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

by datpuz 9y ago

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.

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

by datpuz 9y ago

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

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.