4 ms·

I fear it will only increase inflation to a level that the 10k people get is representing about the same in goods as the current level is they have. Free money

I fear it will only increase inflation to a level that the 10k people get is representing about the same in goods as the current level is they have. Free money is fake: it doesn't work in my opinion. It either increases the price level (hey - even the poor bum gets 10k a year, so he can afford a $10 bread, isn't it?) or it will stop people from over-achieving. My motivation to earn extra with a job only to see it go to taxes would reduce significantly if I can remain at the same level without a job and just 2 or 3 extra kids :)

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stale2002 10y ago
Well, buts it's NOT free money. The money is coming from rich people and being given to poor people. The 'amount' of money in the system stays the same and therefore inflation stays the same. Also, at least recently everyone has been talking about how inflation is too LOW not too high.
- jay_kyburz 10y ago
  Yes but rich people are not spending thier money on rent and food. I think that giving the poor this money will mean basic necessities will just get more expensive and the poor will have the same as they have now, and landlords and Wallmart will pocket the cash.
  - m_mueller 10y ago
    This is not how supply and demand should work in a functioning economy. Higher demand will up the price at first, but then some market player should be able to step in and make it work for less (thus upping the supply), until the market has found a new steady state (which, as long as supply isn't restricted, should be around the same price as before or lower because of a higher scale). Now obviously, if what you have isn't actually a free market but an oligopoly with government protections, price fixings etc., this won't work. You'll have some of these problems in some markets, but that would just have to be next thing to concentrate on.
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stale2002 10y ago

Well, buts it's NOT free money. The money is coming from rich people and being given to poor people. The 'amount' of money in the system stays the same and therefore inflation stays the same. Also, at least recently everyone has been talking about how inflation is too LOW not too high.

jay_kyburz 10y ago
Yes but rich people are not spending thier money on rent and food. I think that giving the poor this money will mean basic necessities will just get more expensive and the poor will have the same as they have now, and landlords and Wallmart will pocket the cash.
- m_mueller 10y ago
  This is not how supply and demand should work in a functioning economy. Higher demand will up the price at first, but then some market player should be able to step in and make it work for less (thus upping the supply), until the market has found a new steady state (which, as long as supply isn't restricted, should be around the same price as before or lower because of a higher scale). Now obviously, if what you have isn't actually a free market but an oligopoly with government protections, price fixings etc., this won't work. You'll have some of these problems in some markets, but that would just have to be next thing to concentrate on.

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