4 ms·

If assuming that everyone was also receiving $5k/mo "UBI"... Nothing different, because the cost of everything I buy will go up by a total of $5k/mo. Hence why

If assuming that everyone was also receiving $5k/mo "UBI"... Nothing different, because the cost of everything I buy will go up by a total of $5k/mo. Hence why UBI is flawed. My total purchasing power will be unchanged. Edit: Maybe I missed it but... I can't find this post anywhere on the HackerNews pages anymore. That's rather funny. It was quickly pointed out how flawed a theory UBI is by multiple commenters and then poof. Funny...

ronilan 9y ago
It will most likely be worse as inflation will hit widely consumed products (basics) harder than least consumed ones. Quantitive easing 2.0. Anyone said housing?
- eesmith 9y ago
  Including all the cheap housing available in the small towns which have lost population because people are leaving for the big cities for jobs?
datpuz 9y ago
This is so profoundly wrong on so many levels. Mind backing up your claim with some math? Thanks.
- Cshelton 9y ago
  It's pretty basic economic theory of supply and demand. If the purchasing power of everyone goes up equally, the price of the same supply will also go up equally, and so in the end, nothing changes. The poor will still be poor, the middle class will still be middle class and the rich will still be rich.
  - TheSmiddy 9y ago
    The purchasing power doesn't go up equally though, the questioners proposed rate would quadruple many peoples incomes at the low end while barely being a drop in the ocean at the high end. If the value of the $5k truly drops to $0 as you are suggesting then the value of ALL money drops to 0. Regardless of how it plays out, by putting in place a guaranteed floor it will make the poor relatively richer that they are today and shrink the gap between the poor and the middle class.
    - dogma1138 9y ago
      You are correct which is what causes the problem. 5K would not affect the price of luxury items it would however affect the price of common commodities since now their largest consumption base has much higher purchasing power. Milk is cheap because everyone drinks it and for every billionaire who wouldn’t mind paying $1000 for a gallon of milk there are 100,000 poor people that wouldn’t be able to pay more than $5. If those people would get and additional $60000 per annum to spend the prices for all basic commodities and services will go up. UBI won’t affect the price of a $250000 car much but you should expect every basic commodity or service like food, communications, utilities, transport etc. to spike.
      - TheSmiddy 9y ago
        When the prices go up this creates an area of high profitability for a new company to enter and undercut the competition. Since most basic commodities compete primarily on price I would not expect prices to rise much higher. Utilities have a bit more lock in due to their natural monopolies so can potentially be more of an issue however things like off grid solar+batteries are getting cheaper and cheaper every year, effectively putting a price ceiling on the electricity company. Wireless and LEO satellite internet services are starting to ramp up which will put pressure on incumbent ISPs. Most gas appliances can be replaced with electric etc.
TheSmiddy 9y ago
You're assuming you will quit your job and do nothing but that is a choice. You could choose to stay in your job and continue to progress your career. Alternatively you could choose to quit and finally dedicate some real time to that project you've been dreaming of, save in the knowledge that if it fails you won't go homeless.
- Cshelton 9y ago
  You misunderstood what I meant. I would still keep my job. I would do nothing DIFFERENT than what I do now. Meaning, everything I spend my money on right now will cost more as everyone receives $5k/mo. So in the end, I won't be able to quit my job, I won't be able to work less, I won't be able to buy more than currently. Literally nothing changes. This concept is completely loss on people who believe UBI is a real thing... it's not. See the reasons as to why Universities are so expensive now. Hint: The Gov. offered more money to students, Uni's saw that there is more money out there... jack the price!
  - TheSmiddy 9y ago
    A UBI is supposed to only cover basic needs, most basic goods compete heavily on price so if the market as a whole raised their prices to take advantage of the increased available funds that would open up a space for a smaller company to capture more of the market by keeping their prices low. The biggest risk for exploitation of UBI is in housing, but that is already a problem even without UBI. On another note a $5k per month UBI would be excessive, I personally prefer starting with a $1k per month UBI and slowly ramping up to $2k then inflation adjusting from there.
    - Cshelton 9y ago
      Where do you think this money to pay for a UBI is coming from? After reading Sam A's posts about UBI and the comments here on HN, I'm blown away. How can so many "smart" people disregard economics and be so so out of touch... Sam, if you see this, come live in Texas, or Kansas, or Georgia, or anywhere but your bubble for some time. Encourage your SV friends to do the same. I implore you to see just how out of touch with reality you are on this topic. And NO, taxing the rich wouldn't even be able to pay for it, they don't even have enough for that. Also, the rich are mobile, there would be no more rich. We'd all be poor with our $5k/mo if you took it from the rich. The current way of paying for federal programs is extremely unsustainable. Where will this new $5k/mo come from? Let's start a one level up from yourself: your employer. The first place to go for the UBI money. Guess what, only two things will happen if the costs of employees goes up for an employer. 1. They reduce the work force, 2. They raise prices. But now we have unemployed people receiving only $5k/mo. This cycle will continue and the only supply of money left is the fake money the gov "prints". What happens then? Who pays for it? Maybe look at Greece/Spain/Italy... Germany has somehow been suckered into paying for a large amount of their welfare. The U.K. was smart and bailed. But what if America followed suit? Who in the world will bail out America after that point? Who/what country will pay every American $5k/mo? Where does this end? The ONLY way to achieve covering the basic needs for the masses is if the resources for those needs were free. Both in money and energy. Power, free and unlimited. Food, free and unlimited. I've only skimmed the surface, and may not have provided the best examples above, but this is a topic that thousands of research papers are written on and even more discussion outside of that. It's too much. I'm still waiting for the day for someone to explain how trickle up economics works. I have yet to hear a convincing argument/example of it working, ever. It just doesn't. When was the last time a poor person offered you a job?
gjm11 9y ago
> because the cost of everything I buy will go up by a total of $5k/mo That isn't how it works. It isn't how it could work. Simple proof: Suppose there are two people, one of whom buys all the same things the other buys plus some more. It is not possible for both of them to find that the cost of what they buy goes up by the same $5k/month. It is true that if $5k/mo started appearing in everyone's bank account by magic then there would be inflation. But there is no guarantee that the amount of that inflation would be such as to leave everyone in the exact same situation as before. In particular, some people would gain relative to others. And some possible people would gain (or lose) relative to others. In particular, there would be changes to your situation relative to that of hypothetical-you-who-just-quit-their-job. Or to hypothetical-you-who-just-got-a-job-at-a-hedge-fund. Or whatever. Which might make a difference to your choices. Which is the point of the question.
mezzode 9y ago
How about a slow, random rollout? That should mean prices can't just be increased across the board since not everyone is getting UBI so wouldn't be willing to pay the higher cost. EDIT: Actually, in a sensible market wouldn't competition handle this? Those who don't increase their prices would undercut their competitors, so there's no incentive to raise prices since you would just lose market share.

ronilan 9y ago

It will most likely be worse as inflation will hit widely consumed products (basics) harder than least consumed ones. Quantitive easing 2.0. Anyone said housing?

eesmith 9y ago
Including all the cheap housing available in the small towns which have lost population because people are leaving for the big cities for jobs?

datpuz 9y ago

This is so profoundly wrong on so many levels. Mind backing up your claim with some math? Thanks.

Cshelton 9y ago
It's pretty basic economic theory of supply and demand. If the purchasing power of everyone goes up equally, the price of the same supply will also go up equally, and so in the end, nothing changes. The poor will still be poor, the middle class will still be middle class and the rich will still be rich.
- TheSmiddy 9y ago
  The purchasing power doesn't go up equally though, the questioners proposed rate would quadruple many peoples incomes at the low end while barely being a drop in the ocean at the high end. If the value of the $5k truly drops to $0 as you are suggesting then the value of ALL money drops to 0. Regardless of how it plays out, by putting in place a guaranteed floor it will make the poor relatively richer that they are today and shrink the gap between the poor and the middle class.
  - dogma1138 9y ago
    You are correct which is what causes the problem. 5K would not affect the price of luxury items it would however affect the price of common commodities since now their largest consumption base has much higher purchasing power. Milk is cheap because everyone drinks it and for every billionaire who wouldn’t mind paying $1000 for a gallon of milk there are 100,000 poor people that wouldn’t be able to pay more than $5. If those people would get and additional $60000 per annum to spend the prices for all basic commodities and services will go up. UBI won’t affect the price of a $250000 car much but you should expect every basic commodity or service like food, communications, utilities, transport etc. to spike.
    - TheSmiddy 9y ago
      When the prices go up this creates an area of high profitability for a new company to enter and undercut the competition. Since most basic commodities compete primarily on price I would not expect prices to rise much higher. Utilities have a bit more lock in due to their natural monopolies so can potentially be more of an issue however things like off grid solar+batteries are getting cheaper and cheaper every year, effectively putting a price ceiling on the electricity company. Wireless and LEO satellite internet services are starting to ramp up which will put pressure on incumbent ISPs. Most gas appliances can be replaced with electric etc.

TheSmiddy 9y ago

You're assuming you will quit your job and do nothing but that is a choice. You could choose to stay in your job and continue to progress your career. Alternatively you could choose to quit and finally dedicate some real time to that project you've been dreaming of, save in the knowledge that if it fails you won't go homeless.

Cshelton 9y ago
You misunderstood what I meant. I would still keep my job. I would do nothing DIFFERENT than what I do now. Meaning, everything I spend my money on right now will cost more as everyone receives $5k/mo. So in the end, I won't be able to quit my job, I won't be able to work less, I won't be able to buy more than currently. Literally nothing changes. This concept is completely loss on people who believe UBI is a real thing... it's not. See the reasons as to why Universities are so expensive now. Hint: The Gov. offered more money to students, Uni's saw that there is more money out there... jack the price!
- TheSmiddy 9y ago
  A UBI is supposed to only cover basic needs, most basic goods compete heavily on price so if the market as a whole raised their prices to take advantage of the increased available funds that would open up a space for a smaller company to capture more of the market by keeping their prices low. The biggest risk for exploitation of UBI is in housing, but that is already a problem even without UBI. On another note a $5k per month UBI would be excessive, I personally prefer starting with a $1k per month UBI and slowly ramping up to $2k then inflation adjusting from there.
  - Cshelton 9y ago
    Where do you think this money to pay for a UBI is coming from? After reading Sam A's posts about UBI and the comments here on HN, I'm blown away. How can so many "smart" people disregard economics and be so so out of touch... Sam, if you see this, come live in Texas, or Kansas, or Georgia, or anywhere but your bubble for some time. Encourage your SV friends to do the same. I implore you to see just how out of touch with reality you are on this topic. And NO, taxing the rich wouldn't even be able to pay for it, they don't even have enough for that. Also, the rich are mobile, there would be no more rich. We'd all be poor with our $5k/mo if you took it from the rich. The current way of paying for federal programs is extremely unsustainable. Where will this new $5k/mo come from? Let's start a one level up from yourself: your employer. The first place to go for the UBI money. Guess what, only two things will happen if the costs of employees goes up for an employer. 1. They reduce the work force, 2. They raise prices. But now we have unemployed people receiving only $5k/mo. This cycle will continue and the only supply of money left is the fake money the gov "prints". What happens then? Who pays for it? Maybe look at Greece/Spain/Italy... Germany has somehow been suckered into paying for a large amount of their welfare. The U.K. was smart and bailed. But what if America followed suit? Who in the world will bail out America after that point? Who/what country will pay every American $5k/mo? Where does this end? The ONLY way to achieve covering the basic needs for the masses is if the resources for those needs were free. Both in money and energy. Power, free and unlimited. Food, free and unlimited. I've only skimmed the surface, and may not have provided the best examples above, but this is a topic that thousands of research papers are written on and even more discussion outside of that. It's too much. I'm still waiting for the day for someone to explain how trickle up economics works. I have yet to hear a convincing argument/example of it working, ever. It just doesn't. When was the last time a poor person offered you a job?

gjm11 9y ago

> because the cost of everything I buy will go up by a total of $5k/mo That isn't how it works. It isn't how it could work. Simple proof: Suppose there are two people, one of whom buys all the same things the other buys plus some more. It is not possible for both of them to find that the cost of what they buy goes up by the same $5k/month. It is true that if $5k/mo started appearing in everyone's bank account by magic then there would be inflation. But there is no guarantee that the amount of that inflation would be such as to leave everyone in the exact same situation as before. In particular, some people would gain relative to others. And some possible people would gain (or lose) relative to others. In particular, there would be changes to your situation relative to that of hypothetical-you-who-just-quit-their-job. Or to hypothetical-you-who-just-got-a-job-at-a-hedge-fund. Or whatever. Which might make a difference to your choices. Which is the point of the question.

mezzode 9y ago

How about a slow, random rollout? That should mean prices can't just be increased across the board since not everyone is getting UBI so wouldn't be willing to pay the higher cost. EDIT: Actually, in a sensible market wouldn't competition handle this? Those who don't increase their prices would undercut their competitors, so there's no incentive to raise prices since you would just lose market share.