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Monetary inflation is not the only source of inflation. There is also cost inflation. If renters suddenly have additional disposable income, landlords will ra

by _rpd 8y ago

Monetary inflation is not the only source of inflation. There is also cost inflation. If renters suddenly have additional disposable income, landlords will raise the rent to absorb the additional disposable income. And the same with housing buyers and sellers. Unless there is a mass migration from urban to rural areas, there will be a cost inflation that exactly equals the additional disposable income. Cost of living adjustments will just make things worse. Annual increases in the basic income adjusted to inflation will cause an inflationary spiral and eventually hyperinflation. This is not a minor concern.

mercutio2 8y ago
“Unless there is a mass migration from urban to rural areas” -> I expect this to happen, and it would be great. I also disagree with your premise, because elasticity of demand for housing isn’t zero, even if you assume zero regional mobility.
- _rpd 8y ago
  > “Unless there is a mass migration from urban to rural areas” -> I expect this to happen, and it would be great. UBI does open up possibilities for rural communities, but the cultural trend has been the opposite for a long time. I don't see it reversing quickly. > I also disagree with your premise, because elasticity of demand for housing isn’t zero, even if you assume zero regional mobility. It isn't zero, but it is very low. Existing house owners fight tooth and nail to prevent higher density zoning. And new construction is slow to respond even to very strong pricing signals.
fulafel 8y ago
Of course some prices will rise and some will fall, because the new taxes will reduce income from different consumers than the biggest beneficisries are. If we want to prevent any price rises of poor people's products, this same argument could be used again any improvement in poverty / income equality, whether market based or income transfer based. If this is the wrong direction, should we make opposite changes - concentrate wealth in fewer hands? Anyway, in general it is not the case that prices would rise to consume all citizens' disposable income, foreastallyng all improvement in living standards. Your comment seems to conflate localized price changes with total real change stopping inflation, without justification.
- _rpd 8y ago
  > this same argument could be used again any improvement in poverty UBI is particularly susceptible because it is a one-time universal increase in income. The increaes is very predictable by landlords and housing sellers. > If this is the wrong direction, should we make opposite changes - concentrate wealth in fewer hands? Means-tested welfare, minincome, negative tax, minimum wage increases - all these are better than UBI. UBI needs to die as a meme. > in general it is not the case that prices would rise to consume all citizens' disposable income I believe that this is the case under UBI. Based just on housing alone! Even minimum wage increases are subverted by price rises. UBI would be costly and have minimal positive impact with the possibility of massive negative impact. It is the worst of all worlds. People need to understand that there are two UBIs - - Right wing UBI where welfare is liquidated and the proceeds distributed (to the tune of $8k/yr) -> increased income inequality, medieval levels of poverty - Democratic UBI where $24k is given to all and sundry funded by taxes on high income individuals and corporations + printing money -> hyperinflation, economic collapse Neither of these are futures that we want. Please consider alternatives.

by _rpd 8y ago

mercutio2 8y ago

“Unless there is a mass migration from urban to rural areas” -> I expect this to happen, and it would be great. I also disagree with your premise, because elasticity of demand for housing isn’t zero, even if you assume zero regional mobility.

_rpd 8y ago
> “Unless there is a mass migration from urban to rural areas” -> I expect this to happen, and it would be great. UBI does open up possibilities for rural communities, but the cultural trend has been the opposite for a long time. I don't see it reversing quickly. > I also disagree with your premise, because elasticity of demand for housing isn’t zero, even if you assume zero regional mobility. It isn't zero, but it is very low. Existing house owners fight tooth and nail to prevent higher density zoning. And new construction is slow to respond even to very strong pricing signals.

fulafel 8y ago

Of course some prices will rise and some will fall, because the new taxes will reduce income from different consumers than the biggest beneficisries are. If we want to prevent any price rises of poor people's products, this same argument could be used again any improvement in poverty / income equality, whether market based or income transfer based. If this is the wrong direction, should we make opposite changes - concentrate wealth in fewer hands? Anyway, in general it is not the case that prices would rise to consume all citizens' disposable income, foreastallyng all improvement in living standards. Your comment seems to conflate localized price changes with total real change stopping inflation, without justification.

_rpd 8y ago
> this same argument could be used again any improvement in poverty UBI is particularly susceptible because it is a one-time universal increase in income. The increaes is very predictable by landlords and housing sellers. > If this is the wrong direction, should we make opposite changes - concentrate wealth in fewer hands? Means-tested welfare, minincome, negative tax, minimum wage increases - all these are better than UBI. UBI needs to die as a meme. > in general it is not the case that prices would rise to consume all citizens' disposable income I believe that this is the case under UBI. Based just on housing alone! Even minimum wage increases are subverted by price rises. UBI would be costly and have minimal positive impact with the possibility of massive negative impact. It is the worst of all worlds. People need to understand that there are two UBIs - - Right wing UBI where welfare is liquidated and the proceeds distributed (to the tune of $8k/yr) -> increased income inequality, medieval levels of poverty - Democratic UBI where $24k is given to all and sundry funded by taxes on high income individuals and corporations + printing money -> hyperinflation, economic collapse Neither of these are futures that we want. Please consider alternatives.