Yang Gang 2020 – Big If True

Andrew Yang appeared on the Joe Rogan Experience as an entrepreneur running for POTUS and is taking the Internet by storm. He is proposing a Universal Basic Income of $1,000 per month and probably a couple other things about WhoGivesADamn. While he is running as a Democrat, he is garnering the attention of many disparate factions, including the dissident right that memed Trump into the Oval Office. I won’t bore my Dear Reader with a laundry list of his opinions, one can go to his website for that. I want to explore his UBI because it’s the biggest campaign promise that’s ever been proposed.

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Before I start, let me lay some groundwork.

  1. Yang, similar to Donald Trump in 2015, is the only candidate who is not a politician. He speaks to Rogan as if he were just some guy named Joe. He doesn’t qualify every question Joe asks by saying “this is so important” before repeating the question and going on a winding bender with buzzwords and empty platitudes.
  2. Yang understands and appreciates statistics. Never mind that he still believes that there are only 12 million illegal immigrants in the country and does not know about the MIT/Yale study showing it’s at least 16, but probably 22. There is not a single politician running for POTUS who holds even 25 percent of Yang’s ability to understand data. In 2019 and beyond, this is going to be absolutely essential for every new person coming into any office subsidized by the American worker.
  3. Yang is spending his time, long before campaign season gets heavy, talking to the victims of automation. He is speaking to the folks who are killing themselves in record numbers, overdosing on opioids at unimaginable rates, and increasingly feel as if they have no place in our society. Indeed, the life expectancy of Americans has been falling for three consecutive years because of the spike in suicides and overdoses. The spine of America’s job force will continue to dissolve and there is, essentially, nothing that can be done to save it.
  4. We are smack dab in the middle of the fastest technological change in human history. The Industrial Revolution happened and altered the trajectory of civilization for good, but this new technological shift will, eventually, render most of the population obsolete. The shift has been growing slowly for a couple of decades but will now accelerate quickly. Most of the disaffected will not be smart enough to fill software engineering jobs and even many of the software-related fields will be eaten up by rudimentary Artificial Intelligence that can program itself. All that will be absolutely necessary to stave off economic collapse will be a handful of brilliant people and tradesmen. Andrew Yang and I are trying to figure out what to do about this. We are the vanguard, but particularly me.

I highly recommend watching his discussion on JRE before reading the following because this article will be a more specific interpretation of what he laid out on the show. I will not argue the basic points he does, such as re-educating truck drivers/clerical workers/cashiers to do other jobs, why we don’t need to see robots serving cappucinos before millions lose their careers, calling UBI “free money” to write it off as absurd, et cetera. At one point, Yang rattles off four quick stats about job predictions to answer one of Rogan’s questions.

  1. The McKinsey Global Institute says about 25 percent of jobs will be subject to automation. I found, more specifically, that they predict it to be about 73 million jobs by 2030.
  2. The Obama administration, during its last month in office, stated that 83 percent of jobs paying sub-$20 per hour will be subject to automation by 2030. I found the pdf. It also says that 31 percent of jobs making between $20 and $40 per hour will be gone, and 4 percent of jobs at $40+ per hour. They add, “the OECD study’s authors estimate that 44 percent of American workers with less than a high school degree hold jobs made up of highly-automatable tasks while 1 percent of people with a bachelor’s degree or higher hold such a job.”
  3. MIT, Yang says, echoes the same sentiment.
  4. Some organization that I cannot find called Bane/Bang/Bing/something similar, predicts between 20 and 30 percent of jobs will be subject to automation by 2030. Maybe he was referencing the Dark Knight Rises.

The uniformity of these reports sort of validates all of them. Of course, it is possible that they piggyback off of each other or that all of them might be 1 or 30 percent off, but that is missing the point. Every prediction from every entity that bothers looking into the topic renders a dystopian forecast. Nobody is predicting that zero jobs will be lost or that there will be a net positive in the number of jobs when 2035 is compared to 2015. The only prediction is a massive societal and economic disruption that feels as if it will resemble the world of Blade Runner 2049.

Here is our current predicament: there are approximately 150 million jobs in the current U.S. economy, February 2019. What will happen when we remove 60 to 100 million of these jobs in only a decade while the total population continues to rise?

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Anyway, this article will be based entirely off of the Center on Budget and Policy Priorities and U.S. Census Bureau data from 2017. In FY 2017, the federal government spent approximately $4 trillion. This was ~21 percent of the total GDP. Of this $4 trillion, $3.3 trillion was generated with federal revenues and $665 billion was borrowed from you know who. The Inquisitive Reader might be asking how this $4 trillion was allocated.

Healthatize Me, Captain!

In fiscal 2017, 26 percent, or approximately $1 trillion of the Fed’s spending was on Healthcare and Stuff. Medicare was ~60 percent of this spending, amounting to $597 billion for 59 million people. This roughly equates to $843 per month per person. The other 40 percent or $403 billion was spent on Medicaid, CHIP, ACA, et cetera for 69 million people. This roughly equates to $487 per month per person.

Socially Securitize Me, Captain!

Social Security spending amounted to 24 percent of the total budget. This was approximately $945 billion for 42 million retirees or roughly $1,404 per month per retiree.

Defensitize Me, Captain!

A total of 15 percent of the $4 trillion was spent on defense and international security projects. This gives us a rough $611 billion, the bulk of which was spent by the Defense Department. However, a whopping $104 billion of that total was spent on activity in Afghanistan and other foreign affairs inappropriately called Overseas Contingency Operations.

Safety Netatize Me, Captain!

America’s Safety Net is described by the CBPP as the following: the refundable portions of the Earned Income Tax Credit and Child Tax Credit, which assist low- and moderate-income working families; programs that provide cash payments to eligible individuals or households, including Supplemental Security Income for the elderly or disabled poor and unemployment insurance; various forms of in-kind assistance for low-income people, including SNAP (food stamps), school meals, low-income housing assistance, child care assistance, and help meeting home energy bills; and various other programs such as those that aid abused and neglected children.

This spending amounts to 9 percent of the total, affecting some 36 million people to the tune of $357 billion, or $826 per month per person.

Debtatize Me, Captain!

Lastly, we must pay interest to you know who on past borrowing procedures from you know who. The debt in 2017 was approximately $15 trillion and the interest owed on this debt was $263 billion.

All Told

Among the Safety Net, Social Security, and Healthcare we had approximately $2,360 billion in spending. This is what we call entitlement programs and it’s taking up the majority, about 59 percent, of our total budget.

YANG GANG 2017

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The U.S. Census Bureau estimates that we had approximately 325,719,178 citizens on July 1, 2017. Of these citizens, 22.6 percent were below the age of 18. This leaves us with 252,106,644 citizens who are 18 or older. Andrew Yang is proposing that we give $1,000 to each person in this category, which would cost the Feds (through our tax dollars) approximately $3,025 billion. That’s a lot of cash.

HOWEVER

Yang states that approximately 50 percent of the U.S. population is already getting some sort of help from the government. He proposes that folks getting more than $1,000 in help will be untouched by the UBI and their current situation will continue. Those getting, for example, $650 per month between welfare and food stamps will get a $350 boost, bringing them to the UBI. So, with a cursory analysis, the cost of the UBI will be closer to $1.8 trillion dollars.

Let us then call the continuation money that will be untouched while we transition from the Trump administration to Yang Gang approximately $1.5 trillion or $1,500 billion. We could certainly limit it to $1 trillion to stop the country’s bleeding, but let’s aim very high so that we don’t accidentally spend billions more than we have. Let us also recall that the Feds brought in $3,300 billion but had to borrow $665 billion to pay the total budget, including the interest owed on the accumulated debt.

Yang predicts that putting money into the pockets of Americans will be reinserted directly into the economy, and he’s obviously correct. Where else would it go? This is not a stimulus package of printed cash that goes into the Fed’s coffer, it is cash directly deposited into American bank accounts. Every person I know is living paycheck to paycheck and that $1,000 will ease the burden, but will also be spent on a slight improvement in quality of life. The average person will not be sending their UBI into their savings because they cannot afford to do so. This will result, Yang says, in approximately $1,000 billion (see the Roosevelt Institution citation below) coming back into the Fed’s greedy little paws, leaving approximately $800 billion that needs to be raised.

In case the Reader is getting a bit lost, we should recap our budget.

  • $1,500 billion for the continuation of health care, social security, and other safety net spending.
  • $611 billion for defense and wars we do not want.
  • $263 billion for interest payments on our debt.
  • $800 billion for the final fifth of Various Expenditures.
  • This equates to $3,174 billion of the $3,300 billion the Fed had available to spend in 2017, leaving us with only $126 billion to pay for the final $800 billion needed for UBI.

Even if we did absolutely nothing to change our spending or revenue, we would be spending approximately $26 billion less than we actually did in 2017. This would have amounted to borrowing $639 billion instead of $665 billion. However, Yang and I are not content with furthering the debt and will not settle for anything less than the best.

YANG/ME 2017

The savings that various companies will accumulate from automating truck transportation alone will approach an estimated $168 billion. Imagine the savings when that is combined with automation in retail, insurance, clerical work, cashiering, and more. Amazon, Cargill, Koch Industries, Microsoft, et al. will be receiving this money, not Americans. They will shuffle it through their typical avenues in order not to let it trickle down. In comes Yang with the Value-Added Tax that “gets the American public a slice of every robot truck mile, Amazon transaction, Facebook ad, and every other industrialized country already has this tax.”

A Value-Added Tax at just half the rate of the European level for an economy the size of America’s, roughly $20 trillion, would result in approximately $800 billion for the Feds. For some validation, the Roosevelt Institute’s model predicts that a $1,000/month UBI would accelerate GDP growth by 12.56 percent over baseline after eight years, then it would return to baseline growth. Baseline would predict a GDP of $28.5 trillion after 12 years. Adding 12.56 percent growth would bring our GDP well above $30 trillion by 2030.

Since I am a verygoodnotbad man, I will advise Yang to pull out of Afghanistan and all of our other bullet-laden ventures across the globe. This will result in a cut in defense spending of $104 billion. Then, we will rescind our foreign aid, mostly because I do not give a damn about other countries while the suicide rates in my backyard are skyrocketing. The money that we sent across the globe in 2017 was approximately $22.7 billion. Check this out.

$126 + $800 +$104 +$22.7 = $1,052.7 billion

Nice, right? All we have to do is stop sending our troops to die before or after murdering brown people to set up fake democracies while we take their oil and cease the tens of billions of dollars that flow to other countries in foreign aid. What do Americans gain from these wars and giving their hard-earned money to the governments of Egypt, Jordan, Kenya, or Israel?

We now have an expanded budget with less money being incinerated in the name of Conservatism Inc™. It’s likely that there are many other areas where we could skimp or totally cut funding in order make Joe and Jane more comfortable, but we are just going over the big stuff. Let’s take a look at the budget of Yang Gang 2017.

  • $1,500 billion for the continuation of health care, social security, and other safety net spending.
  • $484.3 billion for defense and no wars or foreign aid.
  • $263 billion for interest payments on our debt.
  • $800 billion for the final fifth of Various Expenditures.
  • This equates to $3,047.3 billion of the $4,100 billion the Fed would have had available to spend in 2017, leaving us with a SURPLUS of $152.7 billion after a Universal Basic Income of $1,000/month for every adult.

YANG GANG 2020

Without severe restrictions in spending and without a single tax added to the income of an American, it’s easy to see how a UBI could be feasible. I was quite generous with some of my assumptions and wrote this in one day, but it would be fascinating to see what a data-driven mind could do as POTUS. Trump was elected partially because of his business acumen, but that has panned out well for exactly nobody.

Perhaps it is a total pipe dream that Yang could get anything substantial done (or that he even makes it out of the primaries). We’ve seen during this administration how easy it is to gum up the works when the two teams do not want to cooperate. Then again, if Yang were to get elected and hamstrung by the bureaucracy, millions of people would be rioting in the streets because of how plain it would be to see that the government is withholding $1,000 from them.

Do not take this man lightly. Trump was memed into office and he wasn’t offering his voters a dime. Yang went on JRE, addressed white men specifically (30 percent of the U.S. population), and he is not a politician. Do not forget what happened to Ann Coulter when she said Donald Trump had best odds of winning the 2016 race way back on 19 June 2015. If nothing else, UBI will be a staple topic in the 2019/20 Presidential debates.

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