4 ms·

Inflation. https://en.wikipedia.org/wiki/Inflation https://en.wikipedia.org/wiki/Inflation

thebean11 6y ago
And time and time again, things that by conventional wisdom would increase inflation somehow don't. Macroeconomics isn't that simple, and posting a wikipedia article isn't an argument.
- phone8675309 6y ago
  You'd think that employers would be all over UBI then because it means that they can instantly cut the wages of their workers by the amount of the UBI and that more people will have money to purchase their goods and services.
  - tspike 6y ago
    Companies that depend on underpaid workers will fight this tooth and nail.
    - phone8675309 6y ago
      Why? It means that they can pay less than they do now and still retain workers. How is it not a positive benefit for them? It potentially means that people working for them actually want to work and aren’t doing it just to survive.
      - tspike 6y ago
        Because the jobs they're offering are shitty, demeaning and menial, and most people who take them are doing so because they need to survive. Absent the survival need, the companies will have to dramatically improve working conditions to maintain the sheer quantity of labor they require.
        phone8675309 6y ago
        Perhaps, but the reduced wages (since total income is now UBI + wage instead of 0 + wages) sounds like it will more than make up for whatever increased costs they may have to make the working environment less shitty.
skrtskrt 6y ago
Dirt poor people being slightly less dirt poor and not having to worry about where their next meal is going to come from will not inflate basic goods that much. We've seen this with higher minimum wages. The amount of inflation is much lower than than the wage increase, and poor people end up with more buying power.
- austincheney 6y ago
  A serious distinction is that increased minimum wages incur a burden on employers which they pass around to their customers and business partners. The increase of burden is directly proportional to the amount of work of an hourly employee. UBI does not come from an employer and is not tied to an effort. There is no direct market burden, but yet an increase of cash is available none the less. It should also be noted that inflation is not immediately present following a cash stimulus. It takes time for inflation to set in as a response to market conditions and as such inflation is measured as an adjustable change over a given period of time. That said specific single time examples of UBI not adjusting inflation only demonstrates a faulty understanding of economics. https://en.wikipedia.org/wiki/Inflation#Issues_in_measuring https://en.wikipedia.org/wiki/Inflation#Issues_in_measuring
  - mamon 6y ago
    >> UBI does not come from an employer and is not tied to an effort Where do you think government's money come from? Financing UBI will require raising taxes.
    - austincheney 6y ago
      For my thoughts on taxes please see my comment further down: https://news.ycombinator.com/item?id=24005134 https://news.ycombinator.com/item?id=24005134
    - fragmede 6y ago
      Money at the government level is not a zero-sum game, so thinking it's as simple as raising taxes is an oversimplification, and while unchecked printing of money is problematic leading to inflation, how the monetary base grows would need to be part of a well-considered implementation plan.
ryanwaggoner 6y ago
Just saying “inflation” is both condescending and lazy. Billions of people have been lifted out of abject poverty over the past few decades while also dealing with inflation. We know it’s a concept and it has relevance to the discussion, so merely saying the word brings literally nothing to the table.
- austincheney 6y ago
  Discarding the term merely for its presense is by argument equally lazy. I didn't provide only a word, but also provided qualifying source material. What the other replies have failed to consider is that UBI is just injection of cash. It isn't a voucher for a specific class of goods, such as rent. It is just cash that can be used for absolutely anything. If that means burning cash on a $5000 handbag then so be it. Inflation is literaly the injection of cash into a market. The problem with inflation is lost value. Cash is an abstraction of value to conduct an exchange. The real world worth of that abstraction is variable. When the availability of that abstraction increases disproportionately to a real world value it will be able to purchase less. The most common reason is that prices increase to follow the increased availibility of cash, but there are other reasons as well. When everybody equally has uniformly increased purchasing power the natural counter-reaction is to reduce availability of goods and services. That can mean raising prices. It can also mean removing goods from market to make them more exclusive. Any means of restoring value to the prior state will happen to lower disruption to the transfer of goods. Had you read the wikipedia article it would have addressed everything I just said.
  - ryanwaggoner 6y ago
    Come on, man. Linking to Wikipedia and expecting people to read a 12,000 word article to magically construct the ~200 word argument you've laid out here is almost a textbook definition of laziness. I stand by what I said.
  - ntSean 6y ago
    If you had a more well versed economics background, you might be more privy to how narrow of a view you have regarding inflation. Australia currently has a program where anyone impacted from the effects of the pandemic, receives $1,500 a fortnight- and yet is experiencing deflation. The very fact of this debunks your argument, as it is a significant portion of the population who is now receiving a cash injection. This money is not exclusively for rent, nor is it tied to food stamps; it is $1,500 to spend as you wish. Further, The Reserve Bank Of Australia is in favour of these payments. And it's also worth noting, many economies have an inflation target of about 3%, which indicates that inflation is healthy and to so staunchly avoid anything that may affect inflation is a fools errand. Regardless, please read more than a wikipedia article before holding such a strong opinion. The other commenter called you out for being lazy, and I wholeheartedly agree with them.
alistairSH 6y ago
Sure, if UBI is implemented without a matching increase in government revenue, or reallocation of existing government revenue. Every serious proposal for UBI does one, the other, or both of those. There is plenty of literature that contradicts your assertion. Here are a few links... https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7 https://medium.com/basic-income/wouldnt-unconditional-basic-... https://www.peoplespolicyproject.org/2020/03/18/understanding-claims-about-basic-income-and-inflation/ https://www.peoplespolicyproject.org/2020/03/18/understandin... https://ubi.earth/basic-income-doesnt-cause-inflation https://ubi.earth/basic-income-doesnt-cause-inflation

And time and time again, things that by conventional wisdom would increase inflation somehow don't. Macroeconomics isn't that simple, and posting a wikipedia article isn't an argument.

phone8675309 6y ago
You'd think that employers would be all over UBI then because it means that they can instantly cut the wages of their workers by the amount of the UBI and that more people will have money to purchase their goods and services.
- tspike 6y ago
  Companies that depend on underpaid workers will fight this tooth and nail.
  - phone8675309 6y ago
    Why? It means that they can pay less than they do now and still retain workers. How is it not a positive benefit for them? It potentially means that people working for them actually want to work and aren’t doing it just to survive.
    - tspike 6y ago
      Because the jobs they're offering are shitty, demeaning and menial, and most people who take them are doing so because they need to survive. Absent the survival need, the companies will have to dramatically improve working conditions to maintain the sheer quantity of labor they require.
      - phone8675309 6y ago
        Perhaps, but the reduced wages (since total income is now UBI + wage instead of 0 + wages) sounds like it will more than make up for whatever increased costs they may have to make the working environment less shitty.

skrtskrt 6y ago

Dirt poor people being slightly less dirt poor and not having to worry about where their next meal is going to come from will not inflate basic goods that much. We've seen this with higher minimum wages. The amount of inflation is much lower than than the wage increase, and poor people end up with more buying power.

austincheney 6y ago
A serious distinction is that increased minimum wages incur a burden on employers which they pass around to their customers and business partners. The increase of burden is directly proportional to the amount of work of an hourly employee. UBI does not come from an employer and is not tied to an effort. There is no direct market burden, but yet an increase of cash is available none the less. It should also be noted that inflation is not immediately present following a cash stimulus. It takes time for inflation to set in as a response to market conditions and as such inflation is measured as an adjustable change over a given period of time. That said specific single time examples of UBI not adjusting inflation only demonstrates a faulty understanding of economics. https://en.wikipedia.org/wiki/Inflation#Issues_in_measuring https://en.wikipedia.org/wiki/Inflation#Issues_in_measuring
- mamon 6y ago
  >> UBI does not come from an employer and is not tied to an effort Where do you think government's money come from? Financing UBI will require raising taxes.
  - austincheney 6y ago
    For my thoughts on taxes please see my comment further down: https://news.ycombinator.com/item?id=24005134 https://news.ycombinator.com/item?id=24005134
  - fragmede 6y ago
    Money at the government level is not a zero-sum game, so thinking it's as simple as raising taxes is an oversimplification, and while unchecked printing of money is problematic leading to inflation, how the monetary base grows would need to be part of a well-considered implementation plan.

ryanwaggoner 6y ago

Just saying “inflation” is both condescending and lazy. Billions of people have been lifted out of abject poverty over the past few decades while also dealing with inflation. We know it’s a concept and it has relevance to the discussion, so merely saying the word brings literally nothing to the table.

austincheney 6y ago
Discarding the term merely for its presense is by argument equally lazy. I didn't provide only a word, but also provided qualifying source material. What the other replies have failed to consider is that UBI is just injection of cash. It isn't a voucher for a specific class of goods, such as rent. It is just cash that can be used for absolutely anything. If that means burning cash on a $5000 handbag then so be it. Inflation is literaly the injection of cash into a market. The problem with inflation is lost value. Cash is an abstraction of value to conduct an exchange. The real world worth of that abstraction is variable. When the availability of that abstraction increases disproportionately to a real world value it will be able to purchase less. The most common reason is that prices increase to follow the increased availibility of cash, but there are other reasons as well. When everybody equally has uniformly increased purchasing power the natural counter-reaction is to reduce availability of goods and services. That can mean raising prices. It can also mean removing goods from market to make them more exclusive. Any means of restoring value to the prior state will happen to lower disruption to the transfer of goods. Had you read the wikipedia article it would have addressed everything I just said.
- ryanwaggoner 6y ago
  Come on, man. Linking to Wikipedia and expecting people to read a 12,000 word article to magically construct the ~200 word argument you've laid out here is almost a textbook definition of laziness. I stand by what I said.
- ntSean 6y ago
  If you had a more well versed economics background, you might be more privy to how narrow of a view you have regarding inflation. Australia currently has a program where anyone impacted from the effects of the pandemic, receives $1,500 a fortnight- and yet is experiencing deflation. The very fact of this debunks your argument, as it is a significant portion of the population who is now receiving a cash injection. This money is not exclusively for rent, nor is it tied to food stamps; it is $1,500 to spend as you wish. Further, The Reserve Bank Of Australia is in favour of these payments. And it's also worth noting, many economies have an inflation target of about 3%, which indicates that inflation is healthy and to so staunchly avoid anything that may affect inflation is a fools errand. Regardless, please read more than a wikipedia article before holding such a strong opinion. The other commenter called you out for being lazy, and I wholeheartedly agree with them.

alistairSH 6y ago

Sure, if UBI is implemented without a matching increase in government revenue, or reallocation of existing government revenue. Every serious proposal for UBI does one, the other, or both of those. There is plenty of literature that contradicts your assertion. Here are a few links... https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7 https://medium.com/basic-income/wouldnt-unconditional-basic-... https://www.peoplespolicyproject.org/2020/03/18/understanding-claims-about-basic-income-and-inflation/ https://www.peoplespolicyproject.org/2020/03/18/understandin... https://ubi.earth/basic-income-doesnt-cause-inflation https://ubi.earth/basic-income-doesnt-cause-inflation