I learned how this wouldn’t work in grade school. What are they teaching rich white South Africans these days?
It works if you pull money out of the economy and retire it with taxation.
That definitely helps. Although still have to contend with money velocity, which is why you need to adjust the prime interest rate on new debt
Just to be clear, we do quite litterally print money and hand it around in time of crisis, and as a literal component of our economic development strategy.
For example, there was no reason Obama was obligated to focus on saving the banks per se. That same money could have gone to home owners instead. They chose to do it the way that they did. Likewise during covid.
we do quite litterally print money and hand it around in time of crisis
The US Treasury borrows from the Federal Reserve on assets that are added to the Federal Reserve balance sheet. And then the Treasury pays back the debt incrementally over the period of the loan (often on the order of 10-30 years). So it isn’t “literally printed”, it is borrowed at the Federal Reserve Prime Rate, which is typically less than the growth rate of accumulated tax receipts by year.
For example, there was no reason Obama was obligated to focus on saving the banks per se. That same money could have gone to home owners instead.
Absolutely. TARP was some bullshit used to prop up bank equity value at the expense of homeowners.
But the principle behind TARP was that the US government exchanged currency for equity stake in these failing firms. And the firms that recovered then bought back the state at marginally higher face value, which allowed the Treasury to book a profit for every business that hadn’t outright failed already. Over the life of the program, the real cost to the Treasury was minimal (arguably profitable, depending on who you believe).
The Treasury could have bought up mortgage notes instead, at pennies on the dollar, and started collecting interest on the debt just like the private banks had. Then they could have renegotiated mortgages of underwater homes at lower interest rates, while the private sector lenders filed for bankruptcy. That would have drastically reduced the foreclosure rate and dumped the material cost of the financial crisis on stock and bond holders of these private companies.
But in either case, we weren’t just printing a bunch of crisp new dollar bills (or their electronic equivalent) to fund the purchase. We were effectively doing the Vulture Capitalist trick of borrowing against the assets we’d just purchased, at an interest rate that was below the expected return value of the assets.
You know… I was going to shitpost outright infinite money theory.
The government is a sovereign country. It can print money all day long. And based on your comment, it could print print money against bonds to fund a better life for all.
I mean this is a shit post, but I’ve also added that we could feed and house the poor.
The Treasury could have bought up mortgage notes instead, at pennies on the dollar, and started collecting interest on the debt just like the private banks had. Then they could have renegotiated mortgages of underwater homes at lower interest rates, while the private sector lenders filed for bankruptcy. That would have drastically reduced the foreclosure rate and dumped the material cost of the financial crisis on stock and bond holders of these private companies.
I’m curious how this action would have changed the last 20 years of politics? Those in power during that time did a shit job of really explaining why the banks got the money and not the homeowner. I think this really exposed who the federal politicians were representing, and it wasn’t the everyday voters. I think that anger and sense of betrayal that the American people were told to “kick rocks.” while the actual criminals got a bailout of our money still sits in with of most of the population.
I’m curious how this action would have changed the last 20 years of politics?
Optimistically? It would have spared us a decade of people scrambling for affordable housing as unemployment skyrocketed. It might have spared us the Tea Party backlash of '10 and subsequent economic contraction in '14 that mopped up what was left of midwestern liberal democrats. Spared us a BLM riot or two, without tens of thousands of unemployed people taking to the streets in Missouri and Delaware. Might have forestalled a lot of the rush towards Silicon Valley techno-fascism, too, while keeping more industrial business domestic and preventing the ratcheting of tensions with China and Russia internationally.
But maybe not. Maybe people would have been just as angry for different reasons. It would still have been too little, too late to salvage the pre-'08 economy. And we’d have plunged off the cliff a little sooner or a little later, under a slightly different administrative structure.
I think this really exposed who the federal politicians were representing
Idk how your eyes are widened to the corporate strings tugging at Obama/Biden and miss the even bigger strings hooked onto Mitch McConnell and Paul Ryan.
Unfortunately, I think the vulgar analysis of '09 is fundamentally correct. Americans woke up to a black president and, for a healthy chunk of them, that was a bridge too fucking far. The US could have been a paradise in 2010 and they still would have tossed all the liberals out.
The bailouts became a talking point. And Dems who made a career of trying to defend them were the first on the chopping block. But we still ended up sending Hillary Clinton over Bernie Sanders to fight the Big Orange Cheeto. And progressives lost downticket over and over again, often to a deluge of media ad buys and an army of professional political hatchet men. All of this was happening under the toxic cloud of Epstein-ism and AIPAC-backed genocide and horrifying pogroms in Latin America, Central Africa, and the Pacific Rim.
The US Treasury borrows from the Federal Reserve on assets that are added to the Federal Reserve balance sheet. And then the Treasury pays back the debt incrementally over the period of the loan (often on the order of 10-30 years). So it isn’t “literally printed”, it is borrowed at the Federal Reserve Prime Rate, which is typically less than the growth rate of accumulated tax receipts by year.
And those dollars borrowed from the Federal Reserve… where do they come from?
The balance sheets of the Fed’s depositors.
I think the point is that since these dollars are borrowed, they must eventually be repaid with interest, so on the long run, they will be removed from the economy and they don’t produce inflation like if it was free money. Now, if the government can just allow itself to get a greater amount of debt every few years and only pay the interest, it may lose its meaning…
Elon Musk is a fucking idiot that doesn’t know how anything works. Tax the rich.
He knows how to grift.
He knows how to abuse employees
He knows how to strip businesses of their value for short term gain
He knows how to strip businesses of their value for short term gain
That one is not clear. He never seems to get any gain from his businesses.
Nah.that would create the illusion they contribute something. Exterminate them.
I think maybe Musk is an idiot
I don’t understand how an entire tech industry fell so hard for him.
You should be asking who his publicist is. Whoever they are, they are very good at what they do. The only reason we all figured out Elon is a trash fire nazi is either he stopped listening to the publicist or he fired them and went rogue.
That’s actually a good point
Because nobody’s told you, or because you don’t want to?
They aren’t necessarily exclusive of one another though. It could be both.
True, and they wouldn’t have a way of knowing which.
We all hate Musk but isn’t Musk suggesting Universal Basic Income?
Yeah, billionaires like UBI because they can pretend they care about the plebs, but in reality they know it will just cause inflation, which there stocks won’t be effected by, and push even more money into the stock market to protect against inflation, inflating there portfolio.
The plebs will then realize it’s not working and then be skeptical of any program designed to help the poor. UBI is a poison pill for the left.
How is a guy who says too much was spent on food stamps and foreign aid going to like the budget to produce a livable UBI? It’s basically selling people a pipe dream to justify cutting current social services, and then we can colour us all shocked when UBI either never rolls out or is like $5 per person
No. That would be achievable through reallocation of funds, e.g. from tax revenue. If the quote is correct, that’s just increasing monetary mass, aka printing money. Which is Inflationary AF.
That being said, I find it hard to believe that a CEO in this day and age wouldn’t have at least this basic understanding of how the economy works. This being Musk, there’s no need to invent extra character flaws. The man has plenty to go around.
find it hard to believe a CEO wouldn’t understand
Being a CEO is an actual disease that causes measurable cognitive decline. These are literally the dumbest fucks on the planet.
A cynical view is that he does understand and is just shitposting and muddying the water around UBI
I find that quite plausible.
Its a cover. Saying populist ideas without any intention to support them or help them come about is just a way to hide his real actions under a veneer.
The only way this makes sense, and I guarantee he’s not advocating for this, would be to print and distribute so much money to the lower and middle classes that the upper class wealth is diluted and inequality is reduced. But the havoc that would wreak outside of the US is something I can’t even speculate on.
But even that wouldn’t do a thing to them - their value isn’t stored in money, so any inflation would only hurt the people who’s value is.
Well, the text says “you could actually get deflation because there will be so much abundance produced”. There is some reality where this is true, as increasing the monetary mass would do nothing if the economy (the amount of goods and services produces) increases proportionally. But I wouldn’t bet on a universal basic income increasing the country’s production.
Also, only the rich and upper-middle class would suffer from inflation. Poor people’s financial situation would still improve.The printing money wouldn’t be enough. You’d also have to legislate what people are not allowed to do after the money printing begins (like rent hikes equal to the average household size * the ubi check).
Which you already have to do, because there already is inflation. I don’t see how a UBI would change anything if the inflation stays the same.
How do you get UBI without issuing checks from the Treasury. There isn’t enough tax money that can be taken from Billionaires to sustain UBI.
Not just tax a percentage, but take every penny of every Billionaire in the US. Net worth of all US billionaires is 8.4 Trillion.
270 million US adults.
= 31k per person. Once.
That’s 31k one time. Then there is no money for next year.
Net worth of all US billionaires is 8.4 Trillion.
The productive capacity of the accumulated capital owned by US billionaires exceeds $31k/person/year.
The “Net Worth” figure is deceptive, because it’s the exchange value and not the use value. Sitting on tens of millions of vacant real estate units, many of which are underwater on their purchase price, shows up as far less on an individual balance sheet than the material benefit of not being homeless accrues to a homeowner.
Nobody said it had to be over $2500/month?
Minimum wage in many US cities is $15/hr which is $30k/year.
Even at federal minimum wage of $7.50, that means not just taxing Billionaires at 100% but taking everything will give you 2 years of UBI before there is no money.
Minimum wage in many US cities is $15/hr which is $30k/year.
So? UBI isn’t a wage for work. It could be $300/month and that would still be a huge boon to struggling people.
The UBI baseline is supposed to be $12000 per year. The premise is it covers food and shelter.
So why did you inflate it to nearly 3x that amount while arguing about how it can’t work because it’s too expensive? $1000/month is still a lot of money for people.
I just looked over the interview. it was fucking WEIRD man. He’s kind advocating for a UBI? Basically he’s saying that AI is going to give us the whole Star Trek “post scarcity” future thing and like money is simultaneously going to be useless, but that how that could happen is the Treasury could just give people checks and inflation wouldn’t be an issue because the AI would be creating so much abundance. It’s genuinely hard to parse
It’s part of the grief, hyping AI and his robots while promising that he’s gonna give money after they replace the workforce. Guess what happens next?
Yeah, I remember what this fuck did to California’s high speed rail.
Inflation is good for musk, it means his investments make more money
Let’s all not be naive here
In the short term. But you still need a stable currency for international trade. So far, the US has managed to keep the dollar strong(ish) especially with regard to our oil and tech exports. And they’ve done this after floating over $30T in debt, no small feat.
Idk if Musk Bucks meaningfully change that math. So maybe it’s fine. A few hundred billion, which is still barely a percentage point on the national economy.
But it does add stress to an already inflated system.
This is the richest man in the world. fucking hell. I hope we don’t get a Mansa Musa moment
