I don't see how they would afford this. Rough approximations show that even giving $20 a month to India's 900 million adult population would mean an annual expenditure of 216 billion dollars, more than 4 times the country's annual defence budget. Where does all this money come from? Increased taxes from the middle class (so that they pay $40 to get $20)?
This is what I point out whenever BI is brought up as a possibility in the US. With 1/4 the population of India, higher GDP, and allowing for all the existing entitlement programs being retired, we can't afford it either. The math just doesn't work out.
Edit: Some grossly simplified numbers.
Assumptions: BI matches poverty level. Everyone gets BI (parents receive their children's payments until they reach majority). Family size is 3 (average household size is really 2.54 persons in the US)
US Population: 312 million, which is 104 million families (households). The Census dept. says poverty level for a family of 3 is $20,000, so that's what BI must match. This gives us annual BI payments of $2.08 trillion.
Savings from shuttered entitlement programs: Medicare, Medicaid, CHIP, ACA subsidies: $938 billion. EITC & CTC: $362 billion. Total savings is $1.3 trillion annually.
But what about Social Security (OASI/DI) with $888 billion in payments? Since that's a pay-it-forward program we can't end it suddenly (it'd be political suicide, in any case). It'd have to be tapered off in some fashion. The trust fund (Al Gore's "Lock Box") doesn't exist as a big pile of money to be tapped, as that has been turned into US-issued Treasury Bonds.
So there's a shortfall of about $810 billion each year. Could we tap into the money sent to the Pentagon? Yes, but that's "only" $610 billion and we'd have a military that isn't being paid and with increasingly obsolete equipment. Not a good situation.
What are you basing that on? I don't buy the idea that America can't afford basic food and shelter for every man woman and child for even a second.
Have you ever thought about how much poverty is negatively affecting the potential future of the US? I suspect the cost to society of children growing up in an environment with constant hunger is much, much larger than the cost of feeding that kid.
What you've just calculated there is the cost of giving everyone, including middle class and rich people, a $20k tax break. Obviously this wouldn't work, as the amount of tax in and out of the system needs to be the same. The easiest method or distribution to understand is negative income tax:
Would it work in real life? Dunno. Lets see what the outcome of the various tests are. The key question isn't the maths actually, but whether people will choose to work enough to support the system.
Kind of thought large scale BI would come as a result of widespread automation of the labor force. This has some good points about potential sources for funding BI, as well as examples of places that have implemented some form of BI (including Alaska), and it's effects on local populations, poverty and personal productivity.
> Raise taxes on the wealthy. It's really that simple.
I'm a big fan of aggressively progressive tax systems but it isn't as simple as you think.
California has a very progressive tax system, with most people paying some but most of the money coming from a small number of taxpayers. Sounds great, and basically most people like it. The problem is that when the economy tanks, California takes a huge hit in income since wealthy taxpayers' capital gains drop precipitously.
Yes, there's a simple-to-describe fix: build a surplus in good times and borrow in downtimes. But this is very hard to implement.
As a proponent of this kind of program, I totally agree that $20k is much higher than we could presently afford. The numbers look substantially more practical at 1/2 or 1/3 that, despite replacing less.
That's actually per family/household. So per-person it'd be a third of that, based on my assumptions.
Something that I haven't heard mentioned is whether BI payments are subject to income tax (like Social Security payments are). The numbers are low enough that the taxman won't take much. Going by the current IRS brackets, and assuming they had no other income (worst-case scenario), the per-person yearly payments of $6,666 would mean a 10% cut, leaving $6,000, or $500 a month. Which is a little more than what people spend at the supermarket.
> What we really need is universal, single payer health care.
Why does it need to be single payer? Multi-payer systems can achieve universal or near universal coverage at good costs. See, for example, Germany or Japan.
The money comes from sacrificing existing entitlement programs, which might actually cost more.
Think about it like this in the US: Imagine giving everybody a basic income and eliminating minimum wage, social security, medicare, welfare, and so forth...
Naturally some people would become wealthier (paying down existing debts) and some people would become poorer (spending money more rapidly and increasing their debt burden), but these are personal decisions.
> Think about it like this in the US: Imagine giving everybody a basic income and eliminating minimum wage, social security, medicare, welfare, and so forth...
What happens when someone inevitably spends their entire income on non-essential expenses, or bets it all on black, or gets talked into making a bad investment, leaving them with no money in the bank? Do we just tell them, "well, suck it up and get a job"? "Sorry, you can't feed yourself because you made your choice on how to spend your money"?
Replacing all other entitlement programs with a cash handout is a political non-starter.
>Do we just tell them, "well, suck it up and get a job"?
Most entitlement programs in the United States are based on the poverty line. Currently that number is $11,770 for an individual. Working 40 hours a week you'd receive $15,080. Thus a great many working individuals simply do not qualify for much government assistance already as they not only receive more than minimum wage but they also work more than 40 hours a week.
My point is the way the system is currently designed punishes the working poor who have managed to make a life for themselves and rewards those with part time jobs, many of whom have chosen to not do so. If framed in this way I estimate that this would not only be politically viable but the party who proposed it would win in a landslide.
So you are taking money out of social security and medicare which currently people earned (you return is somewhat proportional to how much taxes you paid) into a general pool? In that case, we should start applying FICA taxes on investment income also then because then it is a general tax.
I would think that medicare becomes a sort of single-payer system; you get the same Basic Income and the costs of the insurance come from the pool.
I do think that some aspects of our tax system could be reworked. Creating a wealth tax and removing income and other redundant taxes seems to be a popular idea[1]
You can raise income taxes on the employed pay for UBI for the unemployed. Therefore, the cost would only be $20 * India's unemployed adult population, which is a lot less than 900 million.
How would you even define unemployed in a vast part of India? There is quite an bit of informal economy. I think >94% don't even file income taxes (either too low an income or don't declare.)
I don't need to define it though. India has non-zero tax revenue. It can raise that revenue somehow (to claim otherwise would be bold and would require evidence). And some individuals will have a tax liability greater than the level of basic income.
If basic income is X, some of the individuals receiving it will have a tax liability >= X. All legitimate UBI proposals I've ever heard share this property. It's either that, or the government finances the entire UBI with a budget deficit. And no one is seriously proposing that.
There's also minimum guaranteed income... which guarantees that Earned Income + Basic Income - Tax Liability >= Minimum Guaranteed Income, for all individuals. That's a stronger proposal. We should really aim for this.
But I don't think implementing UBI means that everyone is better off the next day. Some people's post-tax income will stay the same or go down.
Another question: do UBI and income tax go together? It would be interesting to see proposals that provide UBI but eliminate income tax, replacing it with some other kind of tax.
I initially interpreted the parent to say that employed people don't receive UBI. If they do, it is in fact a UBI but then does not get around the cost issue (I comment about that on a sub thread).
Absolutely it does get around the cost issue. Someone with no income receives just a UBI. They cost the system $20. Someone with non-zero income recives both a UBI and a higher income tax burden. What net impact does that individual have on the cost of the system? If their income is greater than the UBI... the impact might be zero, or negative.
Assuming a 40% tax (no idea what it would actually be in practice), everyone earning less than $50 a month would be a net cost.
As a thought experiment, imagine that you increased the UBI payments so that they took up all the gross income of the country. Now your tax rates are 100%, even though the "net impact" of the redistribution is 0. A smaller UBI is the same concept, just the percent of income distributed is smaller. The bigger the UBI, the larger your tax rates on all workers. As those tax rates reduce the supply of labour, the costs mount even more.
The OP is suggesting that taxes on the employed go up by >= $20 at the same time that they receive a check for $20. No net benefit for the employed while they are employed, but the checks keep coming even if employment stops.
Ok, but that's still increasing marginal rates even if you ignore the unemployed. Consider the case where you have 100 people, one that earns $1/week, one that earns $2/week, etc. and the last person earns $100/week.
A $20/week UBI for all of them would cost $2000/week. You would need a flat tax of 39.6% on everyone to cover that. So everyone's marginal tax rate increases, with the associated deadweight losses.
tldr; you can't just hand wave and say a redistributional tax scheme is free since it all balances out across the population.
No one even came close to suggesting that a redistributional tax scheme is free.
But interestingly: basic income provides more benefits with as income inequality goes up. That is, if everyone in society already has the same level of income, there would be no way to finance basic income through income tax. You would collect the same amount of tax from every person and then give it right back to them. However, in your hypothetical distribution, that one person at the top is singlehandedly providing the basic income of 2% of the population. And we are using your proposed very fair taxation scheme of flat tax. And in reality, income distributions are far more skewed than your hypothetical distribution.
Great-grandparent comment implied the only cost you need to consider is for unemployed people i.e. that it's free for those who are employed . That's wrong.
That's not at all what the great-grandparent comment said. It was talking about the aggregate cost of the entire system. And the great-great-grandparent was wondering "just where is the money going to come from?" but fundamentally it's not a problem. As long as the total basic income of a country is less than the total income of a country, the latter can be redistributed into the former.
By this argument, if the basic income == the total income of a country, there is still no aggregate cost. Maybe, but I'd argue that such a system would come with huge costs due to the massive increase in taxation.
Plus at societal scale "wealth" doesn't necessarily work the way it does at the personal level. I can go to the gas pump and buy as much gas as I could personally want at the price posted on the sign. You'll find that if you stepped out and tried to buy ten billion gallons of gas at that price that the situation will change in numerous ways. Confiscating the "wealth" of the rich and trying to use it to buy things that nobody is even making right now is not something you can casually assume will work; the economy itself will need time to adjust before it could even supply the desired goods at such a different scale.
The point here being not that it's impossible, or even undesirable, but merely that naively taking stock of what "the wealthy" have by current measures and assuming you can confiscate arbitrary amounts of it and use it to buy arbitrary amounts of consumer goods without having to account for any of the prices of the goods involved in that operation changing in the process isn't effective.
You gotta be careful of the Laffer Curve[0] though. Tap into the rich too much and they'll leave. Make it illegal to leave... well, your country is going downhill fast.
The exact value is near impossible to pinpoint, but you can find it by gradient methods. One thing for certain is that it's lower than the rate I currently pay. ;-)
the laffer curve and supply side economics is junk/propoganda masquerading as economics. It's about as real as the scientific studies exxon releases against global warming.
After the recent Demonetization brouhaha, which led to over a 100 deaths[1], most of them from the lower strata of society, it makes sense for the current government to start off UBI whole heartedly, especially since they can tie in the entire demonetization/cashless economy/jan dhan etc. stories together. However, I sincerely hope that the execution is well planned, rather than hasty.
This article though seems to be a marketing report for BIEN. Remember that with a country as large as India, Government reports are many in number but very few schemes having national level adoption. I can think of numerous states that would support doling out sops for the poor instead of UBI.
Interesting times these are for the country. Let's hope sense prevails.
I'll take liberty to correct your perspective: A demonetization move that directly affected livelihood of billion Indians, with a possibility of large-scale riots, but ended with only 100 deaths. I don't see how it cannot be termed a success. Can you think of any major move that directly affected the entire country but did not end in large scale riots? If you need to understand what a "hasty decision" means take a look at the Partition of India, where only a small fraction of the entire populace was displaced but ended up causing up almost 2 million deaths by some estimates.
Your metric for success seems to be "not enough people died relative to previous such moves, hence its a success", which is rather morbid.
Also your point about "major move that directly affected the entire country but did not end in large scale riots" is vague in its definition of "major move". During the partition, people were forced to leave their homes, belongings, ALL material wealth in the name of religion/politics/whatever and move to a different location in fear for their lives and the lives of their loved ones.
Does demonetization compare to this?
During demonetization, among other things, all the honest Indian had to do was wait in long queues to exchange cash (which is not convenient by all means - its very very harrowing), and the dishonest Indian figured out how to convert their cash to the new currency through the black market.
We can debate about the pros and (many many more) cons about demonetization, but thats another topic. Overall, India today is very different from the India 70 years ago when the partition took place, so I disagree with your comparison as well as your metric for success.
> Your metric for success seems to be "not enough people died relative to previous such moves, hence its a success", which is rather morbid.
Why is it "morbid"? Did you call out the OP for associating the death of a 100 people due to an economic move like demonetization morbid? If not, then why am I being singled out? Just because my opinion doesn't fit your narrative?
> Also your point about "major move that directly affected the entire country but did not end in large scale riots" is vague in its definition of "major move". During the partition, people were forced to leave their homes, belongings, ALL material wealth in the name of religion/politics/whatever and move to a different location in fear for their lives and the lives of their loved ones.
Does demonetization compare to this?
Yes it does. Because the OP was talking about "implementation" of the move and not about "intent". The displacement of people during the Partition was of a small percentage of the entire populace. Yet it was not managed properly at all. Did it not result in the death of close to 2 million people by some estimates? Or is the death of 2 million people due to Partition not as morbid as the death of 100 people due to demonetization?
According to me, demonetization should have resulted in large-scale riots. Even the Supreme Court of India concurred: http://www.hindustantimes.com/india-news/demonetisation-sc-q.... In other countries where demonetization took place there were large scale riots and huge political instability. Read up on Myanmar demonetization which led to large-scale riots leaving thousands of people dead.
The very fact it did not end in large-scale riots leads me to believe that it was a success. Whether there are any long term benefits to the move economically remains to be seen.
> During demonetization, among other things, all the honest Indian had to do was wait in long queues to exchange cash (which is not convenient by all means - its very very harrowing), and the dishonest Indian figured out how to convert their cash to the new currency through the black market.
And most of those converting their cash were caught and the rest are still being caught. Did you fail to read the news?
> "Why is it "morbid"? Did you call out the OP for associating the death of a 100 people due to an economic move like demonetization morbid?"
I call it morbid because "not enough people died hence its a success" is a bad argument. What is your cutoff for the number of people to have died for it to have become a failure? How do you arrive at that cutoff?
> "The displacement of people during the Partition was of a small percentage of the entire populace. Yet it was not managed properly at all"
Yes a relatively smaller percentage than demonetization (but not small by any means). Furthermore, less people were affected by partition but the impact to those affected was much higher. In demonetization, more people were affected but the average impact to those affected was much lower. They might even be the same area under the curve in terms of suffering. But how do we quantify that? Simply saying that "less people were affected yet more people died during partition in contrast to demonetization where more people are affected but less people died" is an incomplete argument. More people are affected by the poor air quality of New Delhi but less people die because of it than the partition, does that mean that the air quality measures that the government has taken (banning unleaded fuel etc.) is a success?
> "And most of those converting their cash were caught and the rest are still being caught. Did you fail to read the news?"
Survivorship bias. You only hear of the ones that got caught. There are so many that got away scot-free.
Also, do you always believe or agree with what the Supreme court says or recommends? How do you feel about the mandatory standing for the national anthem before any movie? Should that be something that the state should enforce? Hitler made it mandatory for civilians to perform the Nazi salute towards him.
> I call it morbid because "not enough people died hence its a success" is a bad argument. What is your cutoff for the number of people to have died for it to have become a failure? How do you arrive at that cutoff?
The cutoff was not given by me. It was given by the nay-sayers including the Supreme Court of India. Who speculated "financial emergency" and "large-scale riots"? Was it people who supported demonetization or those who opposed?
> Yes a relatively smaller percentage than demonetization (but not small by any means). Furthermore, less people were affected by partition but the impact to those affected was much higher. In demonetization, more people were affected but the average impact to those affected was much lower. They might even be the same area under the curve in terms of suffering. But how do we quantify that? Simply saying that "less people were affected yet more people died during partition in contrast to demonetization where more people are affected but less people died" is an incomplete argument. More people are affected by the poor air quality of New Delhi but less people die because of it than the partition, does that mean that the air quality measures that the government has taken (banning unleaded fuel etc.) is a success?
But you are again trying to tie an economic move like demonetization with something inherently negative: pollution. How does pollution compare to the Partition or Demonetization? How does that analogy even make any sense? We are talking about "implementation" of "intent". I gave comparison of Partition because the Partition of India was an "intent" in the same way that the demonetization was an "intent". The "implementation" of the "intent" failed with Partition but not with demonetization. How do I quantify that? See the demonetization exercises carried out by 6 countries before India. It was bloody and ended in either coups d'état or large-scale riots. Both did not happen in India.
> Survivorship bias. You only hear of the ones that got caught. There are so many that got away scot-free.
You are in the realm of speculation here. It is for you to prove that "so many go away scot-free".
> Also, do you always believe or agree with what the Supreme court says or recommends? How do you feel about the mandatory standing for the national anthem before any movie? Should that be something that the state should enforce? Hitler made it mandatory for civilians to perform the Nazi salute towards him.
I agree with mandatory standing for National Anthem irrespective of whether it is before any movie or in any public place. Now you taking it to the other extreme of comparing standing for National Anthem to that of Nazi salute is completely uncalled for. Are you actually comparing Nazi ideology with upholding the Constitution of India? The Supreme Court only upheld the Articles of the Constitution. Read the order of the Court. This is not some Nazi diktat. Please widen your perspective.
Yet you used that data point to call the move a categorical success.
> But you are again trying to tie an economic move like demonetization with something inherently negative
No, I'm not trying to tie anything. I'm just trying to make you understand the fallacy that might have inadvertently crept into your reasoning (happens to the best of us!) Also I'm not comparing demonetization to pollution, I'm comparing the policy of demonetization to the policy response against pollution. Or to make it even simpler, I'm comparing the government policy to curb corruption to government policy to curb pollution, or the government policy to prevent deaths during the partition. Just because one policy response led to more deaths than another, doesn't mean that the former response wasn't as flawed as the latter. Especially since there are so many differences between the initial conditions that existed during the partition and the conditions that exist today. I will repeat here that simply saying that "less people were affected yet more people died during partition in contrast to demonetization where more people are affected but less people died" is an incomplete argument. Apples and oranges my friend.
> You are in the realm of speculation here
Unfortunately not. Will this data ever be publicly available? No. Did a black market exist? Most definitely.
> Are you actually comparing Nazi ideology with upholding the Constitution of India?
What if I don't agree with some of the articles of the constitution? Can I exercise my free speech rights to criticize the said articles without being charged with sedition? Can I express those free speech rights by not standing up for the national anthem and not be charged for an offence? Unfortunately not. I am being instructed by legislation to sit or stand or perform some other body movement to uphold the legitimacy of a document, or an ideology, which I may or may not agree with. That was true for the Nazi salute as well. There are very very subtle points that deal with things like burning the national flag and not "respecting" the national anthem. I urge you to check out the first amendment of the american constition and US supreme court rulings regarding their national anthem and national flag and what constitutes disrespect and what constitutes a criminal offence. Its fascinating stuff. The Indian constitution and the our Supreme court have a long way to go!
Anyway, time to get on with my life. Do definitely read up on the First amendment and try comparing that with the free speech as guaranteed by the Indian constitution. Its a good perspective to have.
> Yet you used that data point to call the move a categorical success.
No I did not. I only countered a point that was made by the OP who said demonetization was a failure because 100 people died by citing a point that the Opposition parties in India made during the demonetization phase (about large-scale riots).
> No, I'm not trying to tie anything. I'm just trying to make you understand the fallacy that might have inadvertently crept into your reasoning (happens to the best of us!) Also I'm not comparing demonetization to pollution, I'm comparing the policy of demonetization to the policy response against pollution. Or to make it even simpler, I'm comparing the government policy to curb corruption to government policy to curb pollution, or the government policy to prevent deaths during the partition. Just because one policy response led to more deaths than another, doesn't mean that the former response wasn't as flawed as the latter. Especially since there are so many differences between the initial conditions that existed during the partition and the conditions that exist today. I will repeat here that simply saying that "less people were affected yet more people died during partition in contrast to demonetization where more people are affected but less people died" is an incomplete argument. Apples and oranges my friend.
So you can explain this to the OP of the post who said that demonetization was a failure because 100 people had died. Do you now understand why I'm countering this specific point? Because it makes no sense to compare an economic move with deaths. Apples and oranges indeed.
> Unfortunately not. Will this data ever be publicly available? No. Did a black market exist? Most definitely.
Of course it will be. You are assuming that the RBI will not publish data on remonetization. You are also assuming that the Income Tax department automatically accepts every deposit made between November 8th and December 31st as white money without conducting an audit. In fact, I'll argue that it has become so much more easier now for the Government to easily audit deposits as they have entered the formal system to catch evaders and bring them to book than to go after those who had hoards of cash stacked in their secret lockers.
> What if I don't agree with some of the articles of the constitution? Can I exercise my free speech rights to criticize the said articles without being charged with sedition?
You have already done it.
> Can I express those free speech rights by not standing up for the national anthem and not be charged for an offence?
If you are in India you are duty bound to stand. It is part of fundamental duties of every citizen of India. If you don't like it you can give up your Indian citizenship and adopt citizenship of another country.
> I am being instructed by legislation to sit or stand or perform some other body movement to uphold the legitimacy of a document, or an ideology, which I may or may not agree with. That was true for the Nazi salute as well.
No both are different. When you sit or stand, you do it for the concept of India and not for an ideology. The Nazi salute was a salute for an ideology that only catered to one section of society. The Constitution of India has a place for all except those who question the very ethos of India's existence. If you do not agree with the legitimacy of document you have no business accepting citizenship under the very document. That is highly hypocritical don't you think?
> There are very very subtle points that deal with things like burning the national flag and not "respecting" the national anthem. I urge you to check out the first amendment of the american constition and US supreme court rulings regarding their national anthem and national flag and what constitutes disrespect and what constitutes a criminal offence. Its fascinating stuff. The Indian constitution and the our Supreme court have a long way to go!
No we don't have a long way to go. India is a Sovereign Nation. Just because the US has a particular constitution doesn't mean we need to adopt the same. Would you be happy if we adopted the Second Amendment as well? It's ridiculous to compare constitutions. These are documents that are made based on historical as well as cultural differences. The United States is not as diverse as India. It's constitution would wreak havoc in an already fragile Indian society.
You're incredibly rude, short sighted, and all your huffing and puffing amounts to is a poor utilitarian defense of a horribly executed demonetization.
Sorry to be brash, but I'm appalled at your behavior and I'm about to walk into work so there's no time to dance around the facts.
Ok so now my "behavior" is under question with my statements being called "morbid", "rude", "short sighted", "huffing and puffing". Is it because I have a contrary opinion to yours? I fail to understand how my comments are "rude" when it's very apparent that you are the one being rude here (and you admit it yourself: "Sorry to be brash").
> "I'm about to walk into work so there's no time to dance around the facts"
I wasn't expecting a factual rebuttal after you called me "rude, short sighted" and "huffing and puffing" anyways.
I'll take liberty to correct your perspective: A demonetization move that directly affected livelihood of billion Indians, but we don't know whether for good or for worse. I don't like Mr Modi, but I was cautiously optimistic the day it was announced. However over last two months, its been clear to me that no thought was put in the decision.
Then I'll take the liberty to correct your understanding of my comment:
I spoke about: a move that directly affected livelihood of billion Indians, "with a possibility of large-scale riots". Since those large-scale riots did not happen it can be termed a success. Why am I talking about "large-scale riots"? Because the Opposition (even the Supreme Court of India) predicted large-scale riots: http://www.merinews.com/mobile/article/India/2016/11/22/note...
"Supreme Court says situation after demonetisation serious, fears riots":
Perhaps you are not in or have not been to India. Even minor situation can lead to deadly violence there. Associating those 100 deaths to demonetization is absolutely pushing a political agenda by media.
Check how death of popular politicians can lead to 100s of ppl committing suicides in India. Or check how 1000s die every year in train accidents in just one city of Mumbai.
The sad part is even most Indians I meet in US are mostly clueless about conditions of masses. They remain preoccupied with food/bollywood/cricket etc.
The criterion for success for an economic intervention cannot be "riots didn't happen." The only word for this reasoning is absurd.
I'm not sure where the rest of your argument is going. You seem to be saying that Indian lives are cheap anyway.
The declared criteria for the success of demonetisation has shifted twice so far. It started as "we'll stop corruption", then it was "we'll go cashless" and now it's "we've converted cash saved at home to cheap loans". But even the BJP has never claimed that it was "this will not cause riots".
I do not see any contradiction in pursuing all of them together: stopping corruption", "going cashless", "cash saved at home to cheap loans". And corruption is not something that a single step or policy can fix. It would be rather stupid of government or politicians to put all effort on a single goal.
It seems to me critics show a deep disconnect with people when they claim failure due to inconvenience to people. In India riots can occur on far minor issues than demonetization. So yes people are willing to wait for results but critics are hastily jumping to conclusion that scheme has failed.
I am serious. If you live in India you would have heard of constant fear-mongering by the opposition parties about "large-scale riots" and "financial emergency". No such thing happened. Every Indian co-operated with the move. This is unlike any other demonetization that was carried out previously by 6 other countries which either lead to coup d'état or large-scale riots.
Also, is the only counter one can come up with for an economic move is talk about "death of 100 people"? Seriously? In a populace of a billion the death of 100 people for such a huge economic move is close to nothing.
This is a no-true-scotsman argument. I am Indian. I was forced to co-operate with the move because of being an ordinary citizen. I had no choice but to go along.
Then I'm thankful that you did not riot. Irrespective of your political inclinations.
On a lighter note, the "large-scale riot" theory was not propagated by the Government but by the opposition. Read up articles by P Chidambaram and you'll know what I mean. So don't hold us guilty for using that term :)
Of course I did not riot. I don't want to go to jail. That does not mean that I _co-operated_ with the move.
Explain to me again how the move was a success. You are assuming a priori that it was a good decision as long as riots don't happen, which they didn't, hence it was good. But why was it good regardless of riots/no riots? I don't see how. So a few hundred crores of black money were caught in raids. That is a drop in the ocean. A hundred times more than that is caught in regular tax raids every year.* It has done absolutely nothing to curb future corruption. What it has done for sure is to reduce spending everywhere and cut down on industrial production and employment.
You are welcome to believe it was successful, just like I believe it was a disaster. We'll find out at some point.
"Countrywide Rs 242 crore in new currency and jewellery worth Rs 15 crore has been seized. The amount is not abnormally high, as I-T sleuths annually unearth Rs 10,500 crore to Rs 11,000 crore in undisclosed income."
Because you are confusing demonetization with remonetization and post-remonetization. All are different. Demonetization ended on December 31st. The move was a success as no riots or coups took place. Why should I take that factor to gauge success? If you look at the history of demonetization, with the exception of Britain, 5 other countries either had large-scale riots or the Government's fell due to coups. The remonetization phase did not even commence and in some instances demonetization was also rolled back. Demonetization is just declaring currency as no longer legal tender. It has nothing to do with implementation or the after-effects. The actual implementation of replenishing cash is called "remonetization" and post-remonetization is the real impact.
Now is remonetization a success? What about post-remonetization? Only the RBI final report as well as Income Tax assessment of those deposits made during November 8th to December 31st will be able to explain. This will take some time to come out. You are assuming that all money deposited in the banks are automatically converted to white. That is where your assumptions are wrong. The Tax authorities have already started auditing these deposits and are actively catching culprits who deposited huge amount of cash during the remonetization phase (see Mayawati's brother as well as her party being investigated for depositing 104+ crores). They'll start with the big fish and then catch the smaller fish.
> So a few hundred crores of black money were caught in raids. That is a drop in the ocean. A hundred times more than that is caught in regular tax raids every year.* It has done absolutely nothing to curb future corruption.
You are assuming that this is the be-all and end-all of this scheme. You are assuming that the Income Tax authorities won't look at and audit the deposits made in the banks when you declared that "It has done absolutely nothing to curb future corruption".
It's not a stat for me. I do sympathize. But stretching this argument to say that demonetization is a failure is ridiculous. In that way, in India, the deaths due to accidents are close to 1,37,000 in 2013 alone. Should we call transportation a failure and put a halt to every mode of transportation (be it autos, cars, buses, trains, planes etc) just because of this statistic or should we work towards improving the system?
I compared demonetization carried out by India with demonetization carried out by other countries. When I see that there were large-scale riots and coup d'état in other countries but no such thing happened in India I will definitely take this as a success. You want to have a narrow negative perspective of 100 people dying you can continue to have that. I have a wider positive perspective that no large-scale riots or coup d'état happened that would have sent the Indian economy in a downward spiral or worse: civil war.
"Should we call transportation a failure and put a halt to every mode of transportation (be it autos, cars, buses, trains, planes etc) just because of this statistic or should we work towards improving the system?"
Are you actually comparing currency to transportation ? People have a choice in the mode of transport. Your villager however can't use bitcoins because his Rs.500 note isn't legal tender.
"I have a wider positive perspective that no large-scale riots or coup d'état happened that would have sent the Indian economy in a downward spiral or worse: civil war."
Your standards for a successful policy are shockingly low. And stop lying, you have no sympathy, you just called a 100 deaths as having a "narrow perspective".
Do you also disagree with the countless economists that have criticized the move based on theory and facts. Or is that "foreign propaganda" for you ?
> Do you also disagree with the countless economists that have criticized the move based on theory and facts. Or is that "foreign propaganda" for you ?
I definitely disagree with the "countless economists" mainly because economists love status-quo and despise disruption. We had "countless economists" say that the Telecom revolution in the 1990's was a big burden on Indian exchequer and a waste of resources. Today every Indian is thankful for the Telecom revolution and the introduction of computing as it created huge job opportunities. Economists have their place. They are not policy pundits. We had possibly the best economist in India as the Prime Minister for 10 years. He failed miserably in implementing any policy decision (including his party's own pet projects) leading to policy paralysis. Read about him here: http://timesofindia.indiatimes.com/india/Time-magazine-dubs-...
> Are you actually comparing currency to transportation ? People have a choice in the mode of transport. Your villager however can't use bitcoins because his Rs.500 note isn't legal tender.
It doesn't matter the choice of transport if you are dying in huge numbers: 1,37,000 accidents in just 1 year.
> Your villager however can't use bitcoins because his Rs.500 note isn't legal tender.
This shows your absolute lack of ground knowledge about India. Why should a villager use bitcoins when he can use PayTM wallets or even BHIM app (using Unified Payment Interface) that was introduced by the Indian government. Read about it here: http://indiatoday.intoday.in/story/paytm-on-boards-small-mer...
> Your standards for a successful policy are shockingly low. And stop lying, you have no sympathy, you just called a 100 deaths as having a "narrow perspective".
From your comment it is quite clear that you don't live in India. So stop acting like a know-it-all. I live in India and I can differentiate between propaganda and reality.
Do you really think people will install and use PayTm apps overnight in villages ?. Was there any research done on mobile literacy or making things easier in rural areas ?
Also, you wish to ignore facts and reasoning posted by economists all in the name of "disruption". And FYI The Planning Commission of India AKA "Policy Pundits" consists of renowned economists.
Mobile literacy? Was such a research done before the Mobile and Telecom revolution? Spare me your ignorance please.
Forget the Planning Commission of India, we have had the worst experience with a Prime Minister, who was an Economist, and had no spine to take on the corrupt or even implement his own policies. India practically lost 10 years of it's growth to this useless economist. So no please, we don't need more economists. We have more than enough Economists. We need someone who can take tough policy decisions.
Yes and I already acknowledged it when I said he was "possibly the best economist India had". How did I qualify he was "the best economist"? Because of his reforms in the 90s which were spearheaded by the then Prime Minister Narasimha Rao. Would he have been able to conduct the same reforms if he was the Prime Minister instead of Narasimha Rao? Never.
As I said earlier, economists have a place. He was great as a Finance Minister and RBI Governor. But the moment he became a policy decision maker (rather than just a policy maker) he failed miserably. Do you understand this basic difference? This is the reason I say that economists cannot take policy decisions. They can make the right policies if they are dictated by someone higher up the chain but are incapable to take the same decisions if they are given a chance.
The evidence for that is the GST reform. GST was the brainchild of Manmohan Singh and his Planning Commission when he was the Prime Minister for 10 years. But he failed to get the damn reform passed in the Indian Parliament mainly because he did not know or understand political maneuvering. How is it that the same GST reform, which was Manmohan's brainchild, passed by Narendra Modi (who is his opponent) without any troubles?
If not, the last few days of pounding payment in Jodhpur trying to find working ATMs, and being stuck for 30m in queues when they finally got their money delivered all seems in vain. That, and, you know, the 100 deaths.
Yes it has. It depends again on your perspective. Looks like you have only read news of 100 deaths but failed to read news of the many political babus, black money hoarders and tax evaders getting caught with huge amounts of cash (with both old and new notes).
It would be helpful if you cited your sources for this. From what I've seen and read, most people found a way to launder their black money through brokers. [2] That's not just speculation, most of the 17 trn rupees of cash has found its way back into legal channels. [1]
You were also very cavalier about the downsides of this move. Yes, those 100 deaths are a loss, but far more people were affected. Many did not have any money for a month or more because their employers did not have cash to pay them. There were 8 million affected workers in the beedi industry alone, more in other sectors. These are daily wage labourers, remember. [2]
Many farmers were forced to sell their crops for pittances to make ends meet. One example is cauliflower being sold for ₹ 1/kg. Its usually sold at ₹ 12. The prices of soyabeans was down by 77% [2]
Judging by your comments on this thread, you neither know nor care about this. You speak as if the only downside to this entire affair was 100 people dying, all the while citing 0 sources.
> Judging by your comments on this thread, you neither know nor care about this. You speak as if the only downside to this entire affair was 100 people dying, all the while citing 0 sources.
No I care about it. But the problem is that most of them did not cite sources and were rhetorical. So I had to reply back in rhetoric. Since you cite sources I'll reply with sources too:
"It would be helpful if you cited your sources for this. From what I've seen and read, most people found a way to launder their black money through brokers. [2] That's not just speculation, most of the 17 trn rupees of cash has found its way back into legal channels. [1]"
Always refer to RBI bulletins and press releases. Don't believe motivated reports.
> You were also very cavalier about the downsides of this move. Yes, those 100 deaths are a loss, but far more people were affected. Many did not have any money for a month or more because their employers did not have cash to pay them. There were 8 million affected workers in the beedi industry alone, more in other sectors. These are daily wage labourers, remember. [2]
Why are these daily wage laborers not paid through cheques or wire transfer? The Government of India already has a "Jan Dhan Yojana" which is a simple form that facilitates opening of bank accounts (along with e-banking facilities) for lower income groups without going through any hurdles (all you need is an Aadhar card to open the account). In fact, even the employers can do it for their laborers on their behalf (I have already done it for my maid servant). The real story is that the employers wanted to pay cash so they can fudge their Book of Accounts with a higher entry and claim tax deductions. There was no real-world transaction to back their claims and the Income Tax department had to take them at face value.
> Many farmers were forced to sell their crops for pittances to make ends meet. One example is cauliflower being sold for ₹ 1/kg. Its usually sold at ₹ 12. The prices of soyabeans was down by 77% [2]
I definitely sympathize with farmers. However, this is a short-term impact. Many of these farmers are adopting digital payments (PayTM, BHIM app etc) to transact and the Government is conducting camps educating farmers on digital payments. I recently bought bananas from a street vendor (who sell on carts and don't have a proper outlet) by paying through PayTM. You just need to wait for the long-term impact of this policy to play out.
I hate to break this to you, but most people don't actually have bank accounts, and if they do, they don't know how to use them. Most of those bank accounts that were opened in the Jan Dhan Yojana scheme have ₹1 ($0.015) or less in them [1].
These laborers mentioned in the article I linked did not have accounts which they could use. That's why they threatened to strike if they weren't paid in cash. You live in a bubble if you think lower income groups are rapidly adopting digital payments. Sure, the help at your place did, but I've met many people living in the heart of Bangalore who can't afford a smartphone. These same people also don't have a bank account. Or who knows, maybe they have a 0 balance account in their name somewhere.
Its quite easy to talk of "short-term impact" and "long-term gain" when you're not facing any of the short-term impact yourself. I doubt you or your family went to bed hungry on any day during November and December. Millions of Indian families did, while they didn't have to. This could have been executed better.
Lastly, you're citing an article from December 2nd to prove that a lot of money that was outstanding on Nov 8th hasn't been collected. I linked one from January 4th. Which do you think has more up-to-date data?
> Its quite easy to talk of "short-term impact" and "long-term gain" when you're not facing any of the short-term impact yourself. I doubt you or your family went to bed hungry on any day during November and December. Millions of Indian families did, while they didn't have to. This could have been executed better.
Maybe not in November or December. But definitely in the past. But I did not and still do not hold any Government's policy decision accountable for my past situations. What I always look for is disruptions to existing systems. It doesn't matter who conducts these disruptions as long as it is done. These are very much necessary. For example, my father always says how lucky I'm that I now have access to computers and internet and he did not have any such facilities during his time. However, I realize that whatever I have today would not have been possible if not for bold reforms of the 1990s. Today I understand the necessity for disruptions. The longer you delay necessary disruptions the more hardship you create for future generations because innovations don't wait for you to catch-up.
> Lastly, you're citing an article from December 2nd to prove that a lot of money that was outstanding on Nov 8th hasn't been collected. I linked one from January 4th. Which do you think has more up-to-date data?
Your Jan 4th article has no data on the amount of money deposited. My advise to you is to go back and re-read that article. RBI has still not released the latest data. The last release was on December 13th. Articles written after that are just here-say and speculation.
> I hate to break this to you, but most people don't actually have bank accounts, and if they do, they don't know how to use them. Most of those bank accounts that were opened in the Jan Dhan Yojana scheme have ₹1 ($0.015) or less in them [1].
That is not the Government's problem. The Government had already instructed owners of private and public companies to open Jan Dhan accounts for their laborers. The owners either failed to do it or purposefully chose not to open accounts to evade tax. Now they have no choice but to open for them.
> These laborers mentioned in the article I linked did not have accounts which they could use. That's why they threatened to strike if they weren't paid in cash.
In my comment in the previous reply I already mentioned that they did not have because the companies failed to open accounts for them. Don't skip reading my comments please. I can't answer the same point again and again.
> You live in a bubble if you think lower income groups are rapidly adopting digital payments. Sure, the help at your place did, but I've met many people living in the heart of Bangalore who can't afford a smartphone. These same people also don't have a bank account. Or who knows, maybe they have a 0 balance account in their name somewhere.
That is no excuse for not moving to digital payments. The same excuse was cited in the 1990's when the computer and telecom revolution was taking place in India. People were comfortable with typewriters and found computers intimidating. Today you find most of the workforce quite comfortable with computers. Even with telecom revolution the biggest beneficiaries were the lower income groups. They completely skipped fixed line telephony and moved straight to mobile phones. I agree with you that many find digital payments intimidating and many don't have smartphones but they have no choice but to adopt it now because of disruption in informal economy. You are on Hacker News. You should know better what is the outcome of disruption. There will always be a short-term negative impact followed by a long-term positive impact.
> a possibility of large-scale riots, but ended with only 100 deaths. I don't see how it cannot be termed a success.
What is the upside we got with demonetization that we can call success?
Did it end black money? No.
Will it end counterfeit currency? No.
Does it help citizens in any way? No.
Then what exactly is the success we achieved here?
Modi have blood of 100 citizens on his hands this time instead of thousands like it was in Gujarat riots under his leadership. Is that the benchmark of success?
It has reduced black money significantly. Especially for terrorist and militant groups - both Pakistan sponsored and home grown Naxalites. They are now being forced to raid banks for new cash. The new notes are also much more difficult to counterfeit. That's two points crossed in your list.
> Did it end black money? No.
> Will it end counterfeit currency? No.
> Does it help citizens in any way? No.
70% of those polled (average of all polls conducted by media and independent media houses) disagree with you. I, as a Free Citizen of India, disagree with you.
You fail to mention about all those getting caught with counterfeit currency and black money and still continue to be caught. Are those the figments of my imagination? Or are you only seeing one side of the coin? The side that suits your narrative?
> Then what exactly is the success we achieved here? Modi have blood of 100 citizens on his hands this time instead of thousands like it was in Gujarat riots under his leadership. Is that the benchmark of success?
This is a ridiculous and a very weak argument to counter an economic move. I'm sorry that you are incapable of understanding a perspective beyond the deaths of 100 people.
> 70% of those polled (average of all polls conducted by media and independent media houses) disagree with you.
We measure success or failure of such economic policies with statistics, not by political opinion polling.
> You fail to mention about all those getting caught with counterfeit currency and black money and still continue to be caught.
They have been conducting raids to catch black money hoarders and counterfeit currency forever. They have escalated it recently, but it could have been done without demonetization as well.
> I'm sorry that you are incapable of understanding a perspective beyond the deaths of 100 people.
What benefit did we get out this whole scheme?
My family have personally suffered significant monetary loss on our 100% tax paid cash, and suffered significant loss in business because of this chaos.
Millions of citizens have hard time feeding their family because of this jumla.
We measure success or failure of such economic policies with statistics, not by political opinion polling - Yes. Hence we need to check the data to see if worked instead of picking political points like blood of citizens or Gujarat riots.
Over 100 people have died due to demonetization scam[1]. It is not an opinion, they are not even just facts and statistics, 100 real people have died and their families have been destroyed. Let that sink in.
[1] Modi ji gave immunity to Politicians, so Political parties can deposit unlimited amount of cash tax free. I thought demonetization was a scheme, but it turns out it is a major scam.
> We measure success or failure of such economic policies with statistics, not by political opinion polling.
You can't go by statistics in an economic move like demonetization this early. The move itself is done keeping in mind the long term impact. 70% of those polled understand that and hence keep an open-mind.
> They have been conducting raids to catch black money hoarders and counterfeit currency forever. They have escalated it recently, but it could have been done without demonetization as well.
The reason it has escalated is because of demonetization. It wouldn't have been possible without it. There would be no way for the Government to track cash to catch these hoarders/evaders.
> What benefit did we get out this whole scheme?
These are the two benefits I directly get from this scheme:
1. Home loans reduced by 90 basis points (and will continue to reduce).
2. Property prices have dropped and will continue to drop significantly as most of the property transactions happened in black.
There are many other benefits but they don't directly affect me (like 10 year fixed rate of interest for senior citizens, 6000 rupees for pregnant women, moving of people from informal economy to formal economy etc). But these two benefits are more than enough to resonably change my lifestyle.
> My family have personally suffered significant monetary loss on our 100% tax paid cash, and suffered significant loss in business because of this chaos.
Millions of citizens have hard time feeding their family because of this jumla.
What kind of business is your family in that caused "personally suffered significant monetary loss on our 100% tax paid cash"? I'm curious to know and understand.
> What kind of business is your family in that caused "personally suffered significant monetary loss on our 100% tax paid cash"? I'm curious to know and understand.
I am a NRI, me and my family have significant amount of Indian currency in US. All of it is 100% tax paid.
Indian Government has provided us no way to exchange currency or deposit it in our account if we are outside India. Modi declared our hard earned money as black money, and labelled us as criminals.
My father in India runs a cash and carry wholesale businesses. His typical customer is a street vendor in some remote village. When they come to my father's to buy inventory, they pay in cash because that is the only way for them to accept and make payments in villages. Most of them don't even have a bank account.
When Modi announced demonetization, his business dropped to almost zero. Two months since, it still hasn't recovered much. His business is seasonal (woolen products), most of it is in winter months only. Demonetization has turned this whole year into a major loss for him and it has literally crashed their Industry, which is resulting in layoffs.
Modi ji gave immunity to Politicians, so Political parties can deposit unlimited amount of cash tax free. I thought demonetization was a scheme, but it turns out it is a major scam.
> So you have 6 months time to deposit your old 500 and 1000 notes which even resident Indians don't enjoy as a privilege.
Previously, we could simply exchange Indian currency to any other currency abroad. But now there is no way for us to exchange money in US.
My whole family will have to go to India to exchange money, one person can only carry a maximum of Rs. 25,000. So six members of my family would have to take time off from work and go to India to exchange 1.5 lakh Rupees. Moreover, it would cost us around Rs. 6 lakhs to make a trip to India.
I don't want any privilege, I just want my hard earned money back.
> Why are you whining?
I am not a blind bhakt. I lost 1.5 lakhs in this Modi's scam, this scam also destroyed my father's business in India.
Modi killed over 100 people and destroyed millions of jobs, so he can write off bad loans worth billions for his cronies.
> Previously, we could simply exchange Indian currency to any other currency abroad. But now there is no way for us to exchange money in US.
> My whole family will have to go to India to exchange money, one person can only carry a maximum of Rs. 25,000. So six members of my family would have to take time off from work and go to India to exchange 1.5 lakh Rupees. Moreover, it would cost us around Rs. 6 lakhs to make a trip to India.
You shouldn't have kept so much INR with you in the first place. What is the necessity to keep 1.5 lakhs hard cash in US when you can't even use it? Most of my NRI friends don't even carry cash. Even when I travel abroad I normally use International Debit/Credit cards issued by my bank. If there is a dire need to carry cash I normally convert it to dollars as soon as I land in the destination country.
You kept this stash of money without converting it to the dollar equivalent. It makes no sense to me at all and raises even more suspicions. Also, most of my NRI friends have NRO accounts which they have already used to deposit their old notes when they visited India during the demonetization phase. So it is purely your own doing to hoard INR in a country where it is not even recognized for trade.
> I don't want any privilege, I just want my hard earned money back.
In all possibility, you won't get it back. You had all the time in the World to convert your INR to USD through a local money exchanger. But you chose not to and decided (for whatever reason) to hoard it instead. If I were you, I would have converted my INR to USD as soon as I landed in US. I would rather have US dollars than have INR. If I needed INR I could have easily converted it back when I landed in India.
> I am not a blind bhakt. I lost 1.5 lakhs in this Modi's scam, this scam also destroyed my father's business in India. Modi killed over 100 people and destroyed millions of jobs, so he can write off bad loans worth billions for his cronies.
Nobody killed anyone or destroyed "millions of jobs". It is your own doing. You chose to stash INR instead of converting it to USD as soon as you landed in US.
He never said he will "write off bad loans". You are now spreading pure propaganda. He only classified these bad loans as NPA. Learn the difference between a loan write off and an NPA before spouting nonsense.
> You shouldn't have kept so much INR with you in the first place.
It's my hard earned tax paid money, and its my choice in what form I want to keep it.
The currency note says "I promise to pay the bearer the sum of one thousand rupees."
The Government and RBI are defaulting on their debt obligation against the promissory note. It is plunder and loot of massive proportion, even Congress wasn't this corrupt.
> So it is purely your own doing
My fault is that I trusted Indian Government and economy. After suffering through this Modi scam; my #1 priority is to close all my accounts in India, liquidate all my assets in India and withdraw all investments from India.
I will never make the mistake of trusting Indian Government and economy again.
> It's my hard earned tax paid money, and its my choice in what form I want to keep it.
Sure you can. But you need to bear the consequences as legal tender does not have unlimited liability (in other words: the debt obligation is not absolute). Because the Section 26, sub-section (2) of the Reserve Bank of India Act, empowers the Union Government on the recommendation of Central Board to declare that "any notes issued by the Reserve Bank will no longer be legal tender."
Also, Section 26, sub-section (1) of the Reserve Bank of India Act states that: "Subject to the provisions of sub-section (2), every bank note shall be
legal tender at any place in 4[India] in payment or on account for the amount
expressed therein, and shall be guaranteed by the 5[Central Government]."
It clearly states that the bank note will be legal tender at any place in India and shall be guaranteed by the Central Government. It does not say that the bank note will be legal tender outside India and does not give any guarantees. Yet, the Government opened a window for NRI's to deposit their notes (if they have any) with their respective Indian banks in India.
> The Government and RBI are defaulting on their debt obligation against the promissory note. It is plunder and loot of massive proportion, even Congress wasn't this corrupt.
That's your opinion. I don't believe it is plunder or loot. Hoarding of cash (whether tax is paid or not) is equivalent to loot as it stops the money from being in circulation thereby causing the RBI to print more and more notes to compensate for an increasing demand for these paper notes. If you had deposited in the banks the Government would have used it for public good (and guaranteed you interest + principal amount). Notes that have been hoarded are neither useful for the Government, for the public nor for the hoarder thereby putting a huge stress on the overall economy. Unfortunately for you, you fall in the basket of hoarders who paid tax rather than basket of hoarders who did not pay tax (black money hoarders). But you hoarded nevertheless and there in lies the problem. You may say it's only 1.5 lakhs. But just imagine if every single of the 1.25 billion Indians think the same way. Like I said earlier, all my NRI friends used to deposit their money into their NRO/NRE accounts and if they carried cash they would convert to equivalent USD as soon as they landed in US. I mean, who in their right mind would not want USD in favor of INR? Especially outside India where it has no legal value (except in Nepal and Bhutan)?
> My fault is that I trusted Indian Government and economy. After suffering through this Modi scam; my #1 priority is to close all my accounts in India, liquidate all my assets in India and withdraw all investments from India. I will never make the mistake of trusting Indian Government and economy again.
But you will trust a Government that prints "In God we Trust" on it's own notes? Was it not Roosevelt who passed the "Executive Order 6102" in 1933 which "forbids the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States"? The reason given by Roosevelt: "Hoarding of Gold stalled economic growth and made depression worse".
So now anyone who doesn't worship Modi is anti-national hoarder?
Anyone who have cash for emergency purpose is a hoarder? Is cash illegal?
99% of my money is in bank, less than 1% of it is cash; out of which only a small fraction is INR. I require it for travel and emergency purpose.
Andhi Bhakti is not allowing you think rationally. Good luck with the jumlas, now that Modi has confiscated our money... he is sending you 15 lakhs soon.
You can't factually rebut my answer so you are down to rhetorics.
> So now anyone who doesn't worship Modi is anti-national hoarder?
By all means worship Modi as much as you want and you still won't get your cash back. What you did is sheer stupidity. Keeping so much INR as cash-on-hand in a country where it enjoys no legal status is ridiculous. Even the RBI guarantees apply only if the cash is within the confines of Indian territory. It's jurisdiction does not extend to the United States. That's the reason NRI's have to visit India to exchange cash. This law was made by Modi's predecessors who ruled India for 65 years.
> Anyone who have cash for emergency purpose is a hoarder? Is cash illegal?
Cash outside India is not recognized as legal tender by the RBI. It is not Modi who made that Law. You keep 1% or 10% for so called "emergency purpose" it doesn't matter. Once it is outside India it is as good as a piece of paper.
Which "emergency purpose" does cash become valid outside India? You can't use that cash for anything. It is not recognized as legal tender in USA.
I have never had to keep greater than 10,000 rupees cash-on-hand at any given moment. Even during emergencies. Credit/Debit card is more than sufficient. All hospitals accept Credit/Debit cards. My Credit/Debit card works in any country I travel to. When in India I can use my cards for travel/emergency purpose as well. The only places where I actually need cash is for street vendors and the rare case where I take autos/buses instead of Uber/Ola. I don't need freaking 1.5 lakhs for this. I can do well with a few hundreds. Who are you trying to fool my friend?
> Andhi Bhakti is not allowing you think rationally. Good luck with the jumlas, now that Modi has confiscated our money... he is sending you 15 lakhs soon.
Rationally? You think keeping 1.5 lakhs cash-on-hand is "rational"? If I had so much money as cash-on-hand I would always be a worried man. I wouldn't want to lose it or have it stolen.
There are no jumlas. Your stupidity is the reason you lost that money. I would understand if a chaiwala in India had so much cash-on-hand. That's the reason the Government allowed upto Rs. 2.5 lakhs to be deposited without being questioned (but that will definitely be audited by the tax authorities). But an educated NRI, who is not even living in India, having that much cash is beyond me.
> Indian Government has provided us no way to exchange currency or deposit it in our account if we are outside India. Modi declared our hard earned money as black money, and labelled us as criminals.
This is a blatant lie. RBI allows you (a.k.a NRIs only) to deposit this money till 31st of March 2017 in it's branches. Modi never declared your hard earned money as black money or labelled you criminals. I'm now beginning to wonder why you have significant amount of Indian currency in the US. What use is it for you there? RBI has strict rules about how much INR you can take outside India (Rs. 25000 per person). This rule was made to ensure that if/when you return to India you have enough INR for lodging/transportation/flight expenses etc. You don't need INR to transact outside India anyways so this whole thing of having a "significant amount of Indian currency in US" is suspicious to me.
> My father in India runs a cash and carry wholesale businesses. His typical customer is a street vendor in some remote village. When they come to my father's to buy inventory, they pay in cash because that is the only way for them to accept and make payments in villages. Most of them don't even have a bank account. When Modi announced demonetization, his business dropped to almost zero. Two months since, it still hasn't recovered much. His business is seasonal (woolen products), most of it is in winter months only. Demonetization has turned this whole year into a major loss for him and it has literally crashed their Industry, which is resulting in layoffs.
I would have believed this story if it wasn't prefixed with your excuse to not be able to deposit your INR stash just because you are an NRI. This whole thing sounds really fishy to me.
> Modi ji gave immunity to Politicians, so Political parties can deposit unlimited amount of cash tax free. I thought demonetization was a scheme, but it turns out it is a major scam.
No he did not. Mayawati and her brother are already under investigation for a deposit of 104 crores into their party bank accounts. AIADMK chief secretary was arrested for laundering black money. More such political arrests have happened (including some BJP workers and party members who were showing off to the entire World that they were clean but were actually hoarding black money).
This argument is also not convincing. I'm sorry but I'm beginning to doubt your story. Especially when you mentioned that you are an NRI and have significant amount of INR in the US. It just doesn't add up. RBI notifications prohibit you to carry so much INR outside India and this rule existed for many years. How much INR do you have with you?
> This is a blatant lie. RBI allows you (a.k.a NRIs only) to deposit this money till 31st of March 2017 in it's branches.
Previously, we could simply exchange Indian currency to any other currency abroad. But now there is no way for us to exchange money in US.
My whole family will have to go to India to exchange money, one person can only carry a maximum of Rs. 25,000. So six members of my family would have to take time off from work and go to India to exchange 1.5 lakh Rupees. Moreover, it would cost us around Rs. 6 lakhs to make a trip to India.
> This rule was made to ensure that if/when you return to India you have enough INR for lodging/transportation/flight expenses etc. You don't need INR to transact outside India anyways so this whole thing of having a "significant amount of Indian currency in US" is suspicious to me.
We have a big family in US, and almost everyone have 20-25k INR for travel expenses. That makes a total of 1.5L in my household. All my NRI friends and relatives are suffering this loss.
> I would have believed this story if it wasn't prefixed with your excuse to not be able to deposit your INR stash just because you are an NRI. This whole thing sounds really fishy to me.
I just busted your propaganda of NRI's allowed to exchange money, but you ignore the fact that you would have to travel to India and spend over 1 lakh per person to exchange money.
Clearly, you have neither have experience exchanging money has a NRI nor running a local cash business. Yet, you accuse others of lying. From your post history, you sound like a BJP propagandist.
It implied otherwise. The OP tied an economic move (demonetization) to the death of a 100 people. That is a very narrow perspective to take, in my honest opinion.
Have there been any studies on the impact to prices on staple foods?
Because if everyone can afford food and basic items for living, does that mean the prices for these items will go sky high? Especially as supply will be short of demand?
Why would demand for staple foods shoot up? Sure, there's some hunger in India, but AFAICT most people are already getting most of the calories they need. If anything, I would would think demand for basic staples would go down as people switch away from the cheapest of foods to better ones.
> Hunger continues to take its largest toll in Southern Asia, which includes the countries of India, Pakistan and Bangladesh. The estimate of 276 million chronically undernourished people in 2014–16 is only marginally lower than the number in 1990– 92.
Assuming that "chronically undernourished" means they're only consuming half the calories they need, and given that rice is a global commodity, that means an increase of demand of ~2%. That's insignificant compared to supply shocks caused by weather which can affect supply +/- 50%.
That means either a vast number have an adequate calorie intake or there are a few "Bill Gates of calorie intake" in India. I think the first is more likely.
Worse, India (the nation) wastes a huge percentage of the food grown due to poor infrastructure (bad roads, limited refrigeration in the godowns, etc).
Also it's expensive to be poor: poor people in every country have to make a lot of bad-in-the-long-term tradeoffs due to transaction costs and loss of economies of scale (e.g. can't afford the savings of bulk buying).
When people have an opportunity reduce their base survival worry there's a chance they can fix some of the bigger problems. I don't think the Maslow hierarchy is terribly insightful but it's the right argument here: some problems are simply unfixable when you are busy worrying that you will starve to death.
"Because if everyone can afford food and basic items for living", the economic collapse is unavoidable. How did we develop this notion that the economy can function well only when a portion of the population balances on the edge of starvation.
>How did we develop this notion that the economy can function well only when a portion of the population balances on the edge of starvation.
"Pure ideology", a belief that's more moral than factual. You see, we have to discipline the lower classes into working hard, therefore they must live on the edge of starvation, therefore not attaining this disciplined state will inevitably collapse the economy. The causal connection is conjured from air to support the desired policy.
Cynical answer: because the people who benefit most from the status quo tend to be the people who either own media or can get their ideas out into the media most easily...
I have seen this happen in Pakistan during the years of Musharraf's presidency.
The economy was moving up and more investments were coming in. More money was flowing. The prices of local products went up, especially food. Of course, more foreign products also made their way into the country. Some people were profiting from this movement, but the people who were poor could not benefit and they sunk deeper and went hungrier.
The supply of food was never able to meet demand, so prices are still high even now. Income never went up as much to compensate for the higher prices. Something about the mechanics of price setting got stuck somewhere. It is difficult to say where though: policy, trade, corruption, inflation, deflation, waste, or maybe it was technological limits.
But the answer is more complicated than supply will grow to meet demand. My theory is that a stagnant poor economy brought greater equilibrium to wealth distribution. When the economic conditions were sustained, people achieved social efficiencies in trying to save the supply of products and squeeze more out of less. When the economy exploded, waste increased, and demand was never met, either for reasons where people switched trades and could not switch back, excessive trade costs kept prices high, or maybe prices only go down in times of recession.
If I reversed the question now though, I would ask why cannot current prices go down to accommodate for greater demand (even if the demand is financially weak).
The changes you describe are very different than something like introducing BI and I would expect them to do pretty much what you describe. Prices are very sensitive to the distribution of income, so while external capital investment may increase demand for labor and increase agricultural productivity, it also skews production away from agriculture.
This is also the answer to your closing question: Since those who need the basic foodstuffs are financially weak and becoming increasingly so as the proportion of income shifts away from them, the proportion of capacity allocated to producing food for them decreases.
In a UBI scheme, the exact opposite happens. The allocation of income is shifted downwards, so the allocation of production shifts accordingly.
> allocation of income is shifted downwards, so the allocation of production shifts accordingly
Your explanation makes a lot of sense. It points to the lack of distribution of income as the culprit behind hunger and poverty. But it also narrows the premise in which UBI works: 1) when money is not printed artificially to fulfill UBI, and 2) when financial energy is taken away from more affluent portions of the economy.
This seems like adding another element of fragility vulnerable to manipulation in an already complex economic system.
Someone please correct me if I'm wrong, but I seem to recall Indian colleagues telling me that the India government sets maximum prices for certain basic foodstuffs, such as rice or flour?
That's only in so-called 'fair price shops'. In practical terms they run out of (or claim to run out of) foodgrains before demand is met. This subsidised material is then sold for a profit illicitly. The same scam happens in e.g. subsidised medicines.
Even if there wasn't any fraud involved, the expected result of forcing prices for the end-consumer below the market price is shortages for the end-consumer.
Since people often tend to mentally model the non-end-consumer part of the chain as having infinite supply (since in their day-to-day lives it appears to be the case) in their mind, that is often counter-intuitive. It may be easier to understand the flip side of the same principle, which is that if you hold the price above the market price, you'll end up with excesses left unsold, because insufficient numbers of consumers want to buy at that price. Since this is phrased in terms of the end-consumers not wanting to spend more than they want to, it's less counter-intuitive, and perhaps less politically offensive to some's sensibilities. But it's the exact same effect.
Price inflation of basic necessities is my major concern with BI schemes, I get the impression that noone really wants to discuss the other systems such as price fixing, and nationalisation of many services that would need to be deployed in parallel with basic income to prevent this from happening.
Because for all that some people may still vigorously claim otherwise, we all have pretty much come to grips with the fact that Communism doesn't work. If BI only works with price fixing and extensive nationalization, that's equivalent to saying it doesn't work. "Price fixing and extensive nationalization" has been tried. A lot. The signal is pretty clear.
(Note my "if". I'm only giving an "A -> B" statement, I'm not claiming A itself must be true.)
If you strip away the shell-game effect in BI (working people pay in $x and get back <$x) and remove unknown economic issues like inflation, you end up with essentially the welfare system the U.S. has today. We provide the poor with subsidized food, medical, housing, child care, etc. We provide the elderly with income streams and medical care. We provide income for the permanently disabled.
I'm not so sure an expanded welfare system and single-payer healthcare isn't a better alternative than BI. BI seems to support a privileged ideal that "I shouldn't have to work in order to pursue my interests" that I'm not certain fits into any sort of healthy capitalist economy.
I'd say that the single minded pursuit of any political ideology to it's logical conclusion has been proven not to work. I think this applies in both perceived directions.
No. You need to understand the economics of commodities opposed to individualized goods for this to really make sense. Greater access to a commodity will often reduce its costs as it means greater consumption and increased market penetration to satisfy (and thus stabilize) its demand and thus development.
Every time UBI is brought up, vague arguments about inflation come up. However, I've never seen anyone cite economic literature that actually quantifies such an effect. It's just a claim justified by an understanding of economics 101. However: there's a reason why a study of economics doesn't end at the 101 level. Economics 101 is a grossly simplified toy facsimile of the actual capitalist economy.
There are professional economists who support UBI or at least experimenting with it. Am I supposed to believe that they never considered the vague and simplistic argument that can be posed with minimal effort in an Internet comment?
Because claiming that UBI will cause inflation is not justified by an understanding of Economics 101. Most basic economic theory will state that inflation is basically a monetary phenomenon. (Now, if you use monetary expansion to pay for the UBI, as the occasional person has suggested, then Econ 101 would suggest inflation, but that's true for any expenditure funded that way.)
> Most basic economic theory will state that inflation is basically a monetary phenomenon.
Uh, no, that's not true at all. Monetary policy is only one of many factors that can drive inflation.
> Because claiming that UBI will cause inflation is not justified by an understanding of Economics 101
Uh, yes it is. MV = PQ is literally in introductory economics textbooks. Advocates of UBI talk about how it would encourage growth by "stimulating spending". Well, that's literally saying that it would increase both V and Q. And mathematically, we know that a redistributive policy cannot increase Q as fast as it increases V, which means that P increases. Hence, inflation.
You can make an argument that increasing the monetary supply at the correct rate would offset the increase in prices, or that the impact on unemployment rates would factor in, but at that point you're moving way beyond Economics 101 and far off into the realm of contested and unproven research conjectures.
Well, I think advocates of UBI arguing that it would encourage growth by stimulating spending are ignoring the fact that a tax-funded UBI would take money from elsewhere. It doesn't necessarily matter what advocates of UBI say about its suppose growth-boosting effects or what have you - the parent post was saying that Econ 101 understanding affirms that redistributive policies increase inflation, and I disagree. I should definitely qualify that with the caveat that I'm talking about Monetarist Econ 101, where V is stable in the long run, and Q is determined by overall productivity. Therefore P is roughly proportional to M. Sure, there's short-term effects, but over the long run, by Monetarist Econ 101, a UBI, if funded out of tax revenues, shouldn't cause inflation.
The economics suggest UBI is inflationary even if budgets are balanced. For several reasons -- the most 101 is that an increase in the real value of the welfare scheme decreases the labor supply, implying rising wages and therefore rising prices.
Yes, an increase in real value of redistribution should raise the reservation wage and suggests increased wages for those people in the (somewhat smaller) labour force, but it will require higher taxes on those income-earners, reducing their real after-tax income. The money has to come from somewhere. I'm not saying that no prices for particular baskets of goods will go up, I'm just saying that general inflation will not occur if UBI is not funded through monetary expansion.
There is another issue besides the labor/wage effect on price, that aggregate demand is increased and therefore at current prices aggregate supply does not meet demand. Aggregate price levels should increase (keeping it at econ 101 since we could speculate about investment at this point).
edit: consumption increases despite the distribution being balanced since it's assumed that the transfer is from a minority of tax payers with significant income/assets to a majority that sees a substantial increase to their minimum guaranteed cash flow.
Yes, aggregate demand is increased but aggregate savings, which are the source of investment, are decreased. Those assets of the minority, we're assuming, are also productive. So the prices of the assets purchased by those with 'significant income' go down. So this might manifest as increased prices on low-end staple goods and decreased prices on durable assets. Still doesn't imply general inflation. (Of course, this is a major bone of contention of the whole Monetarist vs Keynesian debate, so if you think the Keynesian account is more convincing, then that's a sticking point.)
Many if not most Americans have investments, so the effect is not exactly balanced. Households that could do so would adjust their portfolios taking into account the additional guaranteed cash flow.
Investment also reacts positively to the expectation of inflation, though that's getting more speculative. I think I've reached the limit of what I can do with Econ 101, but I hope to have shown that there's at least a principled claim to UBI being inflationary. Rising consumer price levels alone is inflationary under some definitions, and the effect on investment is not straightforward.
I got these citations from wikipedia because I'm at work and can't spend too much time providing a citation trail. I've read the second citation but haven't watched the first:
Every basic income story has an inflation comment.
Think in terms of proportion of wealth helps. If a company issues new shares and gives it X(analogy to govt printing money), the overall dilution in value of share doesn't prevent that the wealth of X from going up. For instance, giving 100% new shares of a 10 million dollars company to X means each share has half of the old value, but X has nevertheless gained 5 million dollars.
Redistribution, as opposed to new money, would put even less stress.
Another argument for inflation, is the possibility that the poor are consuming non-elastic goods(ie supply doesnt increase with price), so lot of extra money effectively ends up with the sellers of these goods. But this is probably false and at least not obvious. It has to be shown why supply of goods that people consume is inelastic. Most likely redistribution would lead to poor gaining a larger share of the output produced in a year relative to the rich.
Note that there can be other potential arguments against basic income(wasting money in alcohol, alternatives like supplementing wage-income), but inflation doesnt directly make the case against it.
The argument for inflation is simple. You are giving goods and services to people, who then also self consume their own labour. So they get paid twice in real terms.
If they worked for a living they would get paid once, and their output would return to the social pool.
Since the social pool ends up less than the counterfactual, and there is more money chasing it you have inflation. Those working get fed up with that and agitate to have the scheme ended,
And that is why income guarantee schemes fail. They never appreciate that money and stuff are two totally separate circuits that only have an inductive connection.
Ok, this is another argument for inflation depending on the reduction of work incentives after basic income. So lower amount of output is distributed among same number of people causing inflation.
But for making this argument, you will have to explain why increasing wages doesnt have the same effect as supplementing labour income with an extra stipend. After all, we are talking about basic income, ie a low amount. In this case it is even more modest (my guess is around 50$ or so a month).
To make this argument in general, you would need some idea of how large this work disincentive effect is. Remember there are many positive effects as well - the security of income means that someone doesnt need to do drastic stuff like selling off capital(for instance, cutting short training and taking up a job immediately) in bad times or becoming indebted due to basic necessities.
Price inflation and deflation occur when there is a temporary mismatch between the apparent relative economic influence of the consumer and the availability of goods and services, or actual economic influence.
If you give every member of the lower class a cash income that is effectively a transfer payment from the upper class, you are redistributing apparent relative economic influence.
We can look at this as though the entire economy were just two people. Let's call them Peter and Paul. Peter is a rich landowner, who owns the everything factory. Paul is Peter's employee and tenant.
Let us also say that the status quo is for Paul to do all the work in the economy. He keeps all the machines in the everything factory cleaned, oiled, and programmed. But Peter owns the factory and the machines. He sets Paul's wages, and the prices of the goods and services produced by the machines. So being a good businessman, Peter sets the prices of food, housing, medical care, and everything else, such that if Paul were to purchase everything he needs and everything he wants, it would require 120% of his wages. Peter, you see, wants to keep Paul motivated to do additional good work for Peter's sole benefit. Paul has to prioritize the things that he wants, and never has quite enough to be content. And Peter gets to keep everything that Paul makes with the machines in excess of what Peter decides he can have.
Now Paul programs the machines to make a pistol, and he eats beans and rice for two months to be able to buy it. He then points the gun at Peter and says, "Brother, we need to talk."
Paul is not quite as smart as Peter. Instead of demanding ownership of the factory, like a dirty communist, or a change in the goods-production algorithm, like some kind of genius technocrat, he asks for more of the fake units of accounting that Peter manipulates to keep Paul from getting everything he wants, like a complete idiot. Peter huffs and puffs and pretends this is a grievous loss for him, and finally agrees. Paul holsters his gun and goes back to work. Peter goes to his management terminal and sets up a monthly payment in addition to normal wages. Then his automatic price-management daemon slowly ups the prices of everything Paul routinely buys from the factory until it is once again costing Paul 120% of his cashflow to get everything he desires.
In this instance, there was no change in the availability of goods and services. Peter still ultimately makes all the economic decisions. So any change in relative economic influence causes price inflation or deflation, until the influence matches the market again. The money is the lubricant for the economic engine, not the fuel. You don't ask for gear grease when you want #2 diesel.
Paul should have demanded that he be given a certain percentage of everything the factory produces, independently of Peter's fake accounting units. For instance, he might have demanded that he get a guaranteed 5000 kcal/day of the robot-produced food, without having to pay for it, and 2 L/day of the potable drinking water, and 4 hours/month with the AI physician, and 9 hours/day in the factory's capsule hotel. That would necessarily shift the production of the factory towards the things that Paul wants, without affecting the prices of the things Paul does not specify in the deal. Peter will still try to adjust the prices of those other things so that Paul must work full-time in the factory to get some of the things he wants. Peter doesn't want to get his hands dirty, after all.
Scaling this back up to the real economy, this means that UBI as transfer payments of cash from rich to poor will never have the intended effect. If the intent is to provide everyone with a guaranteed floor of necessary goods and services, the only way to do it is to take production capacity from the rich and produce the necessary quantities directly. If the U.S. collectively consumes 300 million metric tons of food per year, the federals tax Monsanto, ADM, et al. the 100 million metric tons of that Americans actually need to eat to survive, and tax Kroger, Walmart, et al. some of their distribution network to get it into stores, then issues everyone their ration coupons and tracks the redemption locations Kanban-style, so they can fine-tune the distribution. You get your one bag of cornmeal for free, but if you want a second bag, you have to get a job and pay for it.
That is considerably more administrative overhead than just cutting everyone a check. But it is the only feasible way to accomplish the intended purpose on a permanent basis without forcibly changing property ownership. If you're going to be socialist, even in part, you have to control the means of production outside of the normal market price system. Otherwise, the free market eventually routes around your mandates as damage to the business network. If you're not going to nationalize it like a communist, you have to give the existing owners binding production orders, like a fascist. It just so happens that America hates communism, is at least passably friendly with fascism, and saddled with loads of debt, so mandatory production orders would be how to implement UBI there. Countries with big sovereign wealth funds from state-owned natural resources can go the semi-communist route, buy shares in the necessary companies, vote as necessary to guarantee their supply, and take their dividends as a share of the production. I can't say which would be better for India, but I think fascist-style UBI would be more likely to work there.
UBI as an idea needs testing. Theoretically it solves an immense number of social problems (homeless/poverty) while drastically reducing government size (signifcantly less administration).
There are also a number of behavioural assumptions that people are making that also need to be tested, primarily the assumption that people just won't work.
What I think you will find is that people will not be forced into virtual slavery working for a pittance just to survive any more. UBI will have a net benefit on society.
What UBI says about our monetary system and whether money is inherently just a way to control society is another matter.
Only really poor people will consume more. When those at the very low end of the income scale have, say, 100% more money through UBI (ignoring the actual value of that money, just sticking to the numbers for now), then high income earners would have 50% more, or 10% more or just 1% more, depending on their earned income. Relative to the high earning class, the poor will be able to bid more, inflation or not. A shift in resource allocation, "diverting water from golf courses to subsistence farmers", to paint a grossly simplified picture. Prices will rise, but not by the same amount as total income.
(theoretically there might be a few exceptions, e.g. goods that are not very flexible in supply and target a very specific low income demographic)
Because no money is being created, it's being reallocated from other people, so it doesn't directly affect the money supply.
The recipients are more likely to spend it, which creates some demand (and thus inflation), but it should still be less than the increase in spending power it provides them.
"Because no money is being created, it's being reallocated from other people, so it doesn't directly affect the money supply."
And unfortunately that is bunkum. Money isn't stuff. If you take what is currently savings and put it into flow then you will get an increase in production - that is then effectively taken away and given to people who haven't earned it.
The result is, over time, an increase in political pressure to get rid of the hand out from those doing all the work and getting nothing for it in return.
And that's how an income guarantee scheme ends. Just like every other 'experiment' in history.
People want the ability to exchange their labour for goods and services, not be the recipients of handouts and resented for it by those doing the work.
Governments have found one neat trick to hide what are exactly handouts from scrutiny like that. They call them "tax credits". A "tax credit" is literally just a handout, a $1000 tax credit means you get a $1000 check. You don't even have to pay any taxes to get a tax credit. It's a pure handout. But the phase "tax credit" implies that it is somehow connected to taxes that you've paid some time in the past, so in people's minds it's not a handout anymore. Even hardcore conservatives can get behind "tax credits"!
All you go to do is call the handout a tax credit and give it to almost everyone, and you implemented UBI. In the USA, you wouldn't even need a new system to implement. We have various proto-UBIs written in our tax code, the most notable being the Earned Income Credit, we would just need to "enhance" it.
You recognize that you are no longer supporting the premise that BI will cause inflation, yes?
You seem to now be making the argument that altering the distribution in this way is unfair, but the whole point of BI from the point of view of a proponent is that it is an adjustment to balance out inherent systematic unfairness so I don't think you'll get very far with that line of argument.
A lot of the money held me the wealthy isn't competing with me for potatoes. I could be wrong but if ever single person had 1,000$ more, wouldn't the price of basic goods go up to accommodate?
Very simple. You are moving stuff to people who don't work for a living and giving mere money in return.
So there is less stuff available for those who work and more money chasing it. Which is inflation. Once those working realise they have been fiddled, they politically agitate to have the handouts stopped.
I think that it is true of implementing UBI decreases labor force participation a lot but I think it is a worry in UBI but it's an implementation issue and not inherent in the system. Welfare currently is giving money to people and inflation isn't out of control, even though welfare sometimes disincentives work. It's the same as the unemployment people talk about with the minimum wage, if it's poorly constructed then of course it will lead to lots of unemployment but in most cases it is fine.
This thread is political, just that it is Indian politics instead of American politics being discussed. An opportunity for American readers to get a first hand idea of what it feels like to have long threads of inane politically motivated discussion which doesnt' make much sense to readers from other countries ;-)
Most of my friends who are communists are calling this "class control" and I'm laughing at them because they are getting what they wanted just without mass riots and murders of the rich.
How are they getting what they want? What communists (and in a lesser sense, socialist countries) want is less of a chasm between the lower and upper echelons of society. Just this day it was posted on Reddit that a top London banking boss will already have made more since the start of the year than an average worker will the entire year (!!). All UBI does is make sure everyone has a baseline to live from. That's great, but its just a sedative for the masses. You're a lot more likely to riot if your kids are starving.
I wonder what will lie beyond UBI. 3D-printers for everyone? Everyone can print a fancy car, a lobster, a new arm, etc.. which would basically make everyone completely equal.
* Wealth redistrobution
* Basic standard of living
* Safety net
That's pretty communist in my mind. I know the purists out there will wave their hands and say "this is just an attempt of the bourgeois class in an attempt to lul the proletariat into a false sense of safety while what they are really getting is life-long survitude to their masters" because that's what my communist friends think. I think that with a rational look at this you can see it as an attempt to level a playing field in a communist fashion. Everyone starts off at a level playing field where they cant go hungry and have a basic standard of living.
From the US that seems like voo-doo communist magic.
Also, I find it funny that the communist, who argues for the rights of the lower classes, is asking... I'm not going to say it. You put it best.
"You're a lot more likely to riot if your kids are starving."
Or in other terms:
"You're a lot more likely to <do what I want> if your kids are starving."
No, and some difference will always be there. That's healthy - it aspires people to be more. But I'd like it to be more like Star-Trek: people work hard and achieve things for the prestige. If you become captain of a star ship, you're admired, and you (for example) still get more pretty ladies fawning after you than the helm officer. And he does so more than a dude who wants to do nothing but play GTA:XXIV on the Holodeck. But that dude can get the same food, education and modes of transport as the captain, if he so desires.
Most importantly, the kids of the holodeck videogame player are not condemned by the sins of the father, and the kids of the starship fleet captain don't get to ride the coattails of their father either.
Hardass "realists" love modeling the market as anarchic self-interested atomic agents until it comes to giving their own kids a leg-up even if they don't deserve it. Then it's all biology and social psychology.
Once in awhile I get annoyed about the fact that I have no real
privacy. No where I can go and not be registered. I know that,
somewhere, everything I do, think and dream of is recorded. I
just hope that nobody will use it against me.
Not exactly sure what comrade Auken has in mind when in passing she mentions her /thoughts and dreams/ are being "recorded". Possibly after cash-less society and basic income (provided by All-Knowing Mommy State) the "citizens" must submit to Leninist self-criticism sessions. Have no idea what she has in mind by dreams being recorded.
I think they are using India to beta-test their glorious plans for our future.
