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[Dozebôm Lolumzalìs]

I remember my dad telling me about the mental health, prison, medication cycle. Get out, can't buy medication, go half-mad, commit a crime, go to prison, get medication, be fine, repeat. Why is this not KNOWN to people? It's more insane than the poor prisoners themselves!

[smjjames]

Still, other countries which also have a war on drugs don't have the same explosion of prison population. Since the war on drugs is quite selective in which communities it polices, it's more a cover story about maintaining authority over the slums than it is about drug use. It's just more likely that the mentally ill come in the firing line of the authorities than other groups.

I'm referring to the US policy.

I remember my dad telling me about the mental health, prison, medication cycle. Get out, can't buy medication, go half-mad, commit a crime, go to prison, get medication, be fine, repeat. Why is this not KNOWN to people? It's more insane than the poor prisoners themselves!

Part of it is problems with our healthcare system.

[Shadowlord]

again, look up the old EE bonds i mentioned.

ee bonds generate income for both the holder, and the us treasury. establishing methods to create such investments to support the income impoverished solves the monetary source problem, and the benefit of the bonds does not go away when they get jobs. (though they wont get to buy more at the special rate plan once they are stable.)

*googles*

Current Rate:    0.10% through April 30, 2017 (fixed rate)

Um.

The returns on index funds vary significantly depending on the index and market. As an example, the average return of the S&P; 500 stock index for the 10 years ending Dec. 31, 2012 was 7.10 percent. The S&P; 500 index mutual funds from Fidelity and Vanguard produced returns of 7.03 and 6.99 percent annually, respectively. Looking at bond index funds, the Vanguard Total Bond Market Index Fund produced a 10-year average annual return of 5.07 percent, compared to 5.20 percent for the Barclay's bond market index that the fund tracks.

Why would you want ee bonds instead of investing in index funds? (Ignoring, for the moment, the problem of "and who is paying for this?")

[Reelya]

The core issue is to increase labor demand in areas with excess labor demand. The problem with "you should invest in bonds" is that "investing in bonds" requires that some people live off the bond investment, and others work to provide the profit on those bonds.

Part of the cause of the Great Depression, was trying to turn 100% of the society into shareholders. The problem is, not everyone can be the guy skimming off the top. It's not sustainable. "Everyone has investments that skim 10% of the labor of everyone else" has a clear paradox there: the 10% will approach a limit of 0%, as your share of the bonds will tend to approach your total labor output, and the amount skimmed from you and the amount you skimmed will approach equality.

[wierd]

reelya: you give them very attractive special interest rates. only available to impoverished and at risk households.

when you pay in 100$, and get 8$ a month back, forever, (example, have not run the math), for every week you do this, the breakdown looks like this:

month one, out- 400$, in, 32$
month two, out 400$, in 64$
month three, out 400$, in 96$
month four, out 400$, in 128$
month five, out 400$, in 160$
month six, out 400$, in 192$
month seven out 400$, in 224$
month eight, out 400$, in 256$
month nine, out 400$, in 288$
month ten, out 400$, in 320$
month eleven, out 400$, in 352$
month twelve, out 400$, in 384$
month thirteen, out 400$, in 416$
...
month 24, out 400$, in 768$.

in two years, this "sweet assed deal" starts paying YOU money, and will continue to do so for 30 years. even when you get a better job.

the 9600$ total payed is used to help fund the government, perhaps to subsidise and attract more takers of the plan, perhaps to offer 50% matching.

combined with debt relief, and other remedies, it can very well bootstomp poverty.

edits, math is fun.

8% apw is pretty extreme, but this is welfare, and convinces recipients to fund the very system they are using.

[Reelya]

this is approach quackery now, it's not even worth discussing how unaffordable that is.

effectively, you're saying "just print money" right there, because the artificially high interest rates you're offering are going to rapidly overburden the treasury.

[smjjames]

So, after two years, incentive to suddenly not work? Unless of course, working is a requirement, with some buffer time in case you unexpectedly get laid off or something.

this is approach quackery now, it's not even worth discussing how unaffordable that is.

effectively, you're saying "just print money" right there, because the artificially high interest rates you're offering are going to rapidly overburden the treasury.

Then how do we solve poverty then without going into quackery or otherwise being in a post-scarcity society?

[wierd]

reelya, the fed magnifies money at a much higher rate than that.

forr every dollar you have in a  bank, the fed lets them lend 9 out, and that money appears from nowhere.

true story.

[Reelya]

Well the core poverty problem is that labor demand is too low, and labor supply is too high.

Cutting minimum income is one proposal but it has aspects that both boost and slash demand.

A better way would be to focus on proposals that increase the amount of times the same dollar flows around the community, since a core problem is that money leaks out of poor areas too quickly. Lower minimum wage makes it more attractive to employers, but it also has the negative effect of reducing the spending potential of each person in the community.

reelya, the fed magnifies money at a much higher rate than that.

forr every dollar you have in a  bank, the fed lets them lend 9 out, and that money appears from nowhere.

true story.

but that is less inflationary than what you're proposing. When the fed loans money out, more money comes back than the loan amount. Which is not inflationary in the long run. Just throwing money at people to keep is inflationary, so your proposal would see prices skyrocketing for everyone.

[smjjames]

Well the core poverty problem is that labor demand is too low, and labor supply is too high.

Which is part of the reason for the rise of populism. And that labor demand is only going to get lower as automation increases.

[Reelya]

How many jobs did computerized CNC milling actually replace? Probably a lot I'd say. I'd say it's likely that one person doing on of those jobs replaced 50-100 jobs that existed before those did. So it's all well and good to advocate "up by your bootstraps" for everyone to get jobs operating the machines that are replacing everyone else's jobs, but that's just not realistic.

[wierd]

no. still one operator to one machine. what it reduced was skill needed by the operator, and rate of scrap. this allows much higher volume produced, and reduced unit costs to economies of scale.

being a machine operator used to mean very specific, hard trade skills. Now it is a button pusher. kids out of highschool can do it in a week.

programming the machine though? that is where the skillset needed still applies, because now I am doing the job of the tool and die man.

compare:

gemcutter with a loupe and a tiny chisel- low repeatability, high skill needed. expensive to cut jewels, one cutter per stall.

programmer for gemcutting machine, needs to think like the old time gemcutter to position the machineLs chisel where it needs to be for optimal result.

operator of gemcutter machine positions gems in the cutter, runs the program. still one operator per stall. much cheaper wages, way better repeatability, much less waste.

on the bonds idea, you are taking real money in every week (400$ a pop), and have big penalties for removal.  this is not a checking acct, it is more like a hybrid CD. you dont take that money out again. the fed can loan out that money as investment capital.

[smjjames]

Or you take a legendary gemcutter and stick them in a gemcutters workshop and let them churn away.

I know we were having a serious discussion, I just thought I'd run away with the gemcutter bit, heh.

edit2: What's a hybrid CD? I keep thinking CD-Rom....

[Reelya]

Also, wierd, you seem to not know how banking works:

for every dollar you have in a  bank, the fed lets them lend 9 out

The law prevents them loaning out more than that. It doesn't "let" them do anything. Without the reserve regulations, banks would loan even more out.

that money appears from nowhere.

Well, no. The bank puts that money into your account. Which is a liability from the bank to you. i.e. the bank makes a note that they owe you the money they put in your account, and they separately note the amount that you owe to them. It "comes out of nowhere" by coming out of the bank's profits.

[wierd]

should have been .9$ out, but that .9$ is most frequently deposited in another bank, which can lend out 90% again....

the usual calculus is that for every 1bn printed by the fed, 10bn is created by the banking industry.

out of nothing.

https://mises.org/library/money-multiplier-myth-or-reality