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The point isn't just that debt would be paid off. It’s that consumption would remain at a similar level, except instead of being funded by a combination of deb

The point isn't just that debt would be paid off. It’s that consumption would remain at a similar level, except instead of being funded by a combination of debt and aid it’s funded by UBI. For sure there'd be some inflation, I just wouldn't expect it to erase gains. After all, UBI would have to be funded by taxes in some form, so it’s not really “new” money entering the economy. On the other hand wouldn’t be surprised by a quick spike in rent, home prices and private college tuition. I have no idea whether UBI would actually be a good move, but it’s a lot of fun to game this stuff out. For example I wouldn’t be surprised if it led to better wages & conditions for unskilled labor, and maybe suppressed wages for higher earners. If you’re in a minimum wage job, UBI gives you a lot of leverage - you can quit without facing starvation. Companies would have to do more to attract and retain unskilled labor. On the other hand when you’ve got a mortgage, payments on the lexus and kids in private school, leaving your job to live on UBI alone isn’t really an option. Could also be that UBI lets you eliminate the minimum wage entirely and let the market sort it out.

mamon 10y ago
No, debt won't be paid off, because the only realistic way of financing UBI is generating more debt through government bonds. And that, just like Quantitive Easing, will only create another market bubble followed by another financial crisis.
- smogcutter 10y ago
  Maybe yes maybe no, but that's unrelated to people paying off their credit cards. Funding an expense like that with bonds really only makes sense to me if you expect it to result in growth (in which case its not necessarily a problem), but even in that case it sounds very inflationary. More so than UBI itself. I'm no good at macro though, and will happily say that at this point I'm arguing out of my depth, along with anyone who makes an argument without numbers behind it.

mamon 10y ago

No, debt won't be paid off, because the only realistic way of financing UBI is generating more debt through government bonds. And that, just like Quantitive Easing, will only create another market bubble followed by another financial crisis.

smogcutter 10y ago
Maybe yes maybe no, but that's unrelated to people paying off their credit cards. Funding an expense like that with bonds really only makes sense to me if you expect it to result in growth (in which case its not necessarily a problem), but even in that case it sounds very inflationary. More so than UBI itself. I'm no good at macro though, and will happily say that at this point I'm arguing out of my depth, along with anyone who makes an argument without numbers behind it.