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If the economy doesn't produce more(or even less) then all that money would go to pay for the same(or less) amount of items.
by sharemywin 8y ago
If the economy doesn't produce more(or even less) then all that money would go to pay for the same(or less) amount of items.
- andrewla 8y agoYes, I think that's true, although the magnitude of the effect is hard to determine, and I think is likely to be very small. If the average purchaser of a particular class of good (say, eggs) is making 10xUBI post-tax, then getting one unit of UBI in addition to their base salary shifts the demand curve enough that you'd expect to see a price increase proportional to that increase -- so a dozen eggs goes from costing .05xUBI to .055xUBI, purely as an economic rent. But for a person making less than the average salary, like 2xUBI or 0xUBI, their egg-purchasing power increases dramatically. A 2xUBI person previously could afford to buy 40 units of egg, and can now afford 54 eggs, a 36% increase in their buying power.