The American Dream | Founders' Review Editorial

The American Dream used to describe the opportunity to buy your own house, cars, education, etc.

The word dream comes from economics suggesting there are some processes and flows that we cannot affect.

I came from Big Tech, notably the culture of Microsoft, Amazon, Intel. We think differently. There are no dreams, you just go and get it done. I described here the mathematical model, when all demand meets with supply.

Link of the day.
We tried Low-Code UI based AI and LLMs with DataStax and Langflow at Google's event. Here.

How do you get such things done? First of all, I look around in our neighborhood.

Filling all demand is closely related to money. It must be credit money, if it is made to drive consumption. The 21th century is about free markets.

Let's back propagate as an AI model. In order to pay for your consumption, you need to have credit throughout your lifetime. There are no gaps.

Assume, you get a lump sum at the end of your life. That covers all your debt accumulated by that time.

This is kind of like how it works today. We just explain it differently. You just look at the usually growing house prices. The government is gracious, and it lets you pass it on to your inheritors. It is a random extra, so it's impact on the economy is negligible.

The model becomes the guaranteed consumption. It is the maximum possible domestic product, when you get anything you need that is possible. It is not limited by society, standards, religion or cultures.

The final lump sum payment ensures that you cannot default. The government pays each generation for their contributions. It is easier to explain a single payment amount to anyone compared to interest rates. It is also easier to explain, how the money is assigned. You just gradually pay your needs of food, housing, education, transportation, and healthcare over your life using your guaranteed credit line. All demand is met with real money that you borrow from the bank. This also assumes it is granted directly for citizenship on a central bank account or similar. No intermediaries are involved other than basic bookkeeping.

Timing the lump sum payment ensures that you will not borrow too much. You get it at the age of 100. If you live until 75, you only get three quarters of the money. This ensures that society has an incentive that you live longer. You will likely not borrow more than the current stage of your lifetime. Interest rates can give a good assurance.

Service providers are less likely to default in this model. They know the amount of people that need products and services, and they know that they have credit to pay with. There is equality and resource sharing is democratic directly between the state and the individual. This helps companies to invest smarter with lower risks. There is no giant circle that requires to be understood including banks, depositors, financial regulators, consumption cycles, etc. It probably helps to smoothen crisis times.

Should companies require workforce, they pay a salary. That is how it works today. You can use it to pay off some debt, still you get the lump sum at the end. This allows you to afford even more like travel, a boat, etc. You will never lack the basics having a flow of guaranteed credit throughout your lifetime.

The payment may be negligible if you become rich. The system allows accumulating wealth. The wealthy save more directing less back to the economy by design. They provide a lucrative source of investment smoothening interest rates and carrying out projects.

This credit line model will actually be the consequence of artificial intelligence and robotics. Since most demand can be fulfilled with them, much human labor will become analytics and systems management. Machines require investment that is less risky, if humans have the guaranteed credit line. GPU investment starves people of credit today.

Human rights are assured. Your credit line can be spent towards healthcare and pension making those government services obsolete. Governments can still arrange the providers. Education is easier matching time with money. This ensures a healthy educated society in the age of the robotics. A guaranteed credit line can also prevent crimes, database blacklisting, exploitation, etc.

Guaranteed individual credit lines also solve the problem of homelessness. Any temporary joblessness does not require government intervention. You just borrow and spend until you find a better job. The credit line supports the basics, any extra work gives more to the society.

Any money printed is directly connected to individuals. This makes the system democratic. It is the union of people instead of the federation of investment banks. Real demand creates real value fulfilled completely. There is no conflict between food for the poor and luxury for the riches.

Now, the world today is not like this. It is because people opt for perks instead of real accounting in money.

First of all joblessness is oftentimes a disciplinary tool for managers. However, it is bad for Adam Smith. Any joblessness is value lost, work not done, and salary not spent. Why would an economy limit itself to discipline? Too much feedback hurts the economy.

The system today is like a soccer field of twenty-two players and one ball. Only two are playing at a time. Give them more balls and all of them will create value. Soccer was invented in the 19th century, when few magnates and nobility decided about, and allowed major infrastructure and real estate projects one at a time to carry out early and safely.

Equality is another issue. The economy gives feedback by allowing inheriting the value made. How much of a credit line does not cause inflation of existing assets? The answer is simple. The credit line is a lump sum making the individual push for a balanced universal basic consumption. This covers the essentials for human life, such as the American dream.

Inequality also affects the consumer basket. How? Any products considered for the high earners are luxury. Their customer base is smaller and it can fluctuate. This makes investment riskier and rates higher. This lowers supplies. Any inequality will lower overall product as a result. A lump sum payment with a government guaranteed lifetime credit line reduces risks and interest rates making them more feasible.

A universal credit line to citizens prevents exploiting the youth, and it covers paying for public and private education.

Any long term debt is risky. You may expect citizens acquiring less credit early in their lifetimes unless they can offset it with employment soon.

Guaranteed health care is a big plus with a personal credit line supported by a government payment at the end of life for the average GDP product accumulated. The longer you live the more money healthcare providers make. You get continuous treatment making costs cheaper. You avoid untreated diseases. This brings a predictable investment. The simple Bismarck style pension and healthcare model works this way.

Such a scheme requires an educated workforce. A government assured credit line is the most democratic form of free markets. There are so many citizens that suddenly become a first class participant on investment markets.

Many will probably just opt for assigning their spot credit for their employers. This simplifies doing business as your employees are your creditors. They may opt for a mix of equity and a cash salary. Founders and co-founders directly build startups using their own credit from the government without overhead. Recovering after disasters like tornadoes is straightforward this way.

Discussion.

Now the notion of money is very difficult to explain. The easiest way to get a bad grade in economics school is the first class about money. It is because each group in the society views it differently based on how they make it. It is earned, exchanged, inherited, collected. It gains. It is for consumption, status, to build, or to pay employees.

Some teachers may opt for definitions that are closer to their state in society.

Sometimes powerful people decide to provoke and join civil wars and act like a junta grabbing positions as a family tradition withholding civil rights, money, pension, or healthcare from citizens and supporting prostitution. Good luck trying that. It will be difficult in the 21st century. Most citizens will be the descendants of immigrants of the past fifty years, maybe they already are. This makes wars small and transient.

Oftentimes families want to give some future advantage to their children like an Ivy League degree. The issue is that you pay someone now expecting that someone else will accept it to give authority or a better salary in the far future. Nobody can withhold information. Good luck trying that. It works because Ivy league schools secure the best scholars with prizes. It works for a small group. It may not work elsewhere.

Similarly, real estate or cryptocurrencies oftentimes promote their fixed quantity to ensure a better future compared to other people. Now, others will say, haha, you were late to buy my Ponzi coins, you get less from society in twenty years. Will people accept that in the 21th century? Good luck trying that. Those who are late will probably opt for another cryptocurrency or a guaranteed credit line instead.

There are some caveats. What if you cannot afford a house or condo, or property prices do not increase? This is when such a credit line would kick in. Why is that? The government has an incentive of a healthy and growing economy, and there is nothing more lucrative than rewarding past consumption and happiness. Why is this not done yet? Well, the system was favoring the mortgage scenario, which worked well. Also, talking about end of life payments is connected to unhappiness. Also, central bank and loan decisions required extensive knowledge. Education, computers, cryptocurrencies, artificial intelligence made such decisions available to ordinary citizens.

What is the worst case? Are you a full time consumer for a longer period? Companies still want your money, input, data. They cover their fixed costs with higher volumes giving financial benefits for them and lower prices to their customers.

Cryptocurrencies are for the 2010s and 2020s. A guaranteed credit line might be the right choice for smart people and a growing economy in the future.