4 ms·

Mainly because economic velocity of money is higher and the inertia greater for money given to people who have none. If you give a rich person another $12k it

by stazz1 7y ago

Mainly because economic velocity of money is higher and the inertia greater for money given to people who have none. If you give a rich person another $12k it will go into a bank or some conceptual entity like a stock or share and will not actually help some human being directly which is the main point of guaranteed income. The main criticism is that giving everyone money costs a lot more and will also cause an undue spike in commodity prices. The more rich people you give some of the BI to, the higher the spike in commodity prices, and therefore the needing people are hurt again. It's the same reason we do not give billionaires food stamps, because the cost is subsidized by the populous indirectly through tax collection. It's not magic, UBI will not somehow be immune to the way currency has worked for thousands of years, and an increase in supply of money will only hurt those who have little, so that needs to be minimized.

mdorazio 7y ago
Right, but my point is how much more will it cost? If we're concerned about giving the 1% UBI, then it will, by definition, only cost 1% more. I personally don't think that's a problem. Also, if you want to means test it and only give it to poor people it's by definition no longer UBI, it's just welfare. Do you have any economic analysis you can point to that show commodity prices will inflate significantly under UBI for more than a short period of time? This is a criticism I see often from opponents of UBI, but I've yet to see an actual economic proof for it. In the real world prices generally tend to converge over time based on margins rather than on what people are willing to pay. It's not clear that UBI would immediately increase cost of production for commodities, so basic competition in markets suggests that prices would largely stay the same. This, of course, doesn't hold true for things like housing and healthcare that exist outside normal economic markets. It's also worth noting that there's a good chance UBI would act to reduce the hours worked by a significant number of people such that their total income remains the same as before. For example, if your target income is $50k and you're having to work two jobs today to make that much, the result of UBI for you would most likely be that you quit one of your jobs, still make $50k total, and use the extra time to have a better life. I don't put much stock in the idea that everyone who receives UBI will immediately turn around and use it as additional discretionary income rather than changing other behaviors that have knock-on economic effects.
- stazz1 7y ago
  Fun thought experiment: I have 100 apples created in my orchard yearly but this year I decided to create # fake apples from sugar to help "UBI" the village and I wanted to see the effects. There are 4 people out of 40 below the 3 apples/year mark and I served them in a PGI (progressive guaranteed income way). The inflation was 9 apples this year which means we minted 109 apples and had a 9% spike in commodity prices when we issue the UBI. At Turnson's orchard, they also have 40 people, 4 below the 3 Apples/year mark, but they decided to give everybody a guaranteed income of 3 apples. They call it "UBI" and claim it will work wonders. Let's see: Turnson creates 120 new apples to cover the UBI on top of the 100 apples his orchard actually produces. The inflation is 2.4x so people who had 200 apples got another 3 apples, and ended up with the equivalent value of 84.5 apples. People who had 0 apples also got 3 and ended up with a grand equivalent buying power during commodity spikes of 1.25 apples. At Turnson's orchard with UBI, the poorest of the poor ended up with 1.25 apples, and everybody else's currency devalued substantially. At our orchard, with PGI, we were able to give apples to the poorest and neediest without destroying our currency's value or buying power. Inflation 9% during issuance of currency (See Kuwait in 2011 doing their UBI thing - tis one googles deep.) At Turnson's in this example, inflation is 2.4x during currency issuance and is supposed to even-out to some midpoint between 1.0 and 2.4x. 1.09 to 1.0 has the midline of 1.045 so there is more longterm inflation no matter what. How much depends on how important you think it is to devalue currency by giving some to everyone at the same time. (Additionally, without an incentive to work, stay employed, or provide value to society, why would people not just accept their cheques and bail? Nobody in blind support of UBI seems to think there are freeloaders or slackers in the world)
  - mdorazio 7y ago
    Being condescending doesn't help you win arguments, it just makes you look like an asshole. Rather than actually answer my question with data or a study you instead decided to use a high-school level "thought experiment" to try and explain economics. Not cool. I understand economics quite well. I know how inflation works and how money supplies work. I didn't ask for explanations of those things. At this point, I seriously doubt you've even tried to see what the actual impacts of UBI would be before you decided it was a bad thing and decided to favor welfare. If you favor welfare because you think people should have to work, that's fine and it's an opinion I can respect. But please don't try and use garbage arguments to convince people your opinion is right. If you care to read some actual data, take a look at [1], in which a UBI equivalent in Mexico caused less than 1% inflation. As for your Kuwait example, I don't think you actually followed the long-term impact, in which inflation for non-food items was a non-issue after the initial spike [2] and continued to be a non-issue in the following year [3]. From the link: "With a great deal of public spending coming on-stream, and the effects of the substantial “Amiri” grant of KD1000 ($3605) awarded to every Kuwaiti, inflationary pressure is a concern. However, inflation dropped to an 11-month low of 4.6% in July, the last month for which figures were available, and the rate is expected to average 4.7% for full-year 2011, according to international press reports using figures from Kuwait’s Central Statistics Office. Food price inflation, at 9.7%, was worryingly high, but is likely to abate over the remainder of the year as international prices fall. Increases in housing costs – the biggest single component of Kuwait’s consumer price index (CPI) – are also cooling off, as much-needed new supply becomes available." [1] https://www.povertyactionlab.org/sites/default/files/publications/467_The-Price-Effect-of-Cash-versus-In-kind-Transfers_July%202017.pdf https://www.povertyactionlab.org/sites/default/files/publica... [2] https://oxfordbusinessgroup.com/news/kuwait-keeping https://oxfordbusinessgroup.com/news/kuwait-keeping [3] http://www.marcopolis.net/economy-of-kuwait-in-2012-growth-diversification-inflation-2806.htm http://www.marcopolis.net/economy-of-kuwait-in-2012-growth-d...

by stazz1 7y ago

mdorazio 7y ago

Right, but my point is how much more will it cost? If we're concerned about giving the 1% UBI, then it will, by definition, only cost 1% more. I personally don't think that's a problem. Also, if you want to means test it and only give it to poor people it's by definition no longer UBI, it's just welfare. Do you have any economic analysis you can point to that show commodity prices will inflate significantly under UBI for more than a short period of time? This is a criticism I see often from opponents of UBI, but I've yet to see an actual economic proof for it. In the real world prices generally tend to converge over time based on margins rather than on what people are willing to pay. It's not clear that UBI would immediately increase cost of production for commodities, so basic competition in markets suggests that prices would largely stay the same. This, of course, doesn't hold true for things like housing and healthcare that exist outside normal economic markets. It's also worth noting that there's a good chance UBI would act to reduce the hours worked by a significant number of people such that their total income remains the same as before. For example, if your target income is $50k and you're having to work two jobs today to make that much, the result of UBI for you would most likely be that you quit one of your jobs, still make $50k total, and use the extra time to have a better life. I don't put much stock in the idea that everyone who receives UBI will immediately turn around and use it as additional discretionary income rather than changing other behaviors that have knock-on economic effects.

stazz1 7y ago
Fun thought experiment: I have 100 apples created in my orchard yearly but this year I decided to create # fake apples from sugar to help "UBI" the village and I wanted to see the effects. There are 4 people out of 40 below the 3 apples/year mark and I served them in a PGI (progressive guaranteed income way). The inflation was 9 apples this year which means we minted 109 apples and had a 9% spike in commodity prices when we issue the UBI. At Turnson's orchard, they also have 40 people, 4 below the 3 Apples/year mark, but they decided to give everybody a guaranteed income of 3 apples. They call it "UBI" and claim it will work wonders. Let's see: Turnson creates 120 new apples to cover the UBI on top of the 100 apples his orchard actually produces. The inflation is 2.4x so people who had 200 apples got another 3 apples, and ended up with the equivalent value of 84.5 apples. People who had 0 apples also got 3 and ended up with a grand equivalent buying power during commodity spikes of 1.25 apples. At Turnson's orchard with UBI, the poorest of the poor ended up with 1.25 apples, and everybody else's currency devalued substantially. At our orchard, with PGI, we were able to give apples to the poorest and neediest without destroying our currency's value or buying power. Inflation 9% during issuance of currency (See Kuwait in 2011 doing their UBI thing - tis one googles deep.) At Turnson's in this example, inflation is 2.4x during currency issuance and is supposed to even-out to some midpoint between 1.0 and 2.4x. 1.09 to 1.0 has the midline of 1.045 so there is more longterm inflation no matter what. How much depends on how important you think it is to devalue currency by giving some to everyone at the same time. (Additionally, without an incentive to work, stay employed, or provide value to society, why would people not just accept their cheques and bail? Nobody in blind support of UBI seems to think there are freeloaders or slackers in the world)
- mdorazio 7y ago
  Being condescending doesn't help you win arguments, it just makes you look like an asshole. Rather than actually answer my question with data or a study you instead decided to use a high-school level "thought experiment" to try and explain economics. Not cool. I understand economics quite well. I know how inflation works and how money supplies work. I didn't ask for explanations of those things. At this point, I seriously doubt you've even tried to see what the actual impacts of UBI would be before you decided it was a bad thing and decided to favor welfare. If you favor welfare because you think people should have to work, that's fine and it's an opinion I can respect. But please don't try and use garbage arguments to convince people your opinion is right. If you care to read some actual data, take a look at [1], in which a UBI equivalent in Mexico caused less than 1% inflation. As for your Kuwait example, I don't think you actually followed the long-term impact, in which inflation for non-food items was a non-issue after the initial spike [2] and continued to be a non-issue in the following year [3]. From the link: "With a great deal of public spending coming on-stream, and the effects of the substantial “Amiri” grant of KD1000 ($3605) awarded to every Kuwaiti, inflationary pressure is a concern. However, inflation dropped to an 11-month low of 4.6% in July, the last month for which figures were available, and the rate is expected to average 4.7% for full-year 2011, according to international press reports using figures from Kuwait’s Central Statistics Office. Food price inflation, at 9.7%, was worryingly high, but is likely to abate over the remainder of the year as international prices fall. Increases in housing costs – the biggest single component of Kuwait’s consumer price index (CPI) – are also cooling off, as much-needed new supply becomes available." [1] https://www.povertyactionlab.org/sites/default/files/publications/467_The-Price-Effect-of-Cash-versus-In-kind-Transfers_July%202017.pdf https://www.povertyactionlab.org/sites/default/files/publica... [2] https://oxfordbusinessgroup.com/news/kuwait-keeping https://oxfordbusinessgroup.com/news/kuwait-keeping [3] http://www.marcopolis.net/economy-of-kuwait-in-2012-growth-diversification-inflation-2806.htm http://www.marcopolis.net/economy-of-kuwait-in-2012-growth-d...