The Economic Necessity of Basic Income

Geoff Crocker (geoff.crocker@3wa.co.uk)

MPRA Paper from University Library of Munich, Germany

Abstract: The delinkage of productivity and real wages is the underlying cause of the 2007 economic crisis. As a result of this delinking, consumer income lagged output GDP, and the gap was funded by consumer credit and increased deficit-financed welfare payments. This proved unsustainable, and so led to current austerity policy and GDP cuts. An alternative paradigm is needed in which the financial sector is re-engineered and financial instruments redefined to serve the real economy. Deficient demand and financial deficit are inevitable in advanced technology economies. The only ultimate solution is a basic income funded by QE in proportion to output GDP and not counted as deficit.

Keywords: basic; citizen; income (search for similar items in EconPapers)
JEL-codes: E0 E00 (search for similar items in EconPapers)
Date: 2015-03-17
New Economics Papers: this item is included in nep-mac and nep-pke
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