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>inflation costs the rich more than the poor, since the rich are more likely to have savings The truly wealthy have a lower proportion of their savings in cash

>inflation costs the rich more than the poor, since the rich are more likely to have savings The truly wealthy have a lower proportion of their savings in cash. They preserve their wealth in assets like stock or property which pays dividends and increases in value along with price inflation. >Cheap food is a competitive, low-margin business, so it's unlikely that the cost would increase The Federal Reserve cannot print more supply for consumers. When they increase the supply of money to chase the same supply of assets, the outcome is price inflation. Food and rent is a disproportionately larger expense for low income individuals. >The mechanisms that limit them (credit ratings etc.) These mechanisms are not limiting them from monetizing debts. Additionally, credit ratings organizations are subject to retaliation by sufficiently powerful governments. https://en.wikipedia.org/wiki/United_States_federal_government_credit-rating_downgrades#Potential_consequences_to_credit_rating_agencies https://en.wikipedia.org/wiki/United_States_federal_governme... >but wealth redistribution must ultimately work; why would the rich be so afraid of it otherwise? I'm not sure it is fair to assume that 'the rich' want 'the poor' to be worse off. Producers create products which consumers want to consume, because they perceive it to benefit themselves. Finally, I'm not sure that the truly rich elites are opposed to UBI. Bloomberg has published the article and continues to push this narrative. If anything greater centralization favors elites. When asset prices increase those who have their savings in assets benefit the most. Again, the elites are not keeping their savings in cash.

lmm 6y ago
> The truly wealthy have a lower proportion of their savings in cash. They preserve their wealth in assets like stock or property which pays dividends and increases in value along with price inflation. I don't think that's really true. The middle class often have a negative proportion of their savings in dollar-denominated assets (their mortgage), and the poor usually have no relevant savings at all (compared to their expected future income). > The Federal Reserve cannot print more supply for consumers. When they increase the supply of money to chase the same supply of assets, the outcome is price inflation. Food and rent is a disproportionately larger expense for low income individuals. The food supply is far from fixed (and the government does have a number of levers with which to affect it). Food and rent are a disproportionately large expense for the poor because they are poor; if we redistribute wealth towards the poor we should expect it to become a proportionately smaller expense for them. Demand for food will only actually increase if people are currently not getting as much food as they want, and in that case we should want prices to increase so that more food supply comes online. > These mechanisms are not limiting them from monetizing debts. Additionally, credit ratings organizations are subject to retaliation by sufficiently powerful governments. Be that as it may, all of that is happening anyway. UBI doesn't change the deficit because the deficit will always be as high as politically possible.
- aww_dang 6y ago
  RE: Food prices This assumes that the prices for all of the inputs for food production remain static in the face of either increasing taxes or as we both seem to agree upon, an increased monetary base. Land and energy will go up in price as more money is available to chase the same scarce resources. Similarly taxes would increase production costs. >UBI doesn't change the deficit because the deficit will always be as high as politically possible. More spending won't increase deficits because they're going to spend anyways? I'm not sure I follow your logic here. It is true that price inflation helps debtors. Those who have homes have their debts minimized while their asset increases in price. Lately it seems that we have been incentivizing this behavior, rewarding those who borrow and punishing those who save in cash. I'm not sure how this helps low income individuals. Especially those who are trying to build savings for their first home. >Food and rent are a disproportionately large expense for the poor because they are poor; if we redistribute wealth towards the poor we should expect it to become a proportionately smaller expense for them And they will still be poor relative to everyone else. What is needed is not a money printer to merely print more paper and distribute it into the economy, but a similarly effortless method to print supply into the economy like a Star-Trek replicator. https://en.wikipedia.org/wiki/Replicator_(Star_Trek) https://en.wikipedia.org/wiki/Replicator_(Star_Trek) Worse yet, in the case of COVID-19 production has actually decreased.
  - lmm 6y ago
    > This assumes that the prices for all of the inputs for food production remain static in the face of either increasing taxes or as we both seem to agree upon, an increased monetary base. Land and energy will go up in price as more money is available to chase the same scarce resources. You're conflating different kinds of thing here. I don't believe there would be any increased monetary base, because I expect UBI would be implemented in a budget-neutral way (covered by tax). But if you do think there would be monetary inflation, just ignore the cash numbers and denominate everything in 2020 (fixed-value) dollars. There are no more fixed-value dollars chasing resources (just the same number of fixed-value dollars distributed differently), so there's no increased demand at first order. At second order maybe those same fixed-value dollars circulate more quickly, so there's more demand and more consumption, a more active economy generally and higher GDP (in fixed-value dollars). That would generally be seen as a good thing. > More spending won't increase deficits because they're going to spend anyways? I'm not sure I follow your logic here. The political reality of passing UBI would be finding some way to balance (or retain the same unbalance in) the budget, either by cutting other expenditures or raising additional revenue. > And they will still be poor relative to everyone else. They will be less poor relatively, that's the whole point. If A has 100 dollars and B has 10 dollars, and you give 10 dollars to B, it's almost irrelevant whether those are dollars you taxed from A or printed afresh; either way you leave B proportionately much better off.

lmm 6y ago

> The truly wealthy have a lower proportion of their savings in cash. They preserve their wealth in assets like stock or property which pays dividends and increases in value along with price inflation. I don't think that's really true. The middle class often have a negative proportion of their savings in dollar-denominated assets (their mortgage), and the poor usually have no relevant savings at all (compared to their expected future income). > The Federal Reserve cannot print more supply for consumers. When they increase the supply of money to chase the same supply of assets, the outcome is price inflation. Food and rent is a disproportionately larger expense for low income individuals. The food supply is far from fixed (and the government does have a number of levers with which to affect it). Food and rent are a disproportionately large expense for the poor because they are poor; if we redistribute wealth towards the poor we should expect it to become a proportionately smaller expense for them. Demand for food will only actually increase if people are currently not getting as much food as they want, and in that case we should want prices to increase so that more food supply comes online. > These mechanisms are not limiting them from monetizing debts. Additionally, credit ratings organizations are subject to retaliation by sufficiently powerful governments. Be that as it may, all of that is happening anyway. UBI doesn't change the deficit because the deficit will always be as high as politically possible.

aww_dang 6y ago
RE: Food prices This assumes that the prices for all of the inputs for food production remain static in the face of either increasing taxes or as we both seem to agree upon, an increased monetary base. Land and energy will go up in price as more money is available to chase the same scarce resources. Similarly taxes would increase production costs. >UBI doesn't change the deficit because the deficit will always be as high as politically possible. More spending won't increase deficits because they're going to spend anyways? I'm not sure I follow your logic here. It is true that price inflation helps debtors. Those who have homes have their debts minimized while their asset increases in price. Lately it seems that we have been incentivizing this behavior, rewarding those who borrow and punishing those who save in cash. I'm not sure how this helps low income individuals. Especially those who are trying to build savings for their first home. >Food and rent are a disproportionately large expense for the poor because they are poor; if we redistribute wealth towards the poor we should expect it to become a proportionately smaller expense for them And they will still be poor relative to everyone else. What is needed is not a money printer to merely print more paper and distribute it into the economy, but a similarly effortless method to print supply into the economy like a Star-Trek replicator. https://en.wikipedia.org/wiki/Replicator_(Star_Trek) https://en.wikipedia.org/wiki/Replicator_(Star_Trek) Worse yet, in the case of COVID-19 production has actually decreased.
- lmm 6y ago
  > This assumes that the prices for all of the inputs for food production remain static in the face of either increasing taxes or as we both seem to agree upon, an increased monetary base. Land and energy will go up in price as more money is available to chase the same scarce resources. You're conflating different kinds of thing here. I don't believe there would be any increased monetary base, because I expect UBI would be implemented in a budget-neutral way (covered by tax). But if you do think there would be monetary inflation, just ignore the cash numbers and denominate everything in 2020 (fixed-value) dollars. There are no more fixed-value dollars chasing resources (just the same number of fixed-value dollars distributed differently), so there's no increased demand at first order. At second order maybe those same fixed-value dollars circulate more quickly, so there's more demand and more consumption, a more active economy generally and higher GDP (in fixed-value dollars). That would generally be seen as a good thing. > More spending won't increase deficits because they're going to spend anyways? I'm not sure I follow your logic here. The political reality of passing UBI would be finding some way to balance (or retain the same unbalance in) the budget, either by cutting other expenditures or raising additional revenue. > And they will still be poor relative to everyone else. They will be less poor relatively, that's the whole point. If A has 100 dollars and B has 10 dollars, and you give 10 dollars to B, it's almost irrelevant whether those are dollars you taxed from A or printed afresh; either way you leave B proportionately much better off.