Democratic candidate Bernie Sanders loves to push nations like Sweden and Denmark as being the ideal models of socialist economies. Of course, he refuses to acknowledge places like Venezuela, which are now in the final bloody days of their own Socialist experiment.
And while a modicum of safety net benefits are necessary for any society to protect those who either cannot work, or are in transition between jobs and other hardships, the question has always been how much a government can spend on such programs before they affect both economic growth, and fiscal policies.
The nation of Switzerland however, could potentially become the ultimate pendulum swing as they are now just a few weeks away from a referendum which would create a system that would provide every man, woman, and child free money, whether they are employed or not, or whether they actually need it or not.
In early June the Swiss will be called upon to make a historic decision. Switzerland is the first country worldwide to put the idea of an Unconditional Basic Income to a vote and the outcome of this referendum will set a strong precedent and establish a landmark in the evolution of this debate.
The Swiss public will have to approve or reject a change in the constitution that would allow for the introduction of an Unconditional Basic Income (UBI), or a preset, monthly minimum income to be paid out by the government to every adult and child in the country if their income falls below a specific threshold. Even though details of this proposal have been few and far between, the most commonly cited amount of this guaranteed income would be 2,500 Swiss Francs for adults and 625 francs for children. The architects of the proposal stress that this government-guaranteed payment, unlike the current benefit programs, will be entirely “no questions asked”, i.e., it will not be means-tested and will apply to every person legally living in Switzerland. – Acting-Man
The insanity of this ‘helicopter money’ scheme derives from the fact that nearly all of the West has de-evolved from productive economies into ones almost completely tied to consumption. And with economic growth across the European and U.S. spectrums declining below 3% for the entirety of the current decade, desperate measures like negative interest rates and free money are being seen as the only solutions to create both growth and inflation to even begin to pay off the bottomless pit of debt they created to save the banks back in 2008.
History shows what the result of any vast money printing scheme ends with, and since the Swiss currency is backed by neither gold nor any other asset, it will only be a matter of time before hyper-inflation destroys what is left of their failing economy. But since government programs are built to bring about short-term political and social gains to the detriment of future generations, robbing Peter to pay Paul always seems like a good idea until you run out of other people’s money.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.