3 ms·

This answer fundamentally doesn't work; let me see if I can concisely explain why. When someone spends money to buy a good or service, the money recirculates b

by makomk 6y ago

This answer fundamentally doesn't work; let me see if I can concisely explain why. When someone spends money to buy a good or service, the money recirculates but the actual thing they've bought is consumed. If you pump up the supply of money by taking the same amount of money and recirculating it through the economy more, but without increasing the supply of goods and services, this means that the price of those things has to increase correspondingly just like if you outright printed a load of money and handed it out to everyone. Economically speaking, these two methods of increasing the money supply have very similar effects. (In practice, strong UBI is probably even worse than this if the idea is to make it feasible for people to not work, since the supply of goods and services will actually shrink and employers' labour costs will increase.)

neilwilson 6y ago
That again is fundamentally wrong. As I said go read the book and learn something. Pro-tip. You completely forgot about consumption and income taxes. And that there is unemployed labour capacity available - anywhere across the world. There isn't a finite amount of stuff, there is always capacity to expand in a business, but it may take a while, and hardly anything is subject to price auctions (see PPE for details). What happens when we hit capacity is that there is forced savings. You end up with spending capacity but nothing to buy or nothing you want to buy. In the vernacular your spending becomes ineffective. Excess savings have the same economic effect as taxation. It's the excess savings that income schemes are trying to offset. But that just moves the problem from the financial sphere into the real sphere - why should I grow you any carrots if you're not contributing your effort to the common good?

3 ms·

This answer fundamentally doesn't work; let me see if I can concisely explain why. When someone spends money to buy a good or service, the money recirculates b

by makomk 6y ago

neilwilson 6y ago
That again is fundamentally wrong. As I said go read the book and learn something. Pro-tip. You completely forgot about consumption and income taxes. And that there is unemployed labour capacity available - anywhere across the world. There isn't a finite amount of stuff, there is always capacity to expand in a business, but it may take a while, and hardly anything is subject to price auctions (see PPE for details). What happens when we hit capacity is that there is forced savings. You end up with spending capacity but nothing to buy or nothing you want to buy. In the vernacular your spending becomes ineffective. Excess savings have the same economic effect as taxation. It's the excess savings that income schemes are trying to offset. But that just moves the problem from the financial sphere into the real sphere - why should I grow you any carrots if you're not contributing your effort to the common good?