[ExI] Income and services for the underemployeed or unemployed

deimtee deimtee at optusnet.com.au
Tue Apr 21 13:23:46 UTC 2009


Emlyn wrote:

>2009/4/21 deimtee <deimtee at optusnet.com.au>:
>  
>
>>Emlyn wrote:
>>
>>    
>>
>>>---------
>>>
>>>Since I wrote that, I feel more convinced that universal income
>>>doesn't quite solve the problem that it wants to solve. In particular,
>>>people get into debt, so easily! A lot of people with newfound
>>>universal income will immediately swap it, as balancing debt, in
>>>perpetuity, for some frivolous short term gain (extra cash, a holiday,
>>>a big car?). Of course individual choice is good, but you know this is
>>>going to happen en-masse almost immediately, and then the enterprise
>>>has failed before it has begun.
>>>
>>>
>>>      
>>>
>>A way to counter this would be to make bankruptcy easier to declare, and
>>exempt some types of asset from bankruptcy confiscation - primarily the
>>principal residence and one vehicle.
>>It should also be impossible to re-assign payment of the basic income.
>>Anybody who would then lend them money against future basic income is taking
>>a suckers bet.
>>If they have enough other assets to make a loan reasonable, then their debt
>>is not a problem.
>>
>>
>>-David.
>>    
>>
>
>Does this actually work? I get the impression there was a lot of easy
>bankruptcy going on in the US just before the subprime thing hit.
>
>  
>
I think it would work as long as lenders don't get bailed out :)
It would make lending to someone against their basic income a losing 
proposition, as they could always walk away and start over if things got 
tough.  Any lender who did that would swiftly run out of money, as 
people took their big holidays, gambling sprees, etc. then walked away 
from their debt. 

It also puts the onus back on the lender to properly vet the loans. 
(where it should be in my opinion)

A side benefit is that, for financers, loans for productive investment 
would become much preferred over loans for consumer debt.  I think this 
would be a major economic/investment stimulus.

Of course, it doesn't help with the really bad cases where the loan 
security is functioning kneecaps.

-David.




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