8 ms·

> basic income is actually just a continuation of the same inflationary alchemy It's no such thing; not remotely. BI isn't new money, it's simply a redistribut

> basic income is actually just a continuation of the same inflationary alchemy It's no such thing; not remotely. BI isn't new money, it's simply a redistribution of money from those with more to those with less. It won't increase the money supply and thus doesn't cause inflation.

AnimalMuppet 10y ago
Yes and no. Say I'm a billionaire (I wish). I've got all this money. It's not going into food and rent. (OK, a tiny amount is going into food, but I can only eat three meals a day. And "rent" is more likely buying multi-million-dollar homes.) My money's in investments, maybe some luxuries. Now we go to BI. Now millions of what used to be my money are going to low-income people. They're spending it on food and rent. No, it's not new money, but it's new to the rent market in whatever city. Will that tend to drive rents up? I think so, yes.
- sokoloff 10y ago
  Absolutely. If I can find some inside track that UBI is coming, I'll be buying a lot of low-end rental property, hopefully before it runs up.
  - macawfish 10y ago
    It's like a game of Monopoly where everyone gets more money, including the people who already have Board Walk and Park Place, etc. #WWJD? Flip the board over. Jubilee.
    - sokoloff 10y ago
      UBI doesn't have that property at all. UBI consciously, intentionally, and overtly transfers money from the net taxpayers to the net benefit receivers. (I support it, but it's absolutely an income transfer mechanism from the higher income to the lower income populations.) The fact that the "rich" also receive $650/mo in UBI is completely swamped by the fact that they'll pay $30K/month or more in income tax to fund the program.
    - gnaritas 10y ago
      > It's like a game of Monopoly where everyone gets more money, No it isn't, not even remotely.
  - deleted 10y ago
    [deleted]
- flukus 10y ago
  The free market is a tool, a really good one, but just a tool. If it stops producing desirable outcomes then we can use other tools. Most nations have government housing which serves not just to house the poorest but to put a cap on how much people in the next rung up of society are willing to pay for housing.
mindslight 10y ago
Even if not implemented through monetary inflation, BI will cause price inflation. Housing asset prices are primarily constrained by the affordability of rent - either to a landlord or directly to the bank. If everybody can spend twice as much on rent then rent just doubles, and if interest rates remain the same then paper appraisals double. BI seems desirable because it addresses a glaring symptom of the inflationary treadmill. But if the treadmill remains the explicit national policy ("full employment"), BI will really just give us even more rope to hang ourselves. The sustainable answer is higher interest rates, so that frugal people can be rewarded for channeling discretionary spending towards paying off principle. But this would diminish our "service economy", which is all we have left after gutting domestic manufacturing. I think what we're really witnessing is an erosion of money as a decentralized store of value, part of the general centralization of power enabled by digital communication networks.
- tmnvix 10y ago
  > Housing asset prices are primarily constrained by the affordability of rent In a low interest rate environment this is not really true. Speculative booms can and do occur (see Australia). During such booms the ratio of house prices to rents diverges significantly. It is rents that are constrained by wages - not house prices (people don't take out loans to pay rent like they do to buy houses).
  - mindslight 10y ago
    Sure, there are transient booms and busts. But as you imply, those are exceptions. Long term, apartment rents are constrained by wages and likewise monthly payments on mortgages are constrained by wages. Those monthly payments are directly related to interest rate and total asset price.
- gnaritas 10y ago
  > If everybody can spend twice as much on rent t False presumption, BI will not enable everyone to spend twice as much on rent. > BI will cause price inflation. Unfounded. > The sustainable answer is higher interest rates, so that frugal people can be rewarded for channeling discretionary spending towards paying off principle. That doesn't remotely address the issue that BI attempts to solve, lack of available jobs for people due to the effects of automation.

AnimalMuppet 10y ago

Yes and no. Say I'm a billionaire (I wish). I've got all this money. It's not going into food and rent. (OK, a tiny amount is going into food, but I can only eat three meals a day. And "rent" is more likely buying multi-million-dollar homes.) My money's in investments, maybe some luxuries. Now we go to BI. Now millions of what used to be my money are going to low-income people. They're spending it on food and rent. No, it's not new money, but it's new to the rent market in whatever city. Will that tend to drive rents up? I think so, yes.

sokoloff 10y ago
Absolutely. If I can find some inside track that UBI is coming, I'll be buying a lot of low-end rental property, hopefully before it runs up.
- macawfish 10y ago
  It's like a game of Monopoly where everyone gets more money, including the people who already have Board Walk and Park Place, etc. #WWJD? Flip the board over. Jubilee.
  - sokoloff 10y ago
    UBI doesn't have that property at all. UBI consciously, intentionally, and overtly transfers money from the net taxpayers to the net benefit receivers. (I support it, but it's absolutely an income transfer mechanism from the higher income to the lower income populations.) The fact that the "rich" also receive $650/mo in UBI is completely swamped by the fact that they'll pay $30K/month or more in income tax to fund the program.
  - gnaritas 10y ago
    > It's like a game of Monopoly where everyone gets more money, No it isn't, not even remotely.
- deleted 10y ago
  [deleted]
flukus 10y ago
The free market is a tool, a really good one, but just a tool. If it stops producing desirable outcomes then we can use other tools. Most nations have government housing which serves not just to house the poorest but to put a cap on how much people in the next rung up of society are willing to pay for housing.

mindslight 10y ago

Even if not implemented through monetary inflation, BI will cause price inflation. Housing asset prices are primarily constrained by the affordability of rent - either to a landlord or directly to the bank. If everybody can spend twice as much on rent then rent just doubles, and if interest rates remain the same then paper appraisals double. BI seems desirable because it addresses a glaring symptom of the inflationary treadmill. But if the treadmill remains the explicit national policy ("full employment"), BI will really just give us even more rope to hang ourselves. The sustainable answer is higher interest rates, so that frugal people can be rewarded for channeling discretionary spending towards paying off principle. But this would diminish our "service economy", which is all we have left after gutting domestic manufacturing. I think what we're really witnessing is an erosion of money as a decentralized store of value, part of the general centralization of power enabled by digital communication networks.

tmnvix 10y ago
> Housing asset prices are primarily constrained by the affordability of rent In a low interest rate environment this is not really true. Speculative booms can and do occur (see Australia). During such booms the ratio of house prices to rents diverges significantly. It is rents that are constrained by wages - not house prices (people don't take out loans to pay rent like they do to buy houses).
- mindslight 10y ago
  Sure, there are transient booms and busts. But as you imply, those are exceptions. Long term, apartment rents are constrained by wages and likewise monthly payments on mortgages are constrained by wages. Those monthly payments are directly related to interest rate and total asset price.
gnaritas 10y ago
> If everybody can spend twice as much on rent t False presumption, BI will not enable everyone to spend twice as much on rent. > BI will cause price inflation. Unfounded. > The sustainable answer is higher interest rates, so that frugal people can be rewarded for channeling discretionary spending towards paying off principle. That doesn't remotely address the issue that BI attempts to solve, lack of available jobs for people due to the effects of automation.