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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

by 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...
- stazz1 7y ago
  Thought experiments are useful for people not versed in Economics -- Einstein's Relativity writings are pretty much just thought experiments. Kuwait dished out the grant for only a year, right? That's different than adding new money to the supply every year. Thanks for providing data, I'm always interested in taking a look. Everything I have read so far further supports my claims in my original post. For one, the example in Mexico only gives the fund to a small portion of the population, which is consistent with PGI, and inconsistent with UBI. "PGI is welfare" is an oversimplification in my opinion, that's like saying this beet and poppyseed salad is food, yes it's true, but the nuance and most of the useful information is lost. So again, the number of people being given the B.I. and the cyclicality of the grant have not been inspected thoroughly, but if problems emerge in isolation like the ones described, why would they not be exacerbated at scale. Most people think some sort of multiplier effect will cause advances across all disciplines, but putting fuel in every car whether empty or full is not the most efficient way to get the whole fleet going. Do I think people should be working rather than getting BI? Not exactly -- my personal view is that automation will likely wipeout many jobs and humans will have to be more and more creative for employment. Do I think rich people who have factories and make money off of robot labor should also get UBI? No. Giving to the haves creates all these inflationary, distributionary issues effectively shooting UBI in its foot. At one point it was unclear, now it is obvious. I think that's how science works. Kuwait is small and a 10% spike in food prices is probably a big deal, don't you agree? UBI for one year or a short term or a tiny population is not actual cyclically persistent-full population UBI. The leap between "I can whittle a chess piece out of wood" and "let's play all the grandmasters blindfolded" is quite a leap. How often is your mind changed by a study?

by stazz1 7y ago

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...

stazz1 7y ago
Thought experiments are useful for people not versed in Economics -- Einstein's Relativity writings are pretty much just thought experiments. Kuwait dished out the grant for only a year, right? That's different than adding new money to the supply every year. Thanks for providing data, I'm always interested in taking a look. Everything I have read so far further supports my claims in my original post. For one, the example in Mexico only gives the fund to a small portion of the population, which is consistent with PGI, and inconsistent with UBI. "PGI is welfare" is an oversimplification in my opinion, that's like saying this beet and poppyseed salad is food, yes it's true, but the nuance and most of the useful information is lost. So again, the number of people being given the B.I. and the cyclicality of the grant have not been inspected thoroughly, but if problems emerge in isolation like the ones described, why would they not be exacerbated at scale. Most people think some sort of multiplier effect will cause advances across all disciplines, but putting fuel in every car whether empty or full is not the most efficient way to get the whole fleet going. Do I think people should be working rather than getting BI? Not exactly -- my personal view is that automation will likely wipeout many jobs and humans will have to be more and more creative for employment. Do I think rich people who have factories and make money off of robot labor should also get UBI? No. Giving to the haves creates all these inflationary, distributionary issues effectively shooting UBI in its foot. At one point it was unclear, now it is obvious. I think that's how science works. Kuwait is small and a 10% spike in food prices is probably a big deal, don't you agree? UBI for one year or a short term or a tiny population is not actual cyclically persistent-full population UBI. The leap between "I can whittle a chess piece out of wood" and "let's play all the grandmasters blindfolded" is quite a leap. How often is your mind changed by a study?