4 ms·
This is my question as well. If the UBI is $1000/month, doesn't that become the new $0? But, this is what I figure, not being an economist, and just being someo
by intopieces 10y ago
This is my question as well. If the UBI is $1000/month, doesn't that become the new $0? But, this is what I figure, not being an economist, and just being someone who really wants UBI to be a thing:
With an influx of cash, people will be able to buy more, which creates incentives for actors in the market to create more products to eat up the new cash. More products = competition, which keeps prices low. Plus, people already have in mind how much they want to spend for a certain item. Take, for example, peanut butter. Rather than raising the price, the makers do things like decrease the amount of the product in the jar through redesigned packaging.
Just my pet theory. What I wonder is for things with terrible competition (rent, for example) what prevents those markets from just gobbling up the gains.
- Koshkin 10y ago> doesn't that become the new $0? I don't think so... Because $10,000 will not be the same as ten times zero. (Or, will it?)
- Kalium 10y agoIs it perhaps possible that your hypothesis might not account particularly well for inflation? One cannot pump cash arbitrarily into an economy with a limited amount of value. Past a certain point, the scarcity of money changes. If the UBI was $1,000,000/mo, I expect rents everywhere might soar and bread might cost $10k a loaf. There's more money, but the scarcity of goods doesn't change, so what happens is everything sprouts a couple of extra zeros. This is what runaway inflation can look like.
- malloryerik 10y agoIndeed rent can gobble up the gains. Look at how it has gobbled up the gains in the SF Bay Area.