Archive for February 1, 2010

Minimal Consumption Entitlement: 03

February 1, 2010 5 comments

In this post I will try to explain MCE implementation with actual examples and numbers.

So here it goes:

1. Let us say we pay each adult (over 18 or 21?) the equivalent of 36,000 USD/ yr (3K a month). It could be upto 48,000 USD/ yr but not below 24,000 USD/yr. Orphans and kids in foster homes could start receiving it at an earlier age.

The idea here is replicate normal income levels.

2. Now the person can spend it on “normal stuff” such as rent, mortgage, car payments, utilities, eating out, vacations, getting shit-faced and high (all drugs are now cheap, pure and legal). This is all the stuff people with useless jobs currently spend their “earned” money on anyway. No taxes on MCE, but no carryover to next calendar year either.

The idea is to replicate normal consumption.

3. If people try to use this money to pay debts or invest, they will be punished with enforced vacations/ shopping at destinations of their choice, where they will have to spend that amount of money before being allowed to leave.

The idea is to encourage consumption, over thrift and other malinvestment.

4. Money from jobs is extra, but will be subject to a progressive tax. So an average person with an average job will pay fairly low taxes, but high earners will pay much more. They have the option to give it to causes of their choice. So an engineer could make MCE + 50-80K/ yr

Provides a motive to work..

Similarly a billionaire may create a foundation to advance development of nuclear fusion technology, better space transport or whatever he fancies: as long as it creates jobs (while preferably advancing technology). The philanthropists name will of course be immortalized if said cause achieves something of great value.

Appeals to ego.

5. Education will be modernized such that fewer teachers and more technology is used, especially after the primary school level. People will have a choice on how they want their kids to be educated. Education at all levels will be funded by taxes, but since we have far fewer teachers and pensions to worry about- it will be much less expensive. Unions won’t like this one, but unemployed teachers will make at least the MCE amount.

So we can get back to educating, rather than pretending to educate.

6. Heathcare will be rationalized, such that doctors are paid less than they currently are. This will face massive resistance from many lobbies. Since google-like technology and well designed diagnostic maps can often perform much better than an average doctor, there is no need to pay them so much for something that is done better by a machine and a person making less than the physician.  Some areas such as surgery, critical care and invasive procedures will still require well paid doctors.

Medical care is meant to help people, not hurt and pauperize them.

Since a lot of healthcare dollars go into bureaucracy, ineffective medications and end of life care, we would have to consider a legal framework for self-initiated euthanasia. It does not make sense to pay hospitals 20,000 dollars/day for a very ill 90 year old who wants to just pass away in peace and without pain. We treat our pets with more dignity and decency than people with terminal illnesses.

This discussion will have to occur, one way or the other!

7. We will have to accept that most innovation never occurs in famous institutes, labs or under famous people. The biggest leaps are made possible by those who can work on their ideas in peace. Therefore funding for science should reflect that idea.

Starve the shysters who are blocking true innovation.

Far better to give 10 labs a million dollars than give one lab 10 million. I do not see the old guard taking this well. Personally I feel a lot of famous places have outlived their contribution to innovation, and have no socially useful purpose.

It is hard to predict what will work, so never shut doors.

8. Commercial banking is a utility. No if’s and no buts. Investment banking is done with your own extra money. Since everyone has a decent life without playing the financial casino, very few people with a decent life will have to gamble their savings on high risk scams.

We may require guillotines for this one.

Investment banking is something you do with your own money, as opposed to other people’s money (direct or indirect like pension funds).

That is the only way investment banking can work over any prolonged period of time.

As I have said before, I do not expect people to accept my ideas willingly. They will just run out of other options. The next post in this series is here: Minimal Consumption Entitlement: 04