New economic plan updated

We are nearing a time where unless we significantly change our approach to the economy we are doomed to failure and chaos. There are many reasons we need to change our current system, but the looming reason of most consequence is Automation.

Now most people who talk about the subject understand to at least some degree the problems that will arise in our system as automation advances, but I have never seen it put as clearly into perspective as I am about to. The working US  population (15-65 years old) is about 205 Million. As I see it, likely the first position to go fully automated will be transportation. Currently in the US there are 3.5 million professional truck drivers, about 1.7% of the entire adult US population. I say it will be truck drivers first simply because they’re already making self driving cars and already working on self driving trucks. These will benefit the industry greatly since they don’t need to stop for rest, don’t need to be paid, etc. This will simply be the first, not the last. This will also make ‘truck stops’ lose a lot of revenue, since all a truck would need to do is pull in and fill up, no need for buying random knicknacks or sitting in diners comparing trucker hats. Likely the next industry heavily affected is fast food. There are slightly more people working fast food, so if just half of those jobs are replaced by automation that’s another 1ish% of the adult population unemployed.

Now some people say that the jobs taken by automation will simply be replaced by people who do maintenance on the machines. This is illogical. Take Ingles corporation (near me and I know how they function so they make a handy example). They already have a maintenance crew for their truck repair. Whenever a new tech comes through they simply have their existing staff do quick training seminars so they know what to do. So when trucks become automated, they already have a maintenance crew who will simply learn how to work on the new systems as well as what won’t be different. They might hire one or two new techs specifically trained for working with the computer systems, but those one or two tech jobs will not replace the huge number of jobs lost by truck drivers employed by Ingles corporation.  So those jobs once gone are not going to come back or be replaced. I saw someone talking a while back (I forget who) but they said it quite simply. If a machine can replace 50 workers, and one person can maintain 10 machines, then 500 jobs would be replaced by one technician. It doesn’t add up.

Eventually we’ll get to a point where pretty much the only jobs left needing actual people will be healthcare related and service industry jobs. Looking at this from an economic perspective is terrifying because as more and more people become unemployed there will be less and less money to go around. This will leave more service industry people unemployed since people can’t afford things like going out to eat and whatnot. We will get to a point where most people are unemployed and with our economy currently based on work hours it will be turmoil. The economic divide will get so great that there will almost certainly be some form of peasants revolt, which could cause a significant amount of death and damage to our infrastructure.

Now of course, there are current existing problems that necessitate a transition to a different economic system as well. Poverty is a huge problem, homelessness is a huge problem, the economic disparity and the overall discontent of the population leads to criminal activity (to gain money), increased drug usage (to escape the unpleasantness of reality) and in a civilized society these problems simply don’t belong. Fortunately there is a way, it’s just doubtful it will ever get enough exposure and support to take off. We can tackle the current problems as well as the looming problem presented by automation and turn it into an economic boom.

Universal Income

Now currently according to THIS we are spending roughly 2.8 Trillion Dollars on a combination of social security, medicare and health, unemployment, housing and food assistance. Divide this amount evenly among every adult between the ages of 18 and 65 (which is around 203 million) and this is enough to give every single adult more than $10k per year. Now I think a significant portion of that is wasted instead of actually reaching the people it is intended for. Each type of funding is distributed through a huge chain of people and bureaucrats, there are literally people whose job is to simply check to make sure forms are filled out completely and send them to the next person, whose job it is to stamp whether or not it fits within required limits and send it to yet another person. Needless tediousness. So taking that $10k and just sending it to every adult by a single administering body would be so much more efficient. No need for verifying qualifications since it would simply go to every adult, it can be almost entirely automated, kicking out a monthly deposit to every social security number in the proper age range. But, $10k isn’t enough to live on. This is the tricky part, the initial imbalance.

Increase the yearly amount administered to every adult to $20k per year. That is plenty to afford basic necessities. It also means automatically that homelessness will no longer exist. This is going to imbalance the budget at first because it’s essentially doubling the amount of spending. But the benefits will cause incredible growth. First, companies won’t need to pay a minimum wage anymore since the people will no longer need to rely on wages to survive. I know some will argue that people will simply choose not to work, but that’s untrue. People are still going to want the latest consumer goods, the nicer cars and fanciest shoes and all, so people are still going to want to work. The difference mainly will be that people won’t fear homelessness and starving or losing their kids etc. just from losing a job. As soon as this transition occurs you will have every single adult in the country become a consumer, having the money available to buy goods, pay utilities, pay rent/mortgage/etc. Even homeless people will be contributing money into circulation.

Now to make sure to cover that increased cost (this is going to be upsetting to some), we get rid of tax breaks. All of them. No more tax exemptions for religious organizations, no more tax exemptions for sports organizations, if we want to use tax breaks to make a corporation or person do a certain thing (like transition to cleaner energy) we simply make it a regulation. No sense bribing companies to do what they should do. Now these tax breaks aren’t going to be much of a loss for companies considering they just greatly increased sales and no longer have a minimum wage to worry about. We make a flat tax for everyone, all income that isn’t part of that $20k per year is taxed at 35% (not quite the highest current tax bracket). This flat tax of all additional income will give the government plenty of funds to cover the cost of the universal income as well as work towards balancing the budget.

It also adds a new benefit. Even if 80% of the jobs go to automation, people will still have money to spend and companies will still be able to earn revenue. People will be more encouraged to offer their own services and start their own businesses since fear of failure no longer includes starving or being homeless. People will be more free to pursue arts, education and research, enjoying life rather than simply surviving it paycheck to paycheck. It will also be a strong encouraging factor for people to maintain monogamous relationships which would likely reduce STDs and other health problems.

I’d say couple this approach with the government providing public healthcare and higher education. It would also add greatly to the initial imbalance, but the benefits would outweigh the cost. Higher educated and healthy people are more productive, earn more, therefor contribute more tax revenue rather than simply being a burden on resources.

If you have anything to contribute, ideas for improvement, problems you’d like to point out etc. feel free to comment and let me know. I’d greatly enjoy the thoughts of others on this so I can improve areas that need improvement.