[manfredo]

The money comes from somewhere. No matter how you slice it, we're going from ~25% government revenue as a percentage of GDP to mid 30s or as high as 45% of GDP sent to the government. Only 3rd world countries and some small European States have that kind of tax/GDP ratio. For reference, Canada is 31%.

So the plan is to pass one of the biggest tax hikes in US history (probably the biggest one during peace time) and then keeping our fingers crossed hoping for rapid, consistent economic growth following said massive tax increase. I think I'll pass.

[rosser]

The money goes somewhere, too, though.

That "tax hike" would almost all get spent, and probably pretty quickly, because the overwhelming majority of it would be going to people who live close enough to hand-to-mouth that the differences are academic.

So is that pulling $3T/year out of the economy or pumping most of $3T/year into it?

[manfredo]

It's both: we're taking 3trn a year out of the economy and putting 3 trillion a year into the hands of Americans. Maybe they'll turn around and spend it. Maybe they won't. Perhaps you're right and every cent of the UBI goes back into the economy - but in that case it's still only neutral in terms of economic impact (and even this scenario is fanciful, there's going to be overhead in terms of administration and not everyone is going to spend their UBI check). It's an even bigger leap to think that siphoning $3T out of the economy somehow puts more than 3T back in - and that's what Yang is counting on.

Step 1. Pass 3T worth of taxes and spending cuts.

Step 2. Give everyone $1k a month.

Step 3. ???

Step 4. Poverty disappears, the economy grows by leaps and bounds.

It's a utopian vision. Tantalizing, yes I can empathize with people who like it. But let's not forget that Utopia comes from the Greek words "not" and "place". A utopia is something we all desire but does not exist. The pursuit of which has led many societies to ruin.

[rosser]

I think the position is that whatever fraction of that $3T that gets spent at the bottom of the economy will contribute more to the economy overall than it would have sitting in the bank accounts of whoever "paid" the tax, simply on the basis that so much more of it will be spent that way. Yes, it's less than $3T. It's still circulating. A moving dollar is more economically useful than one at rest, isn't it?

If we're going to premise the "health" of our economy in no small part on the movement of monkey status points, then move the things.

It's "trickle-up", not "trickle-down"...

[manfredo]

> I think the position is that whatever fraction of that $3T that gets spent at the bottom of the economy will contribute more to the economy overall than it would have sitting in the bank accounts of whoever "paid" the tax

Which is fantasy. It's not people paying the taxes it's a VAT that Yang's advocating for. This is money directly coming out of economic activity.

[rosser]

I wish I had the time to chase down the ways our axioms and premises are preventing us from doing more than talking past one another here, but I don't, and I don't feel like fighting uphill against a "which is fantasy" kind of tone, just to have the attempt.

Have a nice day.