Universal Basic Income

Column #323    November 12, 2021

Our health and well-being are dependent on very complex, interrelated systems. Just as the universe of galaxies, our own solar system, our little planet, and our own bodies are all tied together in a delicate balance of moving and living parts—so is our economic system that governs our food supply and other essentials required for survival.

Even though many economists think otherwise, economic outcomes are not something that can be calculated with certainty like in the physical sciences. In chemistry, reactions can be reproduced precisely. In mathematics, the combinations, subtractions, multiplications, and divisions of units are predictable. In physics, weights and measures are calculable therefore outcomes are certain. But economics is a social science—and that’s different because it deals with people and that involves emotions.^{1 2}

The economists at the Federal Reserve Bank and in the federal government tend to think perpetual prosperity can be mechanically controlled by manipulating interest rates, reserve requirements, money supplies, taxes, loans, subsidies, laws, tariffs, and mandates. Unfortunately, after 108 years of experimentation following the creation of the Federal Reserve in December 23, 1913, the consequences of their utopian ideals have created dismal outcomes for the majority of Americans.

After being very stable for more than 100 years, the U.S. Dollar lost over 95% of it’s purchasing power after 1914. Debts as a percent of economic activity have grown unchecked to unprecedented levels for governments, corporations, and individuals. The increased financial risks are a burden on all debtors. After many decades of monetary stimulation and debasement, economic activity remains sluggish and the balance of trade continues to hemorrhage red ink. In fact, as each decade passes it takes more and more debt to get less and less growth. We’re now at a point where interest rates are near zero on the riskiest pile of debt in our country’s history, price inflation is flaring up, and the central bank and Federal government are both pushing funny money into the hands of consumers, corporations, states, and even foreign governments as if money grows on trees. Milton Friedman’s metaphor of “helicopter money” has arrived.³

Looking back we can see that the more the federal government and its central bank tried to influence economic activity, the more they messed it up. Their goal of perpetual prosperity is noble, but their actions have resulted in a gigantic cycle (bubble) dwarfing all of the smaller, yet still painful, cycles that unwound preceding 1914. And its today’s highly leveraged financial environment perched on the pinnacle of 15 years of unprecedented monetary stimulation that makes the recent changes in government policies very concerning for the future health and well-being of all Americans.

Even before the new administration took over in January 2021, woke policies were created in response to pandemic motivated shutdowns. Maybe the worst was paying people way more to stay at home than they could earn when they worked. Other disturbing policies involved the closing of schools and places of employment, prohibiting entertainment, sporting, social, and religious venues. The suspension of rent payments was another doozy. Those policies were followed by everyone with a child being given a monthly stipend whether they needed it or not. Commencing in January 2021, many additional policies impacting commerce were decreed. Infrastructure projects such as the Keystone pipeline, the border wall, and oil drilling on government lands were stopped. People were fired from jobs because they didn’t get vaccinated. Police forces were trimmed back. All of these decrees caused self-induced calamities. This isn’t a political observation. It’s a business/financial/survival observation.

Economics is a study of how people deal with scarcity in trade. In other words, people need food and water, shelter, sufficient rest, social connection, and the opportunity to learn and the potential to fail. For their needs, which they prioritize, they or someone close to them must part with labor which means working now or by drawing down their savings acquired from when they did work.⁴

If a government or bank just prints money, which represents work, and hands it to people, the desire to work to acquire needs is diminished. At the same time “free money” increases the demand for services and goods that are automatically in short supply because they’re not being produced in sufficient quantities because of a labor shortage. The perceived scarcity of goods, services, and labor bids up their prices. The handouts have rapidly created market distortions that in turn dislocated the delicate balances that existed only 18 months ago.

Scarcity causes panic-induced hoarding which only exacerbates the shortage. We are seeing it daily as the prices of everything increase. In October the official Producer Price Index increased 8.6% year over year and the Consumer Price Index increased 6.2% year over year. Unfortunately, real inflation rates are actually more than the government’s massaged figures. And keep in mind that inflation is a regressive tax on the entire population.

Compounding the monetary stress impacting many Americans are the cultural changes being forced upon them. The woke crowd knows it only has 12 months left to put in place the political and social changes it wants. The military services and many of our schools and universities are already teaching CRT and inclusive ideology (gender acceptance). Some states are still pushing to defund the police as they defend groups such as BLM and Antifa. Basic truths are being cancelled and we’re supposed to believe asininely woke notions.

Even the Federal Aviation Administration got into the act the other day by saying: “To lead the aerospace industry into the next century, the FAA must actively promote values of DEIA [diversity, equity, inclusion, and accessibility]. The words and language that we use in all communication channels, both for internal and external use, as well as rules, regulations and associated policies and guidance, must match this objective.” These new definitions and rules will apply to everyone involved in civilian aviation. In nearly all other occupations, newspeak is being forced upon people by the mob’s cancel culture environment.⁵

The passing pandemic is also being used to force universal conformity and set the stage for marginalizing those who do not want to comply with government dictates. Many unvaccinated people employed by institutions such as the military, police, hospitals, government, education, scientific, athletic, and large companies are being forced out of their jobs by vaccine mandates. The pressure is so great even many religious institutions have bowed and are adopting cultural changes. These tactics to eliminate dissidents is typical of the early stages in the establishment of all fascist and communist dictatorships throughout history.

Is all this transitory? Not likely. As mentioned above, the elites have just 12 months to finish their work and force all Americans to march to the tune of their one drum. To keep the upward pressure on inflation Congress just passed a $1.2 trillion, pork-laden, infrastructure (soft and hard infrastructure) plan with the help of 13 Republican congressmen. There’s also their belief that mankind can quickly stop global warming by abruptly changing the world’s power grid to solar and wind—nuclear being ignored. Changes of this magnitude are very complex and their impacts on mankind are being understated. The transition certainly won’t be smooth by forcing small fossil fuel energy producers into bankruptcy as has been suggested.

Amazingly, two years ago Congress couldn’t pass Trump’s $1.5 trillion plan that would have cost the government only $200 billion because it would have required state and local governments to match federal funds by at least a four-to-one ratio. This new $1.2 trillion plan, to be funded with newly created borrowed money, only puts more pressure on the overwhelming demand for good, services, and labor while increasing the debt.

This confirms how weak the constitutional representatives have always been in compromising with the devil. For more than 100 years, so-called Constitutionalists have compromised with the devil by growing the Federal government. That has increased its control over the people and the states beyond the limited powers granted to it in the Constitution and Bill of Rights.

The Constitution and Bill of Rights, drawn up by our nation’s founding fathers, along with God’s natural laws have preserved the rights of all American citizens to make their own decisions on their basic needs of food and water, shelter, sufficient rest, social connection, and the opportunity to learn and the potential to fail. And maybe the last need is most important. As Thomas Edison said, “Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.” It’s said that he had 10,000 failures before inventing a working light bulb. His response to that was: “I have not failed. I've just found 10,000 ways that won't work.” On the other hand, if the government had told him what he could and could not do, we’d still be in the dark.

The Rule of Law is incredibly important. Throughout history, societies flourished when laws were fair, predictable, and evenly applied. That’s the only way people and businesses can plan and confidently invest in the future. When the Rule of Law is weak and corrupt, societies collapse into chaos as lawlessness reigns. This is why a corrupt government is so dangerous. Their laws only work for the elites, consequently the society collapses like in Cuba, Venezuela, Haiti, and many other countries.

An inflation rate of 6.2% means the dollar’s purchasing power is losing 6.2% per year. The result is that no one in their right mind wants to lend money to our government by buying its five-year, dollar-denominated Treasury Notes that only pay 1.23%, or worse, the three-month Treasury Bill that yields 0.43%. That means higher inflation rates will force up interest rates and that will have grave consequences in our highly leveraged economy. The central bank is aware of this and knows it has painted itself into a corner.⁶

The national debt is $29 trillion. At 6.2% the interest on that debt is $1.8 trillion dollars. Federal tax revenue is only $4 trillion per year. The difference doesn’t leave much cash for anything other than paying bureaucrats and social services. Every American must watch the Debt Clock. Being ignorant about what’s going on in our country is no longer an option. Our government’s policies, put in place by our elected representatives and their hired bureaucrats, impact our health and well–being.⁷

Here’s some economic “laws” we can rely on.

1. “When resources are limited and needs are unlimited, it raises scarcity.”
2. “There ain't no such thing as a free lunch.”⁸
3. “Gresham's Law: Bad money chases out good money.” This means people will spend the bad money and hoard the good money.⁹

To your health.

Ted Slanker

Ted Slanker has been reporting on the fundamentals of nutritional research in publications, television and radio appearances, and at conferences since 1999. He condenses complex studies into the basics required for health and well-being. His eBook, The Real Diet of Man, is available online.

Don't miss these links for additional reading:

1. Often asked: Why Economics Is Considered A Social Science? From Illinois Social Science in Action

2. Why Is Economics a Social Science?

3. Helicopter Drop (Helicopter Money) by Akhilesh Ganti from Investopedia

4. Six Fundamental Human Needs We Need To Meet To Live Our Best Lives from Forbes Magazine

5. FAA Holding Inclusive Language Summit from Plane & Pilot Magazine

6. A New Era of Stagflation? by David P. Goldman from American Institute for Economic Research

7. U.S. Debt Clock

8. There Ain't No Such Thing as a Free Lunch (TANSTAAFL) by Alexandra Twin from Investopedia

9. Gresham's Law from Wikipedia