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This is a misunderstanding of how both macro inflation occurs (money supply growing faster than true value of wealth it abstracts), and how price is set (supply

This is a misunderstanding of how both macro inflation occurs (money supply growing faster than true value of wealth it abstracts), and how price is set (supply and demand). UBI does not "create" new money and just give it to everyone (which would cause inflation). It's a wealth redistribution. That is, many people will see their income go down under UBI (probably most HN readers for example). The money supply will represent the same amount of wealth, what changes is who owns that wealth and as a result who decides how to use that wealth to consume. Regarding price changes, price is set by the amount of a good/service demanded by consumers, and the supply of the good/service created by suppliers. High discretionary income does cause the demand for certain goods/services to go up (especially luxuries), but UBI is so basic at $1k per month it won't make much of a change in the demand curve because the type of goods/services that will be consumed by someone living on UBI are so fundamental they are already consuming these goods at the same rate under the current system. So far as housing is concerned, UBI will pretty much "explode" the supply of acceptable housing for people living solely on UBI since they get access to housing in the entire US instead of having it constrained to locations where they could conceivably "make a living." I'm sure you realize what happens when supply increases drastically but demand stays somewhat constant (everyone has to live somewhere and you can only live in one place at once) -- the price of housing on avg will plummet considerably for UBI'ers.

bduerst 9y ago
>UBI does not "create" new money and just give it to everyone (which would cause inflation). It's a wealth redistribution. UBI is Universal Basic Income, meaning that income is increased for everyone universally. Nobody is claiming that money is created out of thin air. What you're thinking about is a negative income tax or some other disproportionately weighted welfare program.
- billmalarky 9y ago
  Not true see https://news.ycombinator.com/item?id=15306562 https://news.ycombinator.com/item?id=15306562
  - bduerst 9y ago
    That still doesn't explain why you think people are saying that money is created out of thin air. Increasing the income for the vast majority of the population inflates the prices of income-elastic goods and services.
greedo 9y ago
The idea of UBI at $1K per month shows that UBI advocates don't know how to do math. The US tax revenues (combined Fed and State) are roughly $6 Trillion. Giving 150 million people $12K per year is $1.8 Trillion. Unless you raise taxes by 1/3, you're going to cause inflation.
- billmalarky 9y ago
  This is a strawman attack. Everyone knows UBI will require an increase in taxes that's fundamentally how the wealth redistribution will work.
  - greedo 9y ago
    Not a strawman at all. Many UBI proponents claim that it's more efficient, by directly paying for services already provided. Then when called on that, they switch to your strawman that "Everyone knows UBI will require an increase in taxes..." Again, good luck trying to raise tax revenue 30% without killing the US economy.
  - ctdonath 9y ago
    My taxes are already pushing oppressive. Raise them further, and I'll seriously consider "going Galt" - cash in my investments, buy real estate & capital equipment outright, and live quite comfortably on $4000/mo ($UBI * family population). You're subsidizing the unproductive, and punishing the productive. I can be productive in untaxable ways.
    - billmalarky 9y ago
      >My taxes are already pushing oppressive. Raise them further, and I'll seriously consider "going Galt" Under UBI that would be your prerogative. Most highly productive individuals and all corporations will carry on producing. >You're subsidizing the unproductive, and punishing the productive. You may have moral qualms with a UBI system. You will need to come to terms with these doubts in the midterm future, as UBI will be the only system (we currently know of) capable of sustaining a market economy in a world where automation has displaced the workforce.
ctdonath 9y ago
Sounds like yet another argument trying to deny the law of supply-and-demand, like those who quote the laws of thermodynamics and then claim they have a perpetual motion machine. Instead of having to work for that first $1000/mo, it just...appears. Yes it was earned elsewhere, and whoever earned it won't miss it as much as the recipient will appreciate it, but since the recipient has done nothing for it, its local value plummets. Instead of some low-income people having $1000/mo for rent, now everyone has $1000/mo for rent - and basic prices will rise accordingly. I won't notice much change for losing a sub-1% of my income, but those for whom UBI is really intended can go from really struggling to renting (even buying) housing. With limited housing supply, suddenly prices will rise. While I'm a staunch advocate of "move already!" for solving economic problems, I don't see enough people moving - nor enough housing for them to move to - to cause "the price of housing on avg will plummet for UBIers". Imagine the poor section of town. Many/most rent. Suddenly, with no additional productivity, everyone is getting checks for $1000/mo. You think rent etc prices aren't going to suddenly skyrocket? I grasp your theory that people can now move to more affordable locations, not needing to be near jobs - but will they really? before they can, rent prices just shot up, consuming their newfound income. Destination rental prices similarly increase - still relatively attractive, but higher than before since there is more demand and more money to pay for it. Yes the supply of acceptable housing for UBIers increases, but those markets already existed and were already priced for a low-demand market; now you've "exploded" the demand - prices will rise, matching people who now have $1000/mo and few expenses.
- mbrameld 9y ago
  Here you claim to earn more than $100k every MONTH, yet in another comment you claim the amount you are taxed is nearing oppression. It sounds like maybe you're just saying whatever helps your argument at the time.
lvivier 9y ago
I’m not convinced that UBI will dramatically affect the housing supply for many people who would rely on it. Maybe you can expand on what you mean in light of an example: I live near Vancouver, which is the most expensive housing market in Canada. Poor people here have access to free health care, a provincial welfare program, and a permanent disability allowance. The income amount is enough to live on in some parts of the province, but not Vancouver. Still there's a glut of unemployed poor people who prefer substandard housing or homelessness over relocating to where they could afford to live. They don’t choose to live anywhere else, even though they're not in Vancouver to “make a living”. Programs aimed at helping the poor here focus on providing subsidized housing, not relocation. It seems to me that if UBI doesn’t help these people afford a better standard of living where they are now, then it won’t help them at all unless they’re forced to relocate. What am I missing?

bduerst 9y ago

>UBI does not "create" new money and just give it to everyone (which would cause inflation). It's a wealth redistribution. UBI is Universal Basic Income, meaning that income is increased for everyone universally. Nobody is claiming that money is created out of thin air. What you're thinking about is a negative income tax or some other disproportionately weighted welfare program.

billmalarky 9y ago
Not true see https://news.ycombinator.com/item?id=15306562 https://news.ycombinator.com/item?id=15306562
- bduerst 9y ago
  That still doesn't explain why you think people are saying that money is created out of thin air. Increasing the income for the vast majority of the population inflates the prices of income-elastic goods and services.

greedo 9y ago

The idea of UBI at $1K per month shows that UBI advocates don't know how to do math. The US tax revenues (combined Fed and State) are roughly $6 Trillion. Giving 150 million people $12K per year is $1.8 Trillion. Unless you raise taxes by 1/3, you're going to cause inflation.

billmalarky 9y ago
This is a strawman attack. Everyone knows UBI will require an increase in taxes that's fundamentally how the wealth redistribution will work.
- greedo 9y ago
  Not a strawman at all. Many UBI proponents claim that it's more efficient, by directly paying for services already provided. Then when called on that, they switch to your strawman that "Everyone knows UBI will require an increase in taxes..." Again, good luck trying to raise tax revenue 30% without killing the US economy.
- ctdonath 9y ago
  My taxes are already pushing oppressive. Raise them further, and I'll seriously consider "going Galt" - cash in my investments, buy real estate & capital equipment outright, and live quite comfortably on $4000/mo ($UBI * family population). You're subsidizing the unproductive, and punishing the productive. I can be productive in untaxable ways.
  - billmalarky 9y ago
    >My taxes are already pushing oppressive. Raise them further, and I'll seriously consider "going Galt" Under UBI that would be your prerogative. Most highly productive individuals and all corporations will carry on producing. >You're subsidizing the unproductive, and punishing the productive. You may have moral qualms with a UBI system. You will need to come to terms with these doubts in the midterm future, as UBI will be the only system (we currently know of) capable of sustaining a market economy in a world where automation has displaced the workforce.

ctdonath 9y ago

Sounds like yet another argument trying to deny the law of supply-and-demand, like those who quote the laws of thermodynamics and then claim they have a perpetual motion machine. Instead of having to work for that first $1000/mo, it just...appears. Yes it was earned elsewhere, and whoever earned it won't miss it as much as the recipient will appreciate it, but since the recipient has done nothing for it, its local value plummets. Instead of some low-income people having $1000/mo for rent, now everyone has $1000/mo for rent - and basic prices will rise accordingly. I won't notice much change for losing a sub-1% of my income, but those for whom UBI is really intended can go from really struggling to renting (even buying) housing. With limited housing supply, suddenly prices will rise. While I'm a staunch advocate of "move already!" for solving economic problems, I don't see enough people moving - nor enough housing for them to move to - to cause "the price of housing on avg will plummet for UBIers". Imagine the poor section of town. Many/most rent. Suddenly, with no additional productivity, everyone is getting checks for $1000/mo. You think rent etc prices aren't going to suddenly skyrocket? I grasp your theory that people can now move to more affordable locations, not needing to be near jobs - but will they really? before they can, rent prices just shot up, consuming their newfound income. Destination rental prices similarly increase - still relatively attractive, but higher than before since there is more demand and more money to pay for it. Yes the supply of acceptable housing for UBIers increases, but those markets already existed and were already priced for a low-demand market; now you've "exploded" the demand - prices will rise, matching people who now have $1000/mo and few expenses.

mbrameld 9y ago
Here you claim to earn more than $100k every MONTH, yet in another comment you claim the amount you are taxed is nearing oppression. It sounds like maybe you're just saying whatever helps your argument at the time.

lvivier 9y ago

I’m not convinced that UBI will dramatically affect the housing supply for many people who would rely on it. Maybe you can expand on what you mean in light of an example: I live near Vancouver, which is the most expensive housing market in Canada. Poor people here have access to free health care, a provincial welfare program, and a permanent disability allowance. The income amount is enough to live on in some parts of the province, but not Vancouver. Still there's a glut of unemployed poor people who prefer substandard housing or homelessness over relocating to where they could afford to live. They don’t choose to live anywhere else, even though they're not in Vancouver to “make a living”. Programs aimed at helping the poor here focus on providing subsidized housing, not relocation. It seems to me that if UBI doesn’t help these people afford a better standard of living where they are now, then it won’t help them at all unless they’re forced to relocate. What am I missing?