The Solution To Poverty?

Author: ethang5

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#31
Buddamoose
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Sigh. No money would be printed. It isn't money. It is not pegged to any physical wealth.
ok, how many times does it need to be said, that injecting money into the economy, even if digital, still counts as adding money to the total amount of currency. Currency is already mostly digital. As pointed out before, only 8% of the currency/wealth is pysical. Everything else is already digital, and when you add to that amount, you will rapidly increase the supply of money, which will make it less valuable automatically. Wealth/currency is, again, a representation of commodities. The GDP of 18.7 trillion is not actually 18.7 trillion dollars in physical currency being generated, its 18.7 trillion in wealth(commodities + services) created. Currency, is again, not actual wealth, its representative of that which is actual wealth. 

The market itself would correct inflation. As demand for some goods increased, supply would increase to meet the demand, and many more people would have the means to add to supply.

Yes, the market would correct that inflation, because people would dump the dollar for another global standard of currency, dropping the value of that currency, even further. What you would have, is the people smart enough to understand the ramifications, dumping the dollar before this even happens. By the time you even got the 1 million, it would already be worth far less than it would have been previously. Again, wealth/currency is a representation ofcommodities. The supply of all commodities cannot magically increase overnight, so people would get that 1 million, and blow through it quickly because of inflation. Then by the time the market increased supply of commodities to meet the demand, its already too late, those people who you intended to help, are already poor again and ur right back at square one. But this time facing still much higher prices, cause now the dollar will have been inevitably dropped as the global standard.

You have the noble intent to help, but the road to hell is paved with good and noble intentions, and this is exemplary of that adage. 
#32
Buddamoose
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sorry, to correct, currency is a representation of wealth. Wealth is commodities + services. The 18.7 trillion in GDP, is a representation of 18.7 trillion in goods and services being created, not 18.7 trillion in currency being created. We already have a digital system of IOU's, and the consequences you say would not happen because it would be digital, still happen despite it already being near wholly digital.
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#33
ethang5
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...how many times does it need to be said, that injecting money into the economy, even if digital, still counts as adding money to the total amount of currency. 
It isn't money. Digital or not, it is not tied to any wealth. It is not representative of any wealth.

Everything else is already digital, and when you add to that amount, you will rapidly increase the supply of money, 
It is not money. You are not pegging it to the wealth of the country. It is not representative of any wealth. You aren't "adding" it to money.

Wealth/currency is, again, a representation of commodities
I know. That is why I'm trying to get you to see the IOU's will NOT be a representation of any commodities. It will not be pegged to ANYTHING.

You have the noble intent to help, but the road to hell is paved with good and noble intentions, 
Thanks, but I was only trying to examine a theory, namely that inflation exists only in the mind. But I was unable to get anyone to be able to even imagine a store of IOU's not pegged to wealth, commodities, or services.

The supply of all commodities cannot magically increase overnight,...
OK. I have to accept that you are incapable of thinking outside the status quo.
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#34
ethang5
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@Buddamoose
...currency is a representation of wealth. 
OK. What if you have a currency that is NOT a representation of any wealth? Pegged to nothing?

#35
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@ethang5
OK. What if you have a currency that is NOT a representation of any wealth? Pegged to nothing?

If you remove the representative aspect, currency loses all its value... thus defeating the point of giving people that currency to begin with... you might as well shit in your hand and call it a million dollars, but actually, that would be giving those people more than 1 million of a currency thats not representative of any commodity or service, cause that shit could actually be used as fertilizer for crops... so you actually shouldnt shit in your hand, you should just look at your empty hand, and call it a million dollars... it would be for all pragmatic purposes, the same thing as handing people 1 million of a currency that isnt representative of wealth.

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#36
ethang5
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@Buddamoose
What is Bitcoin pegged to?

What commodity is the Mona Lisa representative of?

Where is the wealth represented by a green card to a Somali?

#37
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@ethang5
What is Bitcoin pegged to?
Actual currency, which is itself pegged to wealth. 

What commodity is the Mona Lisa representative of?
no, the mona lisa is a commodity. Its a commodity that stems from the service of painting. Nobody ever said there wasnt a subjective aspect to wealth. For example, the mona lisa itself is a unique piece that is highly desire, its considered near priceless in its value. Copies of the mona lisa however, are near worthless, because they are not the original. When it comes to art, this is one of the areas where duplication has little effect on the value of the original. Unlike say, with computers, where the original, when duplicated, drops in value as the supply of it increases. 


Where is the wealth represented by a green card to a Somali?
a green card in itself is not representative of any wealth, however, that green card can represent access to better economic conditions and opportunities. For example, as a plumber union membership dues might be in themselves worthless and not representative of any wealth, HOWEVER, the membership within that Union grants you access to the benefits being in a strong union provides, benefits that often equate to an increase of wealth for those that are a part of it, by consequence of having more negotiation power in compensation agreements. 
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#38
ethang5
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@Buddamoose
What is Bitcoin pegged to?

Actual currency, which is itself pegged to wealth. 
Untrue. Bitcoin is not pegged to the country's wealth in any way. Only the duly elected officials of the country can issue currency pegged to the country's wealth.

What commodity is the Mona Lisa representative of?

no, the mona lisa is a commodity. Its a commodity that stems from the service of painting.
Nonsense. Who added it to the country's commodities? It is not tied to the dollar cause it's value changes in ways not related to the dollar.

a green card in itself is not representative of any wealth, 
Thank you. And yet it has a monetary value, though it is not pegged to any wealth.

Each example shows that a thing can have monetary value without representing or being pegged to any wealth. It's value is based on what people think. Perception only.
#39
Stronn
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@ethang5
Because there is only so much milk, and the number of people has increased. Giving people money does not increase the number of people, and allows many to start a dairy business.
You really need to fact-check yourself before posting. Since 1970 milk production has increased faster than the population has grown. Yet the price of milk has still increased tenfold since the 1960's. Since 1970, total food production has averaged 2.3% growth per year, while world population has grown only 1.8% per year. (https://link.springer.com/chapter/10.1007%2F978-1-4615-2195-2_1). Yet the price of food has increased 3.96% per year. (http://www.in2013dollars.com/Food/price-inflation/1970-to-2018?amount=20). That is inflation.
 
That pertains now. How does more income change that? More people can now buy eggs, so note people use their one million to supply eggs. The market balances.
Increase the money supply, and people magically start producing more? Sorry, economics does not work like that.

Untrue. Money is pegged to the wealth of the country. That is how it's value is calculated. What I propose is NOT money.
Look up the definition of money. It is an IOU for goods and services, what economists call a store of value. You haven't proposed anything that in any way is different. In fact, your OP asked if giving everyone a million dollars would solve poverty. If you give someone a million X, and X can be exchanged for goods and services, then X is money. If you can't exchange X for goods and services, then I have no idea what you are proposing.

I know. You said it was not pegged to anything. Money is. This is not money. It isn't resources. It is not pegged to the country's wealth.
Again, if a unit of X can be exchanged for a certain amount of goods and services, then X is money. That is how money is "pegged" to wealth. If you mean something different, then thus far you have not explained it.

Some would, but most people who would quit do not actively contribute to the economy. How many scientists, doctors, researchers, professors, would quit? More people would go to school. The market would quickly compensate and balance.
Actually, many people would riot and bring down any government that enacted such an insane policy.


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#40
ethang5
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@Stronn
Right, the people would riot at being given 1 million dollars each.

Your fingers are firmly on the pulse of society.

If you mean something different, then thus far you have not explained it.
I guess saying, "It isn't money. It isn't pegged to anything. It is not representative of commodities" was unclear.

Thanks Stronn.
#41
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@ethang5
Yes, it is very unclear. In your latest post alone, you say both of the following. 

1. Give people a million dollars each.
2. It isn't money you are giving them.

Sorry, but that is incoherent. No one knows what you mean by dollars that aren't "pegged" to anything. I suspect you don't even know, but have backed yourself into a corner and now are maintaining your position no matter how silly it sounds.

If not, then answer the question of whether whatever you propose giving people can be exchanged for goods and services. Could I exchange it for a set of tires, or a car, or a haircut? If so, then how is it not "pegged" to the value of tires, cars, and haircuts? If not, then what value does it have for anyone?
#42
keithprosser
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@Stronn
Could I exchange it for a set of tires, or a car, or a haircut?

If he has a million dollars in the bank, how much would a barber charge to give you a haircut, especially if he know you also have a million dollars? I don't think he'd do it for a sawbuck!


#43
Smithereens
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@ethang5
This would not be welfare, and would not represent any physical wealth anywhere. Why would it lose value?
Imagine if you were selling lemonade at a stand for $1 a cup and everyone had $10 to use on lemonade. That means everyone is expending 10% of their resources to purchase your lemonade. If suddenly the government came in and gave everyone there $1,000,000 each, one person could buy your product for less than 0.0000001% of their own resources. Because your product is worth 10% of a person's resources, you would have to increase the price of a single cup of lemoade to $100,000 just to maintain the same value. This is called inflation. 

Money is not inherently valuable, it's meant to be a common exchange method. Historically you would trade 2 goats for a plough. If you were to buy the plough for $2, then $1 is effectively the value of a goat. If you injected $1,000,000 then the value of a goat would be $0.0000001 and it would take $2M to buy a plough. 
#44
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@ethang5
What is 'poverty'? Is it not being able to afford the newest T.V. and a DISH subscription? Not being able to afford a smart phone? Not owning your house? Not being able to maintain a house which you do own? Not being able to afford food while homeless? People always want to discuss poverty without discussing what it is. If it's defined in terms of something not finite, if it is defined in in terms of an insatiable desire, then the concerns raised by Smithereens comes into play: giving everyone access to that resource causes the market to restructure itself around that newfound access and sets you back to square one, at best.

I think that the only meaningful conversation that we can have about poverty is based on this definition: can a family, on the land and resources which they own, build capital to leave to the next generation, sustain their own family, and better themselves as citizens through either formal education or self-education? If the answer is 'no', then the last thing that a country with truly moral concerns about poverty should be doing is busying itself with spiritually anaesthetizing the people involved. A person who does not meet those requirements shouldn't be given a T.V. or a smart phone, they should be deprived of them and trained in real-life skills which they can use to improve their lot in life. If they don't have access to the land and resources which they need, society should work to make it available to them. This requires a system other than capitalism, which treats land as a leisure commodity, eventually leading to a permanently dispossessed underclass which is more concerned with the economic treading of water and forms of escape than it is with bettering itself. As long as capitalism exists, this underclass will exist, and will sow within itself the seeds of capitalism's own destruction.

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#45
ethang5
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@Smithereens
Because your product is worth 10% of a person's resources, you would have to increase the price of a single cup of lemoade to $100,000 just to maintain the same value.
Sorry, your scenario doesn't make sense. Products are not priced by percentage of the buyers worth. We do it charge millionaires more for the same products and services.

Plus, your example is about money tied to a country's wealth. That is not what I'm talking about.
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#46
ethang5
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@Stronn
I suspect you don't even know, but have backed yourself into a corner and now are maintaining your position no matter how silly it sounds.
Your bias is interesting, but not to me right now. Words can have more than one meaning.

...answer the question of whether whatever you propose giving people can be exchanged for goods and services. Could I exchange it for a set of tires, or a car, or a haircut? 
Yes.

If so, then how is it not "pegged" to the value of tires, cars, and haircuts?
Ah. You don't know what "pegged" means. Money is not pegged to the value of products, it is pegged to the sovereign wealth of countries. So that a dollar represents one unit of a country's wealth divided by how many dollars there are.

Sorry. I thought any college grad would know this.

 If not, then what value does it have for anyone?
Is your implication that only money has value?
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#47
ethang5
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@keithprosser
If he has a million dollars in the bank, how much would a barber charge to give you a haircut, especially if he know you also have a million dollars? I don't think he'd do it for a sawbuck!
I pity any known millionaire who attempts to buy goods or services from you.

Something tells me the govt does not have dole out dollars for you to have dishonest pricing in your business.

Customers should be charged by the value of the product, not by how much money is in his bank account.
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#48
ethang5
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@ResurgetExFavilla
You may have an inkling of where I'm going.

But if you use land, you are bound to run into trouble. People increase, land doesn't. Sooner or later you reach a crunch.


#49
Smithereens
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@ethang5
that's not what I mean.

Instead of dollars imagine we traded with gold coins. let's say my watch was worth a gold coin, which is the equivalent of a day's wage. Imagine if everyone magically obtained 1,000 gold coins. Would I keep selling my watch for a mere gold coin? No, obviously I would bump the price up because the value of a gold coin has decreased now that everyone has more gold coins. This is inflation, and is the reason why we can't just print out more money senselessly.
#50
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@ethang5
Suppose I was to offer you right now 50,000 dollars for your old car.  You (or most people) would take that deal because 50,000 dollars could well double or triple their wealth and they could replace the car for 5,000 dollars.

But if you already have a million dollars an extra 50,000 isn't such a big deal and not having car is a pain so you'd want a lot more than 50,000 to part with it.    Hence prices will go up massively.  In fact if every body has a million 'dollars' they might feel they don't want any more dollars but would prefer to barter goods.


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#51
ethang5
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@Smithereens
I agree. 

I am not talking about printing money.

The IOU's I am proposing are not divisional units of a country's wealth. It isn't money.

I know why we have inflation. I just don't think we have to have it. We have inflation because we tie money to the country's total wealth. We don't have to.
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#52
ethang5
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@keithprosser
Hence prices will go up massively. 
Yes, they will. But the market will correct. No one will buy your car if they think it's too expensive. Plus, opportunists will always be there to offer the same product for less.

Having a million dollars will not suddenly make people ignore or forget what value is.

...if every body has a million 'dollars' they might feel they don't want any more dollars but would prefer to barter goods.
This seem irrational to me. Millionaires want their money only if no one else has millions?

Bartering happens now. People do not barter because they don't want dollars. They barter for convenience and because they don't have money.
#53
Stronn
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@ethang5
Ah. You don't know what "pegged" means. Money is not pegged to the value of products, it is pegged to the sovereign wealth of countries. So that a dollar represents one unit of a country's wealth divided by how many dollars there are.

Sorry. I thought any college grad would know this.
Why would any college grad know it, when it has not been true since 1971, when we officially abandoned the gold standard? At that time, we went from representative money, which is money that represents some underlying commodity, to fiat money, which is money that is backed only by the say so of government and people's agreement that it has value, not by any commodity. It doesn't sound like you are proposing anything different than fiat money. Please look up fiat money, and tell us how your proposed IOU's would differ.


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#54
ethang5
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Why would any college grad know it, when it has not been true since 1971, when we officially abandoned the gold standard?
It has nothing to do with gold. And I said nothing about gold.

...to fiat money, which is money that is backed only by the say so of government and people's agreement that it has value, not by any commodity. It doesn't sound like you are proposing anything different than fiat money. 
Yet you said no one knows what I'm talking about when I said money that isn't pegged to anything. All of a sudden, you can conceive of pegless money.

Please look up fiat money, and tell us how your proposed IOU's would differ.
Please, there is no need for pretense here, you said...
If so, then how is it not "pegged" to the value of tires, cars, and haircuts?
Money has never been pegged to the value of tires, cars, and haircuts. You went to look it up, found fait money, and now wish to pretend you knew it all along.

You could not have, because you said,
If not, then what value does it have for anyone?
When exactly did you know about...

money that is backed only by the say so of government and people's agreement that it has value,[?]
Fiat money is still considered denominations of the country's wealth, only the value of that wealth is decided by fiat.

What I propose is not tied to the countries wealth in ANY way. How much sovereign wealth the country has makes no difference to it's value.
#55
Buddamoose
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What I propose is not tied to the countries wealth in ANY way.
Then that "money" is worthless and nobody will want to accept it for anything. How is that gonna help? 

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#56
ethang5
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@Buddamoose
Then that "money" is worthless and nobody will want to accept it for anything. How is that gonna help? 
This makes no sense. First, why? You just seem to take it as an established truth. Second, many things have value though are not representative of any other thing.

Value can be based on perception alone. Things will have value if people think they have value.



#57
Buddamoose
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which is money that is backed only by the say so of government and people's agreement that it has value, not by any commodity

This is misrepresentative of fiat currencies. These currencies are still tied to commodities, but rather than it being a single commodity, its tied to the sovereign nations GDP, or the value of goods and services produced in a given year, and the ability of the sovereign state to pay its debts to a degree. The fiat currencies are still linked to a "basket of goods and services", but rather than being a single good such as gold, or two such as gold and silver, everything is included in the basket. 

For example, there are approximately $1.425(in billions) in circulation for US currency alone as of 2015. That is just 7.9% of GDP. Of which the US government still brings in tax revenues of about 4 trillion a year. One may wonder, "how can the US govt bring in 4 trillion in tax revenue yearly, if that is greater than the total dollars in circulation? Because the government spends it all and it immediately goes back into circulation. Plus, though budgets are done annually, revenues and expenses operate either quarterly or monthly as they roll in and that revenue is then apportioned for the various budgeted expenses. 

Basically, even if everyone traded in their dollars for another currency standard, the US could still feasibly cover the cost of such a standard change. But because it is still in good shape, people aren't generally wont to change that standard. 

Before i make another observation, ive got to clarify, is 4,000(in billions and excluding the Yuan) is 4 trillion right? 🤔. Thats the amount of currency in circulation globally excluding the Yuan which is kept undisclosed. Broad money, or non liquid assets, such as properties, is closer to 80 trillion. So if im not mistaken, the entire globe is indebted cause I'm pretty sure global debt totals for all nations combined surpass that 80 trillion mark 🤔

It doesnt actually, as a qhole debt is at 233 trillion as of third quarter of 2017 in total of which national debts are but a part of that.🔥😰, phew, thats alot of debt.


#58
Buddamoose
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This makes no sense. First, why?

Because even fiat currencies are still tied, even if indirectly, to a "basket" of goods and services. If the US didnt create 18.7 trillion and rising in GDP yearly, and instead created nothing, the dollar would be worthless. Its directly tied to the government's backing of it and it's ability to pay debts summarily, which is tied to the tax revenues of that nation, which is itself tied to the GDP(goods+services). Not a direct link, but an indirect one. 

This is similar to your Bitcoin example. Where botcoin is tied to national currency standards, which are then tied in a few more steps to the goods and services being produced. Value still starts at goods and services. No goods and services, no currency value. 

#59
Buddamoose
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Things will have value if people think they have value

And people will think they have value only if the currency they're being handed is exchangeable for goods and services. If you inject 350 trillion of value into the economy overnight, goods and services cannot also, inject 350 trillion worth in that same overnight span. You will have a ballooned supply of money, which will create demand, but supply for.that demand cannot increase anywhere close to as quick. And when supply cannot meet demand, prices rise. They rise too far, that money is effectively worthless and people abandon it. Defeating the purpose of giving them all that money to begin with 🤔

#60
Buddamoose
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Why do you think deflation(price drops) happens when currency supply either remains static or is removed from circulation? Because now there is less money, but a static or increasing supply of goods and services 🤔. That money is worth more in turn. Big issue with that as we all know, is that creates an atmosphere where people are incentivized to not spend and rather hold onto their money. Which creates an economic death spiral