Tag Archives: USA

Yanis Varoufakis on Universal Basic Income

Guaranteed Minimum Income, Universal Basic Income and Universal Basic Dividend

In the midst of the worst global pandemic since the 1918 flu ‚ÄĒ¬†inappropriately named Spanish flu, since it didn’t originate in Spain‚ÄĒ¬† some countries such as the USA are implementing economic emergency measures or, if you like, actions, to prevent millions of citizens from going bankrupt. In a sense, it could be argued that it is similar to a Guaranteed Minimum Income.

Meanwhile, the European Union, to put it mildly, doesn’t cut the mustard and is disappointing everybody once again: uncoordinated, lacking in solidarity, aimless, drifting… In one word: lame.

It is in this context that we should listen to the ones that got it right during the last financial crisis; people like Yanis Varoufakis, an eminent Greek economist, academic, philosopher and politician.

But before going into further details, we should know what we are talking about. First of all, we must distinguish between the Guaranteed Minimum Income (GMI) and the Universal Basic Income (UBI). Afterwards we can tackle the Universal Basic Dividend brought forward by Professor Varoufakis.

Guaranteed Minimum Income (GMI), also called minimum income, is a system of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions. Eligibility is typically determined by the following: citizenship, a means test, and either availability for the labor market or a willingness to perform community services. The primary goal of a guaranteed minimum income is to reduce poverty. If citizenship is the only requirement, the system turns into a universal basic income.

On the other hand, Universal Basic Income (UBI) is a model for providing all citizens with a given sum of money, regardless of their income, resources or employment status. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens.

That said, let’s pay close attention to what Professor Varoufakis has to say:

So, according to the renowned economist, the Universal Basic Income shouldn’t come from taxation, since it might become a source of conflicts within the working class. He points out that nowadays capital is socially produced, so he brings forward the idea of a Universal Basic Dividend where a percentage of shares of all companies should go to a public equity trust that works as a wealth fund for society. The dividends should be distributed to every member of society equally, so the income comes from return of capital, not from taxation.

Contrary to what many may think, Varoufakis is for a global governance. He is not against free trade, but he stresses that it should be accompanied by binding rules in order to avoid social dumping.

One thing is for sure: something must be done, asap. Countries can’t just let their people and SMEs go bankrupt overnight. We might be about to face the worst economic crisis since the Great Depression, and this pandemic and its consequent lockdown could take a while. Util we don’t have a vaccine, what can’t be cured, must be endured, and unprecedented economic measures must be put into effect. A more egalitarian society fits everyone, since it means a more stable, safe, human and prosperous society. For once, let’s be smart. We are in this crisis together and we will come out of it together. There is no other way.

Recommended posts:

Cataclismo financiero mundial si EE.UU. no eleva el techo de la deuda

En el país norteamericano, la ley pone límites al endeudamiento del Tesoro. Si los dos partidos de la primera potencia económica no llegaran a un acuerdo para elevar el techo de la deuda, habría una debacle económica sin precedentes a nivel planetario.

Imaginaros por un momento que EE.UU. no abonara los intereses de la deuda. Que el país más endeudado del mundo no pagara los intereses de su deuda sería, ni más ni menos, una catástrofe mundial. Se desataría el pánico en los mercados.

¬ŅPor qu√©?¬†¬†La deuda del Tesoro es el activo libre de riesgo m√°s usado del mundo en las operaciones de garant√≠a, adem√°s de ser la referencia para los fondos de inversi√≥n y las carteras de activos de los bancos.¬†Ante esta de momento hipot√©tica situaci√≥n, ¬†la reacci√≥n de los inversores probablemente empeorar√≠a a√ļn m√°s los problemas, con las subsiguientes ca√≠das en la Bolsa, posibles salidas de efectivo de los fondos del mercado monetario y de renta fija. Los balances de los¬†bancos¬†tendr√≠an entonces grandes cantidades de deuda en riesgo. El impago ser√≠a un desastre planetario nunca antes visto de casi imposible soluci√≥n.

Estas semanas de parón pueden suponer un descenso de entre el 0,2 y el 0,3 del PIB estadounidense. Hasta que no  se aprueben los presupuestos en EE.UU, bloqueados por los congresistas republicanos, el Gobierno Federal no dispondrá de fondos y los funcionarios del gobierno no cobrarán su sueldo. Sólo se mantendrán los servicios esenciales y se pagará a los soldados en servicio. No es la primera vez que se da una situación como esta en el gigante americano adicto a la deuda.

En el fondo, los republicanos, que controlan la cámara de Representantes, utilizan esta arma como chantaje para que la administración Obama retire la reforma sanitaria. Un parón como este ha ocurrido varias veces en la historia de EE.UU. Personalmente no creo que se llegue a esta situación porque, simplemente, no interesa a nadie.

Techo de la deuda: Debt ceiling   Fondos de inversión: Investment funds   Cartera de activos: Asset portfolio   Renta fija: Fixed-income