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> Price control? Is this some sort of a joke? No, UBI only works if you institute price controls, or if there is a mass migration to rural areas, Otherwise, i

by _rpd 8y ago

> Price control? Is this some sort of a joke? No, UBI only works if you institute price controls, or if there is a mass migration to rural areas, Otherwise, it just sparks an inflationary spiral. The spiral is even quicker if UBI is 'adjusted' for regional cost of living.

dragonwriter 8y ago
> No, UBI only works if you institute price controls, or if there is a mass migration to rural areas, Otherwise, it just sparks an inflationary spiral. There is good reason to think that a tax-supported UBI at any level would, in fact, lead to price inflation for goods disproportionately in demand at the low end of the income scale, such that the net benefit of a UBI to the lowest-income recipients would be less than would be expected by consideration of the nominal benefit and pre-policy price levels, sure. The idea that it would just spark an inflationary spiral, OTOH, something that needs some support.
- _rpd 8y ago
  > The idea that it would just spark an inflationary spiral, OTOH, something that needs some support. Fair point. My assumption is that any political movement that institutes UBI in the first place would add automatic indexing to CPI either in the initial bill or soon after the first inflationary surge. Even if (miraculously) resisted at the federal level, the pressure to automatically index in urban areas would be overwhelming and even a few major cities with local indexing laws would still spark the inflationary spiral.
  - dllthomas 8y ago
    Yeah, the BI level should be pegged to targeted inflation, not observed or expected inflation.
    - dragonwriter 8y ago
      No, IMO, the BI level should be pegged to revenue from a dedicated source (or dedicated share of a general source) divided by recipients, with a reserve that is released under a pre-set formula to avoid or mitigate reductions in short term revenue/beneficiary downturns.
      - dllthomas 8y ago
        Right, I recall you having said that before, and I guess I never thought too deep about it :-P I'm gonna go with "maybe" - there are a whole lot of details there and there may well be good plans in that space. I'd like to get back to this when I have a bit more bandwidth.

by _rpd 8y ago

dragonwriter 8y ago

> No, UBI only works if you institute price controls, or if there is a mass migration to rural areas, Otherwise, it just sparks an inflationary spiral. There is good reason to think that a tax-supported UBI at any level would, in fact, lead to price inflation for goods disproportionately in demand at the low end of the income scale, such that the net benefit of a UBI to the lowest-income recipients would be less than would be expected by consideration of the nominal benefit and pre-policy price levels, sure. The idea that it would just spark an inflationary spiral, OTOH, something that needs some support.

_rpd 8y ago
> The idea that it would just spark an inflationary spiral, OTOH, something that needs some support. Fair point. My assumption is that any political movement that institutes UBI in the first place would add automatic indexing to CPI either in the initial bill or soon after the first inflationary surge. Even if (miraculously) resisted at the federal level, the pressure to automatically index in urban areas would be overwhelming and even a few major cities with local indexing laws would still spark the inflationary spiral.
- dllthomas 8y ago
  Yeah, the BI level should be pegged to targeted inflation, not observed or expected inflation.
  - dragonwriter 8y ago
    No, IMO, the BI level should be pegged to revenue from a dedicated source (or dedicated share of a general source) divided by recipients, with a reserve that is released under a pre-set formula to avoid or mitigate reductions in short term revenue/beneficiary downturns.
    - dllthomas 8y ago
      Right, I recall you having said that before, and I guess I never thought too deep about it :-P I'm gonna go with "maybe" - there are a whole lot of details there and there may well be good plans in that space. I'd like to get back to this when I have a bit more bandwidth.