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Something ought to be done to: A) take advantage of our technical advancements to provide better for all B) decrease hoarding of wealth at the very top (that's

by aklemm 11y ago

Something ought to be done to: A) take advantage of our technical advancements to provide better for all B) decrease hoarding of wealth at the very top (that's not to say inequity can/should be solved for all). That said, I don't see how a UBI works as long as people's appetites remain, basically, insatiable. Providing a UBI would seem to end up increasing inflation of basic goods and services.

xyzzy4 11y ago
> Providing a UBI would seem to end up increasing inflation of basic goods and services. Seems like that would be good for investors, bad for everyone else.
spikels 11y ago
Hoarding = saving and investing. Almost every point you make is confused about basic economics.
- aklemm 11y ago
  But you can't be bothered to explain where I've gone wrong? That's too bad. Regarding hoarding, do you think I meant they're keeping it under a mattress? Hoarding (which I'll admit is poor word choice and inflammatory) means they're allowed by policy to keep more than they ought to be if we want a UBI, or to raise up the lowest end of income spectrum.
GavinMcG 11y ago
How would that inflation work, exactly? UBI doesn't mean creating new money. This article [1] addresses that concern in a little more depth. Basically, the evidence we have from places that have tried this is that it might decrease inflation, and that in any case, the value of the income would far outstrip increased prices. [1] https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7#.qbg5o78cq https://medium.com/basic-income/wouldnt-unconditional-basic-...
- aklemm 11y ago
  I'm looking forward to reading that. I think of a UBI as a redistribution, not creating new money. So once it's redistributed, how do we keep that money circulating and growing among the populations who need it? How do we prevent it not all floating back to the top. For example, if the low-income population in a town suddenly has a little more resources and groceries are no longer quite so difficult to procure, how do rents not rise soon after? I hope the answers are in that article! Thanks.
  - SolarNet 11y ago
    Because we constantly keep redistributing it via income taxes. Because if they raise the rents they loose their UBI customers to someone who doesn't (of course that assumes there's no collaboration nor a monopoly). Already I see this in college housing. Some company increases their prices, a bunch of people move out to the place two blocks down with the old prices, and then they lowered them again to get those people back.
    - aklemm 11y ago
      Right, but that's absent an income increase among the students. You're missing that key piece of the question.
  - aninhumer 11y ago
    If rents start to rise, then it also increases the demand for new housing in the area, and eventually supply pushes it back down.
existencebox 11y ago
Certainly SOME inflation would happen if "all people get more money", but a thought on that, since it seems to be more subtle than that: I'd imagine that we'd already SEE that inflation, motivated through e.g. SNAP instead of UBI. There's an optimization curve that producers are fitting; and if the lower segments of the economy have more money to spend, that curve would probably lift some, but to lift sufficiently as to preclude such a significant market segment I imagine would be self defeating. That being said; I only feel that intuition for goods that can readily market to the poorest market segments with profit. For goods that already require jobbing (mid-high end luxury goods as an easy example), if UBI was on top of that, I imagine you'd certainly see inflation in those domains, unless enough people stopped working entirely to fall into the UBI-only market segment. I'd be curious to hear what someone with any real economics background (not I) has to say on this, since I can only reason about it on a very first-order level.
- ghaff 11y ago
  Based on what I've read, inflation is one of the weaker arguments against UBI assuming that it was implemented as a pure redistribution. (i.e. no increase in money supply, deficit, etc.) That said, given the scope of such a hypothetical program, it's probably reasonable to assume that there would be some demand shifts that could drive up certain wages and certain goods (perhaps housing in some areas). Or not. With, presumably, no more minimum wage and everyone with a poverty line-ish income without working, maybe Walmart doesn't need to pay as much to get part-time workers who just want to earn a little extra.
  - existencebox 11y ago
    You touch on actually another part of the question that I haven't heard discussed much. Many UBI proponents suggest that it would allow people to allocate smaller portions of their lives to "earning a little more" rather than their whole time on one job, but is the economy even set up (or able to evolve sufficiently) to support this? Additionally, would WE be ok with it? There's already a lot of push-back around buzzwords like "gig economy", and that would seem more prevalent in an era of ad-hoc work as needed for luxuries.
zuminator 11y ago
If it's a wash for the middle income household, that's fine. The UBI would primarily help those at the very bottom, people with essentially zero income. They can't afford anything now, but with the UBI they will be able to pay for their basic necessities, at least, more than they can now.
- ghaff 11y ago
  It probably wouldn't be. Median US household income is about $50K. So as a rough cut, households making more than about that would presumably end up putting more money in. There aren't enough of "the rich" to make a dent by themselves.
splintercell 11y ago
> B) decrease hoarding of wealth at the very top (that's not to say inequity can/should be solved for all). < Nobody is hoarding wealth, they are hoarding money. There's a huge difference between the two. When money is 'hoarded', it results in lower prices for the remaining goods and services in the economy, which is equivalent of investment in money itself. To put it another way, whenever someone hoards money, it becomes equivalent of him investing into every other investor's investment in proportion.
- jacobush 11y ago
  You maybe mean higher prices?
  - splintercell 11y ago
    No, lower prices. Whenever voluntary savings go up, consumer prices fall.
skybrian 11y ago
Talk about moving the goalposts. People's appetites are not literally insatiable; it's certainly possible to make sure everyone is well fed. Making sure everyone has a roof overhead is a doable goal, and Canada seems to be making good progress on it. [1] It's true that no amount of money will let everyone have a house in San Francisco, so for real estate in particular, inflation is a big problem. But there are other places to live, and on the margin, UBI will make it more feasible to move to cheaper places instead of where the most jobs are. (Social security is why there are so many senior citizens in Florida.) [1] http://www.huffingtonpost.ca/2015/08/13/housing-first-federal-election_n_7949510.html http://www.huffingtonpost.ca/2015/08/13/housing-first-federa...
AnthonyMouse 11y ago
> Providing a UBI would seem to end up increasing inflation of basic goods and services. I don't understand where this argument comes from. A basic income doesn't create money. For the average (literally average) taxpayer, the tax required to pay for the basic income will exactly match the amount of the basic income and it cancels. Higher-than-average income people would pay more in taxes which money would fund the basic income for lower-than-average income people. The only argument you can really make is that lower income people are more likely to actually spend the money. But that is true of anything that increases the income of lower income people. Moreover, most of the goods people buy today are either not of the type you consume significantly more of when you have more money, or are not rooted in scarcity. If you give lower income people more money and they buy more iPhones, Apple is not going to run out of iPhones and have to raise prices to ration them, they're just going to make more iPhones. The goods that actually are scarce, like housing and food, would be affected in theory, but we already artificially prop up the prices of those things. If we wanted the price to go down then there are obvious things we could do, like not impeding high density housing construction or not paying farmers to not plant crops.

by aklemm 11y ago

xyzzy4 11y ago

> Providing a UBI would seem to end up increasing inflation of basic goods and services. Seems like that would be good for investors, bad for everyone else.

spikels 11y ago

Hoarding = saving and investing. Almost every point you make is confused about basic economics.

aklemm 11y ago
But you can't be bothered to explain where I've gone wrong? That's too bad. Regarding hoarding, do you think I meant they're keeping it under a mattress? Hoarding (which I'll admit is poor word choice and inflammatory) means they're allowed by policy to keep more than they ought to be if we want a UBI, or to raise up the lowest end of income spectrum.

GavinMcG 11y ago

How would that inflation work, exactly? UBI doesn't mean creating new money. This article [1] addresses that concern in a little more depth. Basically, the evidence we have from places that have tried this is that it might decrease inflation, and that in any case, the value of the income would far outstrip increased prices. [1] https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7#.qbg5o78cq https://medium.com/basic-income/wouldnt-unconditional-basic-...

aklemm 11y ago
I'm looking forward to reading that. I think of a UBI as a redistribution, not creating new money. So once it's redistributed, how do we keep that money circulating and growing among the populations who need it? How do we prevent it not all floating back to the top. For example, if the low-income population in a town suddenly has a little more resources and groceries are no longer quite so difficult to procure, how do rents not rise soon after? I hope the answers are in that article! Thanks.
- SolarNet 11y ago
  Because we constantly keep redistributing it via income taxes. Because if they raise the rents they loose their UBI customers to someone who doesn't (of course that assumes there's no collaboration nor a monopoly). Already I see this in college housing. Some company increases their prices, a bunch of people move out to the place two blocks down with the old prices, and then they lowered them again to get those people back.
  - aklemm 11y ago
    Right, but that's absent an income increase among the students. You're missing that key piece of the question.
- aninhumer 11y ago
  If rents start to rise, then it also increases the demand for new housing in the area, and eventually supply pushes it back down.

existencebox 11y ago

Certainly SOME inflation would happen if "all people get more money", but a thought on that, since it seems to be more subtle than that: I'd imagine that we'd already SEE that inflation, motivated through e.g. SNAP instead of UBI. There's an optimization curve that producers are fitting; and if the lower segments of the economy have more money to spend, that curve would probably lift some, but to lift sufficiently as to preclude such a significant market segment I imagine would be self defeating. That being said; I only feel that intuition for goods that can readily market to the poorest market segments with profit. For goods that already require jobbing (mid-high end luxury goods as an easy example), if UBI was on top of that, I imagine you'd certainly see inflation in those domains, unless enough people stopped working entirely to fall into the UBI-only market segment. I'd be curious to hear what someone with any real economics background (not I) has to say on this, since I can only reason about it on a very first-order level.

ghaff 11y ago
Based on what I've read, inflation is one of the weaker arguments against UBI assuming that it was implemented as a pure redistribution. (i.e. no increase in money supply, deficit, etc.) That said, given the scope of such a hypothetical program, it's probably reasonable to assume that there would be some demand shifts that could drive up certain wages and certain goods (perhaps housing in some areas). Or not. With, presumably, no more minimum wage and everyone with a poverty line-ish income without working, maybe Walmart doesn't need to pay as much to get part-time workers who just want to earn a little extra.
- existencebox 11y ago
  You touch on actually another part of the question that I haven't heard discussed much. Many UBI proponents suggest that it would allow people to allocate smaller portions of their lives to "earning a little more" rather than their whole time on one job, but is the economy even set up (or able to evolve sufficiently) to support this? Additionally, would WE be ok with it? There's already a lot of push-back around buzzwords like "gig economy", and that would seem more prevalent in an era of ad-hoc work as needed for luxuries.

zuminator 11y ago

If it's a wash for the middle income household, that's fine. The UBI would primarily help those at the very bottom, people with essentially zero income. They can't afford anything now, but with the UBI they will be able to pay for their basic necessities, at least, more than they can now.

ghaff 11y ago
It probably wouldn't be. Median US household income is about $50K. So as a rough cut, households making more than about that would presumably end up putting more money in. There aren't enough of "the rich" to make a dent by themselves.

splintercell 11y ago

> B) decrease hoarding of wealth at the very top (that's not to say inequity can/should be solved for all). < Nobody is hoarding wealth, they are hoarding money. There's a huge difference between the two. When money is 'hoarded', it results in lower prices for the remaining goods and services in the economy, which is equivalent of investment in money itself. To put it another way, whenever someone hoards money, it becomes equivalent of him investing into every other investor's investment in proportion.

jacobush 11y ago
You maybe mean higher prices?
- splintercell 11y ago
  No, lower prices. Whenever voluntary savings go up, consumer prices fall.

skybrian 11y ago

Talk about moving the goalposts. People's appetites are not literally insatiable; it's certainly possible to make sure everyone is well fed. Making sure everyone has a roof overhead is a doable goal, and Canada seems to be making good progress on it. [1] It's true that no amount of money will let everyone have a house in San Francisco, so for real estate in particular, inflation is a big problem. But there are other places to live, and on the margin, UBI will make it more feasible to move to cheaper places instead of where the most jobs are. (Social security is why there are so many senior citizens in Florida.) [1] http://www.huffingtonpost.ca/2015/08/13/housing-first-federal-election_n_7949510.html http://www.huffingtonpost.ca/2015/08/13/housing-first-federa...

AnthonyMouse 11y ago

> Providing a UBI would seem to end up increasing inflation of basic goods and services. I don't understand where this argument comes from. A basic income doesn't create money. For the average (literally average) taxpayer, the tax required to pay for the basic income will exactly match the amount of the basic income and it cancels. Higher-than-average income people would pay more in taxes which money would fund the basic income for lower-than-average income people. The only argument you can really make is that lower income people are more likely to actually spend the money. But that is true of anything that increases the income of lower income people. Moreover, most of the goods people buy today are either not of the type you consume significantly more of when you have more money, or are not rooted in scarcity. If you give lower income people more money and they buy more iPhones, Apple is not going to run out of iPhones and have to raise prices to ration them, they're just going to make more iPhones. The goods that actually are scarce, like housing and food, would be affected in theory, but we already artificially prop up the prices of those things. If we wanted the price to go down then there are obvious things we could do, like not impeding high density housing construction or not paying farmers to not plant crops.