(Drivebycuriosity) - There is a lot talk about basic income. Former Presidential candidate Andrew Yang for instance proposed to give all U.S. citizens ages 18 and over (about 250 million persons) $1,000 per month ( yang2020). The government would spend about $250 billion a month and $3 trillion a year!
I fear this is not feasible today. It would also reduce the incentive to work and reduce the already tight labor supply.
But the rise of artificial intelligence (AI) will fundamentally change the economics. AI will raise productivity of almost any job and compensate for the labor shortage - at least partly.
The increased productivity in manufacturing & many services will reduce prices for manufactured goods - and some services - significantly. It will boost wages in many occupations as well. Both trends translate into higher standards of living.
Higher productivity will also reduce costs in many industries and create higher profits which lead to stock market gains & higher dividends.
These trends - higher wages, climbing dividends, enlarged profits & stock market valuations will boost the tax income of the government significantly in the comings years and so finance the costs of the basic income.
Welcome to the new world of AI.
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