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I don’t know why you were downvoted because you’re right. A simple thought experiment can prove it: give everyone $1 million every year starting today. Is eve

by DougN7 8y ago

I don’t know why you were downvoted because you’re right. A simple thought experiment can prove it: give everyone $1 million every year starting today. Is everyone suddenly rich? Just for a few days. Eventually milk will cost $500/gallon. The effects of Supply and demand can’t be legislated out of existence.

zimzam 8y ago
That’s like saying any inflation is bad because if it were a million percent bad things would happen. It doesn’t tell us anything about reality.
- DougN7 8y ago
  The inflation would render the money we gave everyone nearly worthless, by approximately the amount given out. It’s similar to adding six zeros to every bank account.
ball_of_lint 8y ago
Sure, a massive influx of newly minted money will cause inflation. That's a given. But it's not sustainable and clearly not a sensible way to implement this policy. If we instead took this money from other taxes most likely there'd be some inflation, but not enough to make the money useless. Finally, I know 1m was a hyperbole but basic income doesn't need to guarantee you can live comfortably anywhere without working, only somewhere. Downtown SF? Nope. Most of CA? Still probably too expensive. Midwest? Now we're talking.
- notahacker 8y ago
  I think the problem is less overall inflation, which can be stabilised, and more distributional impact. Sure, the costs of slum housing won't rise 1 to 1 so people living in it will still feel slightly better off, but slum landlords in many areas with limited housing availability will still capture much/most of those gains (which are difficult to tax away without also affecting productive businesses) in the form of massive price increases of limited-supply budget housing. Meanwhile, someone on the other end is losing out by paying for the UBI, and that probably includes people in middle class incomes facing higher taxes and cost pressures on their own taxes. Of course, any redistribution programme has undesirable distributional impacts as well as desired ones, but they're likely to be worse if your programme is as unsophisticated as "let's just give everybody exactly the same entitlements irrespective of need and put gross taxes up to pay for any difference"
function_seven 8y ago
We don't have enough money in the supply to provide $1m to everyone annually. UBI isn't a money-printing operation. It's a redistribution scheme. The money supply is fixed, but some of it is scraped off the top of the mountain and used to fill in the valley below. Yes, there would be inflation as a result. But not as much as the median increase in income. Say that gallon of milk is $5 today. UBI increases all incomes by $10,000 a year. Milk may rise to $5.50/gal (10% inflation), but the median income would have risen something like 25%. UBI might still be a bad idea, or have unintended consequences, but they're going to be more subtle and indirect than hyperinflation.

by DougN7 8y ago

zimzam 8y ago

That’s like saying any inflation is bad because if it were a million percent bad things would happen. It doesn’t tell us anything about reality.

DougN7 8y ago
The inflation would render the money we gave everyone nearly worthless, by approximately the amount given out. It’s similar to adding six zeros to every bank account.

ball_of_lint 8y ago

Sure, a massive influx of newly minted money will cause inflation. That's a given. But it's not sustainable and clearly not a sensible way to implement this policy. If we instead took this money from other taxes most likely there'd be some inflation, but not enough to make the money useless. Finally, I know 1m was a hyperbole but basic income doesn't need to guarantee you can live comfortably anywhere without working, only somewhere. Downtown SF? Nope. Most of CA? Still probably too expensive. Midwest? Now we're talking.

notahacker 8y ago
I think the problem is less overall inflation, which can be stabilised, and more distributional impact. Sure, the costs of slum housing won't rise 1 to 1 so people living in it will still feel slightly better off, but slum landlords in many areas with limited housing availability will still capture much/most of those gains (which are difficult to tax away without also affecting productive businesses) in the form of massive price increases of limited-supply budget housing. Meanwhile, someone on the other end is losing out by paying for the UBI, and that probably includes people in middle class incomes facing higher taxes and cost pressures on their own taxes. Of course, any redistribution programme has undesirable distributional impacts as well as desired ones, but they're likely to be worse if your programme is as unsophisticated as "let's just give everybody exactly the same entitlements irrespective of need and put gross taxes up to pay for any difference"

function_seven 8y ago

We don't have enough money in the supply to provide $1m to everyone annually. UBI isn't a money-printing operation. It's a redistribution scheme. The money supply is fixed, but some of it is scraped off the top of the mountain and used to fill in the valley below. Yes, there would be inflation as a result. But not as much as the median increase in income. Say that gallon of milk is $5 today. UBI increases all incomes by $10,000 a year. Milk may rise to $5.50/gal (10% inflation), but the median income would have risen something like 25%. UBI might still be a bad idea, or have unintended consequences, but they're going to be more subtle and indirect than hyperinflation.