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If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. And independently. So you'll end up

If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. And independently. So you'll end up spending that $1k on either housing, bills or food. So you will still need a job if you want all three of those things, not sit around and contemplate what you should do with your life. It's sort of like how the ACA raised the overall price of insurance. Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI. Prove me wrong.

bostonpete 10y ago
A UBI would end up selectively helping those who need it and not putting money in the pocket of those who don't (in general). The UBI would have to be paid by taxes -- more than $1000 per month would come from those who are well off and less than $1000 per month would come from those in need. Your theory that the cost of food would go up if people had more money is out of whack.
- prodmerc 10y ago
  I mean Universal Basic Income, the system that people rave about where everyone gets this magical problem solving basic income.
  - bostonpete 10y ago
    Yes -- universal basic income would be paid by taxes.
jbmorgado 10y ago
What you just advocated there, is that "basic needs" must be denied to part of population in order to make them cheaper to the other part. That's both economical and morally wrong.
- prodmerc 10y ago
  People with jobs have income for the basic needs. Those without jobs get state assistance for the basic needs. No need to give everyone a basic income.
  - lotharbot 10y ago
    One major point of a basic income is to simplify and streamline the "state assistance" part, to eliminate the "cliff" between that and a job.
- omilu 10y ago
  Nobody is denying anybody anything. Everyone is free to work, and compensation for your work fulfills your basic needs. A better system for human society has yet to be invented.
bryanlarsen 10y ago
1) Americans currently consume (not necessarily eat) 3800 kcals/day of food without basic income. Are you saying that basic income will make that number go up? 2) The American housing market is very messed up and far from a free market, so any prediction up or down is very difficult. I predict that Basic Income will cause a bunch of people to move from high cost cities like NYC & SF into low cost areas so that they can live comfortably on the basic income. So there will be pressures both up and down on prices. But point #1 still stands. Right now most Americans already have a place to live, and basic income isn't going to cause people to go out and buy a second house so the effects are only going to be at the margin. 3) According to most economists, inflation is always a monetary phenomenon. If you print money to pay for UBI, inflation will go up. If you take from the rich to give to the poor, inflation will stay constant.
- tomp 10y ago
  > inflation is always a monetary phenomenon I don't understand this reasoning. Look, only one of the following can be true: (1) everyone can buy basic necessities of life, in which case nobody is poor and we don't need UBI, or (2) not everyone can buy the basic necessities of life. If (2) is true and we introduce UBI, then there will be more demand for the basic necessities of life (coming from all the people who were unable to afford them before), which will in itself result in inflation (which, btw, doesn't measure the total supply of money, but overweights the basic necessities of life and underweights e.g. the stock market). If you combine that with the decreased motivation of people to work (resulting in lower supply), the resulting inflation will be massive.
  - jganetsk 10y ago
    Prove that it will be "massive". How much? The numbers are important here. I am willing to accept that some prices will go up. But I don't think it's "massive" and some are claiming that there's runaway inflation in this scenario. There isn't. We've also had a deflationary enviroment for quite some time. We need inflation.
  - tvelichkov 10y ago
    >> If you combine that with the decreased motivation of people to work (resulting in lower supply) You won't get lower supply because of the automation, because that's the reason you are giving basic income in the first place. John no longer needs to drive it's truck, the truck is gonna drive itself.
nickthemagicman 10y ago
Why would the prices change? The demand hasn't changed? The supply hasn't changed? People are still buying the same basic things they did before. The money is simply shifted around from the rich to the poor?
- jakeogh 10y ago
  "shifted around" is nice euphemism for theft.
  - anonfunction 10y ago
    With that logic all taxes and social policies are theft.
    - jakeogh 10y ago
      Correct. Personal taxes (taking things via threat of force) are theft. It does not matter who is doing the taking.
      - EliRivers 10y ago
        You have redefined the English language for your own propaganda purposes. This significantly degrades any chance of you being taken seriously.
        vostok 10y ago
        It's not necessarily for propaganda purposes, but I agree that this is a highly nonstandard terminology and it's not obvious to me that it improves anyone's ability to communicate.
      - raintrees 10y ago
        Thank you. If my seizing my neighbor's extra car because I do not have one is theft, it is still theft if I convince a majority to pass a law take it for me. And it is enforced with the threat of (or actual) violence against my neighbor, if my neighbor refuses.
vostok 10y ago
> If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. Couldn't you just inflation adjust the $1000 as the prices for those needs increase?
AnthonyMouse 10y ago
> Prove me wrong. Ok here we go. > If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. And independently. So you'll end up spending that $1k on either housing, bills or food. They don't get $1000/month for "basic needs", they get $1000/month for whatever they want. It's completely unconditional. Which means people wouldn't go out and buy twice as much food as they currently eat because they suddenly have a pile of money that can only be used for buying food. Unless they are currently starving, which hardly anyone in the US is, they would buy the same amount of food that they do now and there would be no inflation in the price of food. And anything with the effect of increasing nominal housing prices without reducing the ability of people to buy housing is excellent because it allows you to increase the housing stock without reducing nominal housing prices and causing existing homeowners to go underwater on their mortgages. In other words you can build more housing to cancel out the effect without NIMBYs fighting you and thus allow more people to own homes. > It's sort of like how the ACA raised the overall price of insurance. The primary driver of increasing insurance premiums wasn't the subsidy, it was the requirement that insurance companies take people with preexisting conditions. Suddenly a million sick people are making insurance claims who previously had no insurance, what did you think was going to happen to premiums? > Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI. Only if you want them to pretend to look for a job and never find one. And you want to create a poverty trap because actually taking a job doesn't actually increase the amount of money in their pocket because the government withdraws an equivalent amount of benefits.
- ElComradio 10y ago
  Long term this may indeed happen but in the short term, it seems unlikely. Like with school vouchers, if I ran a private for-profit school and knew my students suddenly had an extra $X,000 to spend on tuition, my short term move would understandably be to raise tuition at least some percentage of that amount. If the market responds in a couple of years by forcing me to dial it back, so be it, but in the meantime I've made more money without having to provide more services.
  - 10y ago
nabla9 10y ago
Of course not. For most people that $1000 is taken away by taxation and UBI is income neutral for them. >Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI. No, it's not. If you don't believe me read what Milton Friedman wrote about subject. Friedman suggested UBI or negative income tax because they would not distort markets the way welfare programs do. Social welfare programs create incentive traps where people have marginal effective tax rates as high as 80-90%. You work and your welfare drops accordingly. Here in Finland marginal effective tax rate in some cases is higher than 100%.
stale2002 10y ago
You are wrong. You are talking about inflation. Inflation happens when you increase the money supply. There is a very easy way to give people a bunch of money without increasing the money supply. This easy way is called "taking the money away from someone else" aka you pay for it with "taxes".
leepowers 10y ago
UBI is not adding money to the system. No new dollars would be printed. So there would be little to no effect on inflation. It's moving around existing money via taxation and redistribution. Under this scheme there wouldn't be any incentive for a business to raise their prices. Imagine that UBI is implemented and imagine it's effects on a business in a mid-sized city, say a restaurant. The business now has an additional 50,000 potential customers, people who can afford to eat out more often due to UBI. How should the restaurant owner react? He can raise his prices. But that exposes him to competitors who keep their prices the same. He can lower his prices. In which case he will earn less money per plate, but he now has a pool of 50,000 new customers to draw on, so he can make more money on volume. A good restaurateur would lower his prices proactively and try capture a large chunk of this new, larger market of customers. The point is it's easy to see how UBI could cause prices to go down, and not just up. It's simplistic and misleading to assert that all businesses will start price gouging in response to a UBI. Populations are more complicated that this, and markets are dynamic.

bostonpete 10y ago

A UBI would end up selectively helping those who need it and not putting money in the pocket of those who don't (in general). The UBI would have to be paid by taxes -- more than $1000 per month would come from those who are well off and less than $1000 per month would come from those in need. Your theory that the cost of food would go up if people had more money is out of whack.

prodmerc 10y ago
I mean Universal Basic Income, the system that people rave about where everyone gets this magical problem solving basic income.
- bostonpete 10y ago
  Yes -- universal basic income would be paid by taxes.

jbmorgado 10y ago

What you just advocated there, is that "basic needs" must be denied to part of population in order to make them cheaper to the other part. That's both economical and morally wrong.

prodmerc 10y ago
People with jobs have income for the basic needs. Those without jobs get state assistance for the basic needs. No need to give everyone a basic income.
- lotharbot 10y ago
  One major point of a basic income is to simplify and streamline the "state assistance" part, to eliminate the "cliff" between that and a job.
omilu 10y ago
Nobody is denying anybody anything. Everyone is free to work, and compensation for your work fulfills your basic needs. A better system for human society has yet to be invented.

bryanlarsen 10y ago

1) Americans currently consume (not necessarily eat) 3800 kcals/day of food without basic income. Are you saying that basic income will make that number go up? 2) The American housing market is very messed up and far from a free market, so any prediction up or down is very difficult. I predict that Basic Income will cause a bunch of people to move from high cost cities like NYC & SF into low cost areas so that they can live comfortably on the basic income. So there will be pressures both up and down on prices. But point #1 still stands. Right now most Americans already have a place to live, and basic income isn't going to cause people to go out and buy a second house so the effects are only going to be at the margin. 3) According to most economists, inflation is always a monetary phenomenon. If you print money to pay for UBI, inflation will go up. If you take from the rich to give to the poor, inflation will stay constant.

tomp 10y ago
> inflation is always a monetary phenomenon I don't understand this reasoning. Look, only one of the following can be true: (1) everyone can buy basic necessities of life, in which case nobody is poor and we don't need UBI, or (2) not everyone can buy the basic necessities of life. If (2) is true and we introduce UBI, then there will be more demand for the basic necessities of life (coming from all the people who were unable to afford them before), which will in itself result in inflation (which, btw, doesn't measure the total supply of money, but overweights the basic necessities of life and underweights e.g. the stock market). If you combine that with the decreased motivation of people to work (resulting in lower supply), the resulting inflation will be massive.
- jganetsk 10y ago
  Prove that it will be "massive". How much? The numbers are important here. I am willing to accept that some prices will go up. But I don't think it's "massive" and some are claiming that there's runaway inflation in this scenario. There isn't. We've also had a deflationary enviroment for quite some time. We need inflation.
- tvelichkov 10y ago
  >> If you combine that with the decreased motivation of people to work (resulting in lower supply) You won't get lower supply because of the automation, because that's the reason you are giving basic income in the first place. John no longer needs to drive it's truck, the truck is gonna drive itself.

nickthemagicman 10y ago

Why would the prices change? The demand hasn't changed? The supply hasn't changed? People are still buying the same basic things they did before. The money is simply shifted around from the rich to the poor?

jakeogh 10y ago
"shifted around" is nice euphemism for theft.
- anonfunction 10y ago
  With that logic all taxes and social policies are theft.
  - jakeogh 10y ago
    Correct. Personal taxes (taking things via threat of force) are theft. It does not matter who is doing the taking.
    - EliRivers 10y ago
      You have redefined the English language for your own propaganda purposes. This significantly degrades any chance of you being taken seriously.
      - vostok 10y ago
        It's not necessarily for propaganda purposes, but I agree that this is a highly nonstandard terminology and it's not obvious to me that it improves anyone's ability to communicate.
    - raintrees 10y ago
      Thank you. If my seizing my neighbor's extra car because I do not have one is theft, it is still theft if I convince a majority to pass a law take it for me. And it is enforced with the threat of (or actual) violence against my neighbor, if my neighbor refuses.

vostok 10y ago

> If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. Couldn't you just inflation adjust the $1000 as the prices for those needs increase?

AnthonyMouse 10y ago

> Prove me wrong. Ok here we go. > If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. And independently. So you'll end up spending that $1k on either housing, bills or food. They don't get $1000/month for "basic needs", they get $1000/month for whatever they want. It's completely unconditional. Which means people wouldn't go out and buy twice as much food as they currently eat because they suddenly have a pile of money that can only be used for buying food. Unless they are currently starving, which hardly anyone in the US is, they would buy the same amount of food that they do now and there would be no inflation in the price of food. And anything with the effect of increasing nominal housing prices without reducing the ability of people to buy housing is excellent because it allows you to increase the housing stock without reducing nominal housing prices and causing existing homeowners to go underwater on their mortgages. In other words you can build more housing to cancel out the effect without NIMBYs fighting you and thus allow more people to own homes. > It's sort of like how the ACA raised the overall price of insurance. The primary driver of increasing insurance premiums wasn't the subsidy, it was the requirement that insurance companies take people with preexisting conditions. Suddenly a million sick people are making insurance claims who previously had no insurance, what did you think was going to happen to premiums? > Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI. Only if you want them to pretend to look for a job and never find one. And you want to create a poverty trap because actually taking a job doesn't actually increase the amount of money in their pocket because the government withdraws an equivalent amount of benefits.

ElComradio 10y ago
Long term this may indeed happen but in the short term, it seems unlikely. Like with school vouchers, if I ran a private for-profit school and knew my students suddenly had an extra $X,000 to spend on tuition, my short term move would understandably be to raise tuition at least some percentage of that amount. If the market responds in a couple of years by forcing me to dial it back, so be it, but in the meantime I've made more money without having to provide more services.
- 10y ago

nabla9 10y ago

Of course not. For most people that $1000 is taken away by taxation and UBI is income neutral for them. >Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI. No, it's not. If you don't believe me read what Milton Friedman wrote about subject. Friedman suggested UBI or negative income tax because they would not distort markets the way welfare programs do. Social welfare programs create incentive traps where people have marginal effective tax rates as high as 80-90%. You work and your welfare drops accordingly. Here in Finland marginal effective tax rate in some cases is higher than 100%.

stale2002 10y ago

You are wrong. You are talking about inflation. Inflation happens when you increase the money supply. There is a very easy way to give people a bunch of money without increasing the money supply. This easy way is called "taking the money away from someone else" aka you pay for it with "taxes".

leepowers 10y ago

UBI is not adding money to the system. No new dollars would be printed. So there would be little to no effect on inflation. It's moving around existing money via taxation and redistribution. Under this scheme there wouldn't be any incentive for a business to raise their prices. Imagine that UBI is implemented and imagine it's effects on a business in a mid-sized city, say a restaurant. The business now has an additional 50,000 potential customers, people who can afford to eat out more often due to UBI. How should the restaurant owner react? He can raise his prices. But that exposes him to competitors who keep their prices the same. He can lower his prices. In which case he will earn less money per plate, but he now has a pool of 50,000 new customers to draw on, so he can make more money on volume. A good restaurateur would lower his prices proactively and try capture a large chunk of this new, larger market of customers. The point is it's easy to see how UBI could cause prices to go down, and not just up. It's simplistic and misleading to assert that all businesses will start price gouging in response to a UBI. Populations are more complicated that this, and markets are dynamic.