Spain Announces Guaranteed Free Money: What's Really Going On?

Mish

Spain is about to implement Universal Basic Income. But's let's put the correct label on what's happening.

Universal Basic Income

Please note Spanish Government Aims to Roll Out Basic Income

The Spanish government is working to roll out a universal basic income as soon as possible, as part of a battery of actions aimed at countering the impact of the coronavirus pandemic, according to Economy Minister Nadia Calvino.

Social Security Minister Jose Luis Escriva is coordinating the project and plans to put some sort of basic income “in place as soon as possible,” with the main focus on assisting families, Calvino, who also serves as deputy prime minister, said in an interview Sunday night with Spanish broadcaster La Sexta.

But the government’s broader ambition is that basic income becomes an instrument “that stays forever, that becomes a structural instrument, a permanent instrument,” she said.

Honest Thieves

At least the Spanish government is honest about its redistribution thievery.

They do not all pretend that it's temporary.

Honest Theft*****™*** is the best one can hope for these days.

Guaranteed Free Money™

Rather than labeling this Universal Basic Income (UBI), I propose Guaranteed Free Money™ (GFM)

The money is not really free, however. Government will tax the hell out of everyone then return a portion to everyone.

Of course, some people will put in way more than they get back.

So this is really a redistribution scheme that robs the middle class and upper classes then redistributes the money to everyone to make it appear like a "universal" benefit.

Then again, the MMT crowd will propose this really is "free money", that taxes don't have to be collected, and we can all live in a fairy tale economy of Guaranteed Free Stuff™ (GFS).

Guaranteed Free Stuff™

  1. Guaranteed Free Money
  2. Guaranteed Free Healthcare
  3. Guaranteed Free Education
  4. Guaranteed Jobs
  5. Guaranteed Standard of Living

In case you are wondering "What can possibly go wrong?" please look at Venezuela, Cuba, or Zimbabwe for some extremely likely answers.

Meanwhile, I have a suggestion: Buy Gold.

For discussion where and how, please see No WSJ, Gold is Not the New Unobtanium: Where to Buy?

Also see Gold's New Breakout is Very Bullish: Here's Why

Mike "Mish" Shedlock

Comments (83)
No. 1-23
stillCJ
stillCJ

Editor

Finland already tried an experiment with Guaranteed Basic Income recently. They found out it does not work as intended and they quit it. BTW Mish, don't forget Free College for Everybody (including non-citizens if the democrats have their way). That reminds me of a middle aged "pool guy" I know who claims to have 2 college degrees.

WildBull
WildBull

The natives are getting restless. No income, but still need food and shelter. Social unrest -- coming to a neighborhood near you.

Sechel
Sechel

Spain is part of the E.U. and uses the Euro. They can't simply print more Euros like the U.S. can print dollars, so it is simply not possible for Spain to engage in an MMT style policy.

hmk
hmk

Even those with income are becoming restless. Today the gov of MI decided to extend the lockdown until 5/1 from 4/15 with a warning that it may last 70 days. This is bullshit. I hope there are organized protests if she decides to go longer. WTF will happen when it reemerges once or twice more. I am beginning to think something else is up here if the govt keeps extending this out. At some point, 5/1 at the very latest allowing people to go out with appropriate PPE and work with social distancing should be enough.

Bam_Man
Bam_Man

Germany may have to go back to the Deutschmark and let the ECB print like The Reserve Bank of Zimbabwe for all the remainers.

Ted R
Ted R

As we all know nothing in life is free or guaranteed. There are several ways to deal with an economic collapse, overvalued stock markets, and deflation and so far no government that I am aware of has found that solution, including the United States.

AbeFroman
AbeFroman

How about Guaranteed Inflation Credits?

JonSellers
JonSellers

A guaranteed basic income is better than mass starvation when people don't have a way of making a living. But don't make it permanent. We see what happens to societies when money is free: you get a permanent underclass from welfare payments, and a permanent overclass from Fed bailouts. Both equally as useless.

abend237-04
abend237-04

I remember from Gibbon's The Decline and Fall of the Roman Empire: Before the fall, he had 25% of Rome's population going daily to the markets to pick up "free bread," being made by African slaves.
To me, the slaves here look suspiciously Germanic. ECU collapse, anyone?

Stuki
Stuki

IF you are going to engage in any, whatsoever, form of redistribution, the more universal and purely mechanical, the better. Compared to the redistribution done by The Fed, by zoning/land use laws, by arbitrary lawsuits, by Ricky Retardo "IP" Hail Marys, by "promises" and all the rest of the progressive absolute idiocies which the drones are indoctrinated to believe serve some some sort of useful purpose these days, this particular means of redistribution, is downright Libertarian and enlightened. As well as comparatively economically efficient.

The only additional requirement being, that all income such obtained can not be garnished by any process. Not fines, not fees, not debt payments, not back taxes, not payment for incarceration nor hospitalization, not unpaid rents, not "child support" nor alimony, not unpaid utilities etc.. eyc. Unless you ensure that, all you are doing is just redistributing the money right back to the same leeches which are currently getting everyone's incomes redistributed in their direction. Negating the whole "safety net" purpose of the scheme.

Problem is, it still needs to be paid for. Which means, it's not even remotely sustainable, unless it is formulated as a share of state income. If you do that, say, mechanically redistribute 30% of last years government receipts equally to all people, or all adults, or all adult males or what have you, you have the best of all possible setups for a government provided "safety net" you can possibly get.

Now, assuming you do manage to keep to those strictures (fat chance in the DumbAge...), you can then get rid of all the rest. People have their fundamental needs taken care of, so stop screwing around with all manners of other economically destructive idiocies. From FDIC to pension bailouts to minimum wages to propping up the so called "savings" which the idiot army have been told their depreciating shacks magically are some component of. If the Citizen Salary/UBI/what-have-you provided is good enough for Joe Homeless, it's good enough Jill Public Union Retiree, Jimmy landlord and John Q Once-Was-Privileged-Leech as well.

MericanPatriot
MericanPatriot

Universal Healthcare frees people to switch jobs, take charge and channel their entrepreneurial spirit. Universal College provides the opportunity for everyone to have an education so they can be a productive member of society. Both of those are staples in developed countries and work pretty well.

Universal Healthcare achieves economies of scale, huge savings and better outcomes.

Universal College allows for competitive entry into the best schools without burdening students with debt. Which, like above, also allows better job independence and the ability to take risks.

Gates and Zuch, while bright and talented people, leveraged ability to take risks (due to the large family safety net) to get where they are now. Imagine the economic benefits in allowing that for everyone.

If you don't know how we are going to pay for it, you're not paying attention.

Herkie
Herkie

This will be interesting actually. As a EZ member they can't really do this without ECB going along with it, but that is opening a huge barn door for disaster for the Euro.

RonJ
RonJ

But the government’s broader ambition is that basic income becomes an instrument “that stays forever, that becomes a structural instrument, a permanent instrument,” she said.

There is no forever in a world of cycles.

Glass-Steagall was installed so that 1929-32 couldn't happen again.
It was dismantled when it got in the way.

Stock buybacks used to be illegal, then were made legal again.

The Year of Jubilee was a reset. Kondratieff Winter is a reset. The Fourth Turning is a reset. There is no avoiding a reset. A cycle always comes back to ZERO degrees.

A basic income plan will never be permanent.

thimk
thimk

I am not surprised , when a society fails to implement free market capitalism, guns over butter policies , increased government ; claw back ensues .

Max67
Max67

The road to hell is paved with good intentions. I have experienced the hell of socialism in India and other developing countries. The Pleasantvilles (Scandanavian countries) will end soon

killben
killben

We have all been taught wrong. Money does grow on trees. Whenever needed and in abundance if so required. Ask the politicians and central bankers, the crackpots leading the show.

Tony Bennett
Tony Bennett

"Then again, the MMT crowd will propose this really is "free money", that taxes don't have to be collected, and we can all live in a fairy tale economy of Guaranteed Free Stuff™ (GFS)."

...

Pure nonsense from ivory tower types.

You won't even have to open the window to hear "Take this job and shove it!" cry of millions of minimum wage types when they receive their loot. Many businesses will lose a wide swath of their work force and close. Economy grinds to a halt ... along with tax revenues. Free money folks will be dismayed when they go to McDonalds ... and find it closed.

obstruksion
obstruksion

Don't forget Guaranteed Free Food. This will be popular in the coming months.

WildBull
WildBull

Der Weg zur Hölle ist mit guten Absichten gepflastert

tonicandgin
tonicandgin

It won't be temporary here either, Mish. MMT is coming and along with it UPI and single payer healthcare. Inflation by any means. It's the only move that allows them to avoid immediate checkmate.

Aingles
Aingles

Hello, I’m Spaniard and your article is BS. Our Government said nothing of what you have stated above. In fact, you have absolutely no clue about Europe, socialism or Spain.

We are very proud of our free health care and education. We will defend it until the end. Just like France, Portugal, Italy, UK, Ireland, Norway, Sweden, Findland, Poland, Austria, Belgium, Greece and so on. They all have free health care and education.

In fact, the ones that love to follow the American style is countries like Congo or Bangladesh. They copied and paste your style.

Do you even know where Spain is? We are in Europe.

TheWindowCleaner
TheWindowCleaner

Here's the way of the future for all of you guys who are so terminally orthodox. A modern debt jubilee follwed by a universal dividend of $1000/mo. and finally and paradigm changingly a 50% discount at the point of retail sale every penny of which is rebated back to the merchant giving it to consumers by the monetary authority. Voila' end of scarcity of individual demand, of busness revenue and not only the end of inflation, but the libertarian wet dream of beneficial price and asset DEflation...all in one fell swoop. Of course, because the world is not an entirely rational or ethical place, like every system it will require regulation like if you inflate despite all of the cost savings the above policies will bring you (greatly reduced personal and corporate taxes, elimination of all transfer taxes for welfare, unemployment insurance and social security as well as doubling the actual amount of potential business revenue for every businesse's products and services) you will get taxed 100% of any revenue your inflated prices may have brought you. If you are such an anti-social friggin' idiot that you keep on inflating then you will lose your rebate privileges which means you have to get 100% of your price while your competition only needs to get 50%. How would that work out for you?

The discovery of the potential efficacy of a discount/rebate policy at the point of retail sale is the telescope, agriculture and animal husbandry of economics. In other words its the new tool and/or insight that accomplishes a new paradigm.

Okay boys, now that I've stimulated all of your orthodoxies and pre-conceived notions you can have at me. I can already hear the minds clanking shut.


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