increase in aggregate wealth is the spending, investing of money, profits from production, in the creation and maintenance of assets, assets being possessory rights to future income streams. It matters nothing whether you spend the money on a new pair of $400 sneakers or a Maserati, that spending does not expand the domestic economy in terms of real wealth. You have to spend the money on creating a future income stream domestically or you do not create any value in the domestic economy.
Ok, as much as I enjoy the pie metaphor, it may be getting tired. Help me understand from your perspective; how does the pie currently work, and/or how is it supposed to work? Duly noted; I do have a strong assumption about money circulation. Is it immaterial to the health of an economy? I'd assume all citizens would be recipients, not just low earners. If I had to speculate on the effects on entrepreneurship, I assume it would at least have a positive, nonzero effect. How much money depends, as it would definitely not start as a full-income replacement, but supplementary. All else being equal, what is median wealth's correlation with the health or productivity of an economy? Also, could each citizen be considered a potential asset?
Think of the pie as a craps table. The government being the casino. Very difficult to support a full time shooter. Need more gamblers or we will have to borrow just to pay the showgirls.
Very funny, and now the metaphors are running wild, but I'll play, disregarding the expectancy in craps. Where does the government spend their money? Who does the casino borrow from? Who are the fulltime shooters? Who are the other gamblers? Who supports the casino's take? The full timers or the rubes? Ideally, the government is supposed to be a representative of the people. Do the people own the casino anyway? Does it mean we should just play different games in the casino? Change how it's run?
fulltime shooters are the UBI recipients yes, the people own the casino The casino borrows from the shooters who are up at the moment or sometimes just takes their money because they won, how's that for a business plan? It's not so much as who are the other gamblers, it's more like where are the other gamblers? Once you get off the strip there is a big wide world out there. Trip to Vegas should be just a once a year get away, to do your patriotic duty, not a lifestyle.
It would seem that the success of either socialism or capitalism depend on thoughtful implementation. It makes no sense to me to conclude that one is good while the other is bad. Successful countries seem to blend the two "isms" with a good measure of both.
Hm...I assumed with the metaphor that everybody also works at the casino and gets their paycheck from the casino. Other casinos in the world are other countries, and the game is keeping as many gamblers at your casino...
That you are starting to make some sense to me should worry you. Don't the two, production and consumption, have to go hand in hand? I think Keynes told us that in recessions there was excess , unused productive capacity, but insufficient demand. Therefore the logical thing to do was to increase demand, and production, and jobs would follow. But we are not in a recession, we are just in an ordinary, demand limited economy where everyone who can afford them already has two Escalades and BMWs for the kids.