Thread by @OvernightOnline

@James80173070 @RashidaTlaib 1/ Okay I can help with that. This will take several tweets to cover the basics, so bare with me.

How UBI works (in short):

So to start, an explanation ot the flow of currency: many people don't fully understand the flow of currency and how it actually moves in an economy...

@James80173070 @RashidaTlaib 2/ Because of this, "fiscal conservatives" often talk about the importance of avoiding spending money on "wasteful programs". What they usually mean by wasteful is "spent on the poor" because they generally don't value the working poor. This is a group who understands currency's

@James80173070 @RashidaTlaib 3/ movement through an economy, but don't like diverting resources to people they feel haven't earned it. As a result, a narrative about avoiding unnecessary expenses was crafted in order to create a feeling that such programs "waste" currency.

The goal is deliberate deception.

@James80173070 @RashidaTlaib 4/ the currency in an economy is technically finite, its value based on a complex set of factors that can be boiled down to "perceived rarity"/the volume of units in circulation.

Additionally, when we print more, the value hypothetically goes down, unless the perceived value..

@James80173070 @RashidaTlaib 5/ also increases. Because of this balance, countries who print money too quickly without creating sufficient value experience inflation, while countries whose productivity exceeds the rate at which currency is printed experience deflation.

So when people talk about cost in a

@James80173070 @RashidaTlaib 6/ macroeconomic sense (the zoomed out, full-view of money in circulation in a country or on the planet) it matters less the number of units of currency a thing costs, and more what impact that thing has on the perceived value of the currency. With me so far?

So...

@James80173070 @RashidaTlaib 7/ When we decide to, for instance spend $5-6T on a bailout of the stock market, we can get that money in one of 3 ways (2 of which are very similar):

1) we divert funds already in the economy towards the bailout.
2)We get a loan (say, from China or the IMF)
3) We print more.

@James80173070 @RashidaTlaib 8/ now that first option is important, because most of us get the other two. But what we really mean by divert existing funds is: issue a tax. By taxing some sector of the economy (say, big businesses or billionaires), we don't burn that cash, we divert it elsewhere.

@James80173070 @RashidaTlaib 8/ A good analogy comes from how our bodies handle an injury. If I bump my head on a low door (I'm tall in real life, its a problem lol), I'm damaged, & my body sends blood from elsewhere to heal the injury. A bruise forms from the presence of blood but I have not spilled a drop.

@James80173070 @RashidaTlaib 9/ this is how an economy works to repair injuries. We don't burn the money, we divert its flow.

Now I can't control very much about where my blood goes, but our bodies are designed to make sure that it goes where its needed, when it's needed...

@James80173070 @RashidaTlaib 10/ Unfortunately our economic system is not quite as efficient. A lot of the money in our economic veins and capillaries is spent automatically within the economic cells that comprise our body.
But our economic system can do things our body can't: control where the blood goes.

@James80173070 @RashidaTlaib 11/ Sometimes this allows us to put out fires, rebuild after hurricanes, deploy armies, or just cover up potholes.

But all of this capacity for decision making means we often don't put money where it's needed. Money tends to accumulate with those who have the power to keep it.

@James80173070 @RashidaTlaib 12/ when that happens, other areas don't get the blood they need, and this can cause decay, pain, even death for the "cells" (the poor, elderly, small businesses) that suffer from this lack of lifeblood.

@James80173070 @RashidaTlaib 13/ Analogies and monologs aside, THE POINT at last!

So, now that we get that money isn't burned up, but is part of a moving system, a system which can dilute its blood, enrich it, which can divert it (for better or worse) and which can control the ways it chooses to divert it..

@James80173070 @RashidaTlaib 14/ we need to understand what those choices mean. Let's say the head of our economic body represents the wealthy and powerful.

The heart represents the government, the channel through which our currency is pulled from and pumped into our body. Our limbs are the working class..

@James80173070 @RashidaTlaib /15 if I decide to pump all the "blood" in my body to one area or another, my body will not work. If I wait too long, it might even die. Can't move without blood in the limbs, can't think without blood in the brain.

What I need is an efficient system of distribution!

@James80173070 @RashidaTlaib 16/ This is where taxes come into play. In a non-authoritarian or reasonably un-corrupt gov't, taxes (despite what some may think) are not meant to "steal" wealth, but are meant to divert currency where it's needed.

If the poor are starving, we divert taxes into food stamps.

@James80173070 @RashidaTlaib 17/ If investors lack cash to invest in businesses, we might give them a tax break to encourage investment. All these thousands of taxes, investments and bureaucratic systems are there to make sure currency goes where it's needed.

But our system has an illness..

@James80173070 @RashidaTlaib 18/ Like a diabetic or someone with a blood clot, blood is being restricted from reaching vital areas of our economic body. Those areas are imperiled by it.

Today, over 90% of wealth in America is in the hands of the top 10%. You could say all that money has gone to our head.

@James80173070 @RashidaTlaib 19/ So, if our blood can't get where it needs to go, if our arteries are clogged from too much gluttony & junk, we need a Stent. THAT is what social safety nets are all about.

*UBI Explained* UBI is an efficient system that diverts resources directly & evenly to the entire body.

@James80173070 @RashidaTlaib 20/ Unlike other programs that require all these inefficiencies (paper work, approvals, paid employees looking for reasons to cut off access, etc), UBI just sends it everywhere.

UBI is something else, too: an investment. All investments come with risk and reward..

@James80173070 @RashidaTlaib 21/ and when we make an investment, we want to know that the money we use will give us a nice return on investment (ROI). Unlike your 401k, the purpose of a government investment isn't to accumulate wealth. It's to provide services and improve our economic efficiency.

@James80173070 @RashidaTlaib 22/ Now, I've already written a ton and this part can get really tricky. So I'll try to wrap this up and keep it simple.

There are lots of groups and economics experts who study things like food stamps, UBI, tax cuts for the various income levels, and all manner of things.

@James80173070 @RashidaTlaib 23/ Basically we've tested lots of ways to invest in our economy and we've studied how effectively each of these strategies were. We learned which investments were bad and which were good. Know what we found?

@James80173070 @RashidaTlaib 24/ Between tax cuts for "job creators" & social programs like food stamps, the social programs were vastly more efficient. Orders of magnitude more.

The reason is simple: when poor people get more money, they spend it all. Because they don't make enough to live. The rich don't.

@James80173070 @RashidaTlaib 25/ When we keep our money moving, our body is healthy and runs well. Let money accumulate too long and (like a blood clot) we get sick. So social programs are great because we get lots of money moving and being spent. And the more money is moving around, the more jobs we create.

@James80173070 @RashidaTlaib 26/ That's the basics of Demand Economics (look into it if you aren't familiar) more money flowing creates demand for goods, which means more jobs to meet the demand.

UBI, like food stamps and welfare, diverts funds from areas of accumulated wealth & sends it where it's needed.

@James80173070 @RashidaTlaib 27/ Each method of diverting funds has advantages and disadvantages.

For example, food stamps are very efficient because the money is targeted and goes exactly where it's needed. But the drawback is it requires oversight, so it loses some efficiency to pay for that oversight.

@James80173070 @RashidaTlaib 28/ UBI, on the other hand requires zero oversight, and so it saves money there. However, it is not targeted, so it loses some efficiency as a result. But UBI has one key feature that makes it unique to all other social programs: everyone gets a slice.

@James80173070 @RashidaTlaib 29/ unlike unemployment or welfare or other programs that target the poor and unfortunate, UBI goes to every person. This is an effective way to make a program very popular and resistant to tampering. Unlike programs that benefit only the poor, rich conservatives can't touch UBI.

@James80173070 @RashidaTlaib 30/ just like social security, programs that benefit everyone are so popular, any attempt to dismantle it would be political suicide.

While being similarly efficient to other systems of distribution, UBI risen a universal method of making sure everyone has the money they need.

@James80173070 @RashidaTlaib 31/ Some will tell you this will cause prices to just increase as people try to soak up the influx of money, that rent costs will rise, etc. But we've already done studies to see how programs like it affect the economy and just like the propaganda of "we can't afford that!",

@James80173070 @RashidaTlaib 32/ the data doesn't back up *this* assertion either. Because most people won't need to increase prices, as the demand for goods and services will mean they'll already be making more.

So... yes that was a lot. But macroeconomic isn't a walk in the park.

@James80173070 @RashidaTlaib 33/ While no program is flawless, programs like the minimum wage, UBI & others are a vital part of a healthy economy. W/out them, our body will get sick, like it is today.

The sooner we can build programs like UBI into our economy, the sooner we can rebuild the American dream.