5 ms·

Yes, the price of yachts won't increase, but who cares? Do a simple thought experiment. Imagine there are 1 million poor. They, and everyone else, receive $1

by DougN7 10y ago

Yes, the price of yachts won't increase, but who cares? Do a simple thought experiment. Imagine there are 1 million poor. They, and everyone else, receive $12K per year. The poor (and those just above them on the economic ladder) will spend all of that on basic needs: food, housing, clothing, transportation. That's $12 Billion more now competing for a fixed amount of goods. What would any company/retailer/landlord do if they immediately sold out of everything they had? They'd raise prices until supply and demand were in equilibrium again. And thus the very things the poor need are the things the prices will increase the most, by virtue of them competing to purchase those items. I'm not saying it's fair or right. But it is reality.

jganetsk 10y ago
Very little of what you said is reality. > They, and everyone else, receive $12k per year. You didn't read the article. The only people who receive net $12k per year are those who have zero income. Everyone else receives net <$12k per year, because some of their income is taxed in order to finance basic income. > The poor (and those just above them on the economic ladder) will spend all of that on basic needs: food, housing, clothing, transportation. Incorrect. Who are you to dictate to people how to spend that money? "All" is not the amount they will spend, and "basic needs" is not the only thing they will spend it on. They will save some of it. And they will spend some (maybe close to all) of that money on paying off debt. There is $747 billion in credit card debt, $1.14 trillion in auto loans, and $1.28 trillion in student loads. And some of it will go to everything else: alcohol, video games, travel, etc. And by the way, how many Big Macs do you think people want to buy? How many houses do you think they want to buy? How many trips do you think they want to take? > That's $12 Billion more now competing for a fixed amount of goods. Definitely not $12 Billion, as I have demonstrated above. And there is no such thing as a "fixed amount of goods" in economics. Of course prices will change. But they will change in healthy ways. The idea that there's some sort of feedback loop present here that causes basic income to cancel out its own effects is completely unfounded.
- DougN7 10y ago
  I'm starting to think you're trolling. You're zeroing in on phrases and ignoring the principles they explain. And what is a 'healthy way' for prices to change for basic needs? They aren't going to drop. Any other change hurts the poor.
  - jganetsk 10y ago
    Ok, let's spell it out with a basic example You said we are going to give $12 billion to the poor There is $747 billion of credit card debt in the United States. Much of that comes from lending in the past to the poor to finance their basic needs. $747 billion > $12 billion It is possible that all of 1 year's basic income entirely goes toward paying off credit card debt. In this scenario: 1) The poor receive a much needed benefit from basic income: they get to pay off their credit card bills. 2) There is no change in demand on basic goods whatsoever. 3) This significant paying down of debt leads to consumer interest rates going down, which further helps the poor. So here is one scenario that is a counterexample to your claim that this can "any other change hurts the poor". This is an example which helps the poor. You are forgetting that people have the freedom to do what they want with their money. When prices go up for one thing, they spend their money in other ways. Healthy ways for prices to change: 1) The price change is stable, rather than runaway. It happens once, and that's it, but we continue to pay basic income year after year. This is expected, if we keep the money supply fixed. 2) The price change eventually leads to an increase in wages for the poor, which have been stagnant for decades.
    - sokoloff 10y ago
      What is the likelihood that all $12BB given to people carrying credit card debt gets spent entirely and solely on reducing that credit card debt? I think it's about 1 / googol.
      - jganetsk 10y ago
        Yes but that's irrelevant. What will really happen is, as I said earlier, a combination of saving/investing, spending, and paying off debt. (Obviously, what else can you do with money?) Spending on basic needs is not the only option. They are not forced to do so. And don't underestimate just how much debt the American poor have, and how much they can benefit from relieving their debt.
stale2002 10y ago
It is NOT a fixed amount of goods. All this money going into food, means that businesses would enter the market. That is called supply and demand. Increased demand CAUSES increased supply. Read an econ 101 textbook.
- DougN7 10y ago
  True. So where do all of these new businesses get their employees? They'll have to compete for them by raising wages (which would be good). Except people have somewhat less incentive to work now that they're getting some free money, so the wages have to be raised even more to get them to work. That translates directly into higher prices. Each individual piece of UBI sounds good. But when the whole system gets put together, it doesn't balance out. It can't.

by DougN7 10y ago

jganetsk 10y ago

Very little of what you said is reality. > They, and everyone else, receive $12k per year. You didn't read the article. The only people who receive net $12k per year are those who have zero income. Everyone else receives net <$12k per year, because some of their income is taxed in order to finance basic income. > The poor (and those just above them on the economic ladder) will spend all of that on basic needs: food, housing, clothing, transportation. Incorrect. Who are you to dictate to people how to spend that money? "All" is not the amount they will spend, and "basic needs" is not the only thing they will spend it on. They will save some of it. And they will spend some (maybe close to all) of that money on paying off debt. There is $747 billion in credit card debt, $1.14 trillion in auto loans, and $1.28 trillion in student loads. And some of it will go to everything else: alcohol, video games, travel, etc. And by the way, how many Big Macs do you think people want to buy? How many houses do you think they want to buy? How many trips do you think they want to take? > That's $12 Billion more now competing for a fixed amount of goods. Definitely not $12 Billion, as I have demonstrated above. And there is no such thing as a "fixed amount of goods" in economics. Of course prices will change. But they will change in healthy ways. The idea that there's some sort of feedback loop present here that causes basic income to cancel out its own effects is completely unfounded.

DougN7 10y ago
I'm starting to think you're trolling. You're zeroing in on phrases and ignoring the principles they explain. And what is a 'healthy way' for prices to change for basic needs? They aren't going to drop. Any other change hurts the poor.
- jganetsk 10y ago
  Ok, let's spell it out with a basic example You said we are going to give $12 billion to the poor There is $747 billion of credit card debt in the United States. Much of that comes from lending in the past to the poor to finance their basic needs. $747 billion > $12 billion It is possible that all of 1 year's basic income entirely goes toward paying off credit card debt. In this scenario: 1) The poor receive a much needed benefit from basic income: they get to pay off their credit card bills. 2) There is no change in demand on basic goods whatsoever. 3) This significant paying down of debt leads to consumer interest rates going down, which further helps the poor. So here is one scenario that is a counterexample to your claim that this can "any other change hurts the poor". This is an example which helps the poor. You are forgetting that people have the freedom to do what they want with their money. When prices go up for one thing, they spend their money in other ways. Healthy ways for prices to change: 1) The price change is stable, rather than runaway. It happens once, and that's it, but we continue to pay basic income year after year. This is expected, if we keep the money supply fixed. 2) The price change eventually leads to an increase in wages for the poor, which have been stagnant for decades.
  - sokoloff 10y ago
    What is the likelihood that all $12BB given to people carrying credit card debt gets spent entirely and solely on reducing that credit card debt? I think it's about 1 / googol.
    - jganetsk 10y ago
      Yes but that's irrelevant. What will really happen is, as I said earlier, a combination of saving/investing, spending, and paying off debt. (Obviously, what else can you do with money?) Spending on basic needs is not the only option. They are not forced to do so. And don't underestimate just how much debt the American poor have, and how much they can benefit from relieving their debt.

stale2002 10y ago

It is NOT a fixed amount of goods. All this money going into food, means that businesses would enter the market. That is called supply and demand. Increased demand CAUSES increased supply. Read an econ 101 textbook.

DougN7 10y ago
True. So where do all of these new businesses get their employees? They'll have to compete for them by raising wages (which would be good). Except people have somewhat less incentive to work now that they're getting some free money, so the wages have to be raised even more to get them to work. That translates directly into higher prices. Each individual piece of UBI sounds good. But when the whole system gets put together, it doesn't balance out. It can't.