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> Well, it's just taking money out of circulation with taxes and paying it out again. It's not inherently speeding anything up - if anything, slowing it down, s

> Well, it's just taking money out of circulation with taxes and paying it out again. It's not inherently speeding anything up - if anything, slowing it down, since it spends some time in the governments pockets. This is completely wrong. The principle I'm referring to is a standard component of basic macroeconomics and is completely uncontroversial among economists. There's lots of literature about this effect if you'd like to learn more.

fulafel 8y ago
Are you referring to "velocity of money"? Yes, it's a thing and economists agree it's a thing. But it does not follow that UBI causes runaway inflation - as we covered above. And there is certainly no consensus among economists about runaway inflation from UBI. (Unless you care to provide references..? I just did a search and came up emty) Do you think that UBI is qualitatively different from normal tax financed income transfers, from inflation POV, or do you think that just bigger income transfers cause runaway inflation?
- mercutio2 8y ago
  I’m a proponent of UBI, so I suspect we’re on the same side of this argument. Still, it seems to me you’re arguing a straw man. You claimed, “It does not increase the amount of money in circulation”, and that was all chimeracoder was arguing with. You’re responding as if chimeracoder was arguing increasing the velocity of money will automatically cause runaway price inflation. That’s not what chimeracoder was arguing, though. As it happens, I think you’re both right, the relevant value for economic activity is the money supply times velocity of money, UBI would likely modestly increase velocity of money but not money supply, the increase in their product would likely cause a modest inflationary shock. That shock would probably be somewhat offset by dramatic increases in geographic mobility and changes in the distribution and supply of low wage labor for unpleasant jobs. Sensitivity to housing costs would change in unknown ways, with landlords reaping somewhere between modest and huge windfalls in low housing supply areas, and likely smaller windfalls in areas closer to supply/demand balance, which would tend to make areas with good housing supply more appealing.

fulafel 8y ago

Are you referring to "velocity of money"? Yes, it's a thing and economists agree it's a thing. But it does not follow that UBI causes runaway inflation - as we covered above. And there is certainly no consensus among economists about runaway inflation from UBI. (Unless you care to provide references..? I just did a search and came up emty) Do you think that UBI is qualitatively different from normal tax financed income transfers, from inflation POV, or do you think that just bigger income transfers cause runaway inflation?

mercutio2 8y ago
I’m a proponent of UBI, so I suspect we’re on the same side of this argument. Still, it seems to me you’re arguing a straw man. You claimed, “It does not increase the amount of money in circulation”, and that was all chimeracoder was arguing with. You’re responding as if chimeracoder was arguing increasing the velocity of money will automatically cause runaway price inflation. That’s not what chimeracoder was arguing, though. As it happens, I think you’re both right, the relevant value for economic activity is the money supply times velocity of money, UBI would likely modestly increase velocity of money but not money supply, the increase in their product would likely cause a modest inflationary shock. That shock would probably be somewhat offset by dramatic increases in geographic mobility and changes in the distribution and supply of low wage labor for unpleasant jobs. Sensitivity to housing costs would change in unknown ways, with landlords reaping somewhere between modest and huge windfalls in low housing supply areas, and likely smaller windfalls in areas closer to supply/demand balance, which would tend to make areas with good housing supply more appealing.