This is an excerpt. To hear the full interview with Andrew Yang, please click the Soundcloud or Youtube links.
No matter which side of the aisle you sit on, you know one thing for sure – for the last two years, the politics in the United States have been wild. Never before in recent history have tensions run quite so high. Old precedents are being shattered and the future is less clear than it has ever been.
As the old saying goes, drastic times call for drastic measures. This chaotic time in American political history has swung the door open for significant change and real disruption.
Enter Andrew Yang, tech-entrepreneur turned presidential candidate. Yang has thrown his hat into the ring for the 2020 election, running on some unorthodox – or perhaps revolutionary – ideas.
Perhaps the strongest pillar of Yang’s campaign is the proposition of a Universal Basic Income (UBI). Recently, Finance Magnates spoke with Yang about his campaign and how cryptocurrency and blockchain technology could play an important role in his vision for the future of the American economy.
Addressing Logistics: Yang Explains How a Universal Basic Income Would Be Possible
How would the US government finance a UBI? “The headline cost is a little bit more than $2 trillion per year, which sounds a lot,” Yang said. “But our economy has grown to $19 trillion over the last number of years. It’s up $4 trillion in the last 10 years alone. The US is now the richest and most advanced society in the history of the world, even though we’re not really showing that in our standard of living or life expectancy and other measurements.”
Yang proposed that a large chunk of the funding would come from the re-organization of pre-existing welfare programs.
“The big move that the US has to make is that the beneficiaries of new technologies – AI, software, autonomous vehicles – are going to tend to be very big, rich tech companies, who are not paying a lot of taxes. They tend to push their taxes through Ireland or some other tax shelter, and the public doesn’t see much of it.”
I’m running for President on a platform of Universal Basic Income, Medicare for All, and evolution to a human-centered economy. Here’s my speech to 1,000 Democratic Activists in Iowa. https://t.co/V8t1kxR2jW
— Andrew Yang (@AndrewYangVFA) September 5, 2018
So, Yang proposes that the US needs “to join every other industrialized economy in the world and have a Value Added Tax (VAT),” he said. “Because our economy is now so vast, a VAT of half the European level would generate about $800 billion in new revenue for the US.”
“Right now, 50 percent of Americans can’t afford a $500 unexpected bill. Most everyone is living paycheck to paycheck, week to week. So if you put this money in their hands, they’re going to spend the vast majority of it in the economy – it’s going to create four and a half million new jobs…and then the government gets back 25 percent of the economic growth in new tax revenue, and that adds another $500 billion.”
Yang added that eliminating childhood poverty is also projected to add another $700 billion to the GDP per year based on increased productivity and reduced civil and medical costs associated with it.
Dispelling Arguments Against a Universal Basic Income
We asked Yang to address concerns that a UBI would cause insane price inflation for everyday items, like food and utilities.
— Andrew Yang (@AndrewYangVFA) September 24, 2018
“It’s really an overblown concern, honestly,” he said. “Really, if you look at the causes of inflation in the US, they tend not to be around increased purchasing power – they tend to be around distorted marketplaces, like education or health care, or housing that the government is subsidizing in some way.”
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“If we all were getting a thousand bucks a month, a loaf of bread would cost more or less what it costs right now, because there’s still price sensitivity among consumers – it’s not like if you get a thousand bucks a month, you’ll say, ‘ahh, I can spend money on everything.’”
Additionally, Yang argued that “there’s still competition between vendors for that business.” Short of a giant price-fixing scheme, vendors are incentivized to keep costs lower for consumers because most consumers will go for the cheaper products. “It’s impossible for all vendors to collude in all markets simultaneously,” he explained.
“The truth is, we’d be able to maintain the majority of the purchasing power because competition would still take place.”
New Social Indicators
One of the pillars of Yang’s campaign is to develop new measurements for the economy and the quality of life for the average American citizen. He explained that at the moment, the most common social and economic indicator that politicians refer to is GDP (gross domestic product), or “the total value of goods produced and services provided in a country during one year.”
“If GDP – which is [a concept] that we invented less than a hundred years ago – is going to keep going up,” Yang explained that quality of life should be increasing as well – however, it isn’t.
Despite the fact that GDP keeps increasing, “our life expectancy has declined for two straight years, seven Americans are dying from drugs every hour, and more and more Americans are leaving the workforce,” he said.
“There are all of these negative social indicators that GDP completely misses.”
Yang’s proposed solution is “to move to new measurements, like childhood success rates, mental health, and freedom from substance abuse, environmental quality, median income and wealth, and proportion of the elderly in quality situations.”
“I call this new system ‘human capitalism’, or ‘human-centered capitalism’,” he said. Once the new measurements are established, Yang said that he would present them annually at the State of the Union address. Additionally, Yang would move “to start rewarding companies and individuals who move society forward along those dimensions.”
Yang explained that the development of a reward system for people who work to improve their communities and American society at large “is where a cryptocurrency solution could come in.”
“If you were to do something that would benefit your community, we could give you this new currency that you could then exchange for dollars if you wanted to,” he said. This would encourage the growth of “a parallel economy based around positive social interactions.”
This new, localized currency would be known as a “Digital Social Credit,” and while it could indeed be exchanged for dollars, it would be most valuable within one’s own community. This is to incentivize money staying local and to prevent currency flight from communities.
Campaign Financing – With Crypto
“I’m happy to say that I’m receiving contributions [from] around the country from new people every day who say that we do need to progress to a new sort of economy,” Yang said.
“Our average contribution is only $11. We’re receiving hundreds of thousands of dollars, and we now take contributions in Bitcoin, Ether, and other major cryptocurrencies,” he said, adding that if you’d like to donate to his campaign in crypto, you can do so at yang2020.com/crypto.
Unfortunately with climate change the need for infrastructure improvement and disaster mitigation will only rise. The more we spend now the less we spend later.
— Andrew Yang (@AndrewYangVFA) September 23, 2018
“The way we’re financing this campaign is really through popular enthusiasm,” Yang said, comparing his own campaign to the 2016 Bernie Sanders campaign, which “managed to raise hundreds of millions of dollars in small donations.”
“We’ve raised hundreds of thousands of dollars in small donations, and we’re tracking towards breaking the seven-figure mark not too long from now. That’s how we’re financing it.”
“Look, we’re trying to reorganize the economy to benefit actual human beings, and human beings like that,” Yang went on to say. “What my campaign is about is building a new type of economy from the ‘humanity-up’, if you will – focusing on us, and not capital or the marketplace.”
This was an excerpt. To hear the full interview with Andrew Yang, please click the Soundcloud or Youtube links.