4 ms·

I think a big problem with current UBI proponents (and in general in the last ~2-3 years, Democrats) is that they don't understand how supply and demand work. W

I think a big problem with current UBI proponents (and in general in the last ~2-3 years, Democrats) is that they don't understand how supply and demand work. When you see Biden touting the Child Tax Credit as a response to decreased purchasing power from inflation you know something is wrong [1] (increased income at constant supply will only increase prices). Same thing with minimum wage increases - the real purchasing power of minimum wage workers stays the same no matter how much you raise it; you can see this effect played out over the last 5-8 years in the SFBA. I strongly believe if you institute a UBI it will have the same effect and just dilute everyone's purchasing power. UBI experiments that are localized to a few thousand people don't encounter this effect because they aren't big enough to impact the economy. I am all for UBI once we know that 1) it won't just get sucked up by landlords, since housing is highly inelastic and a de facto local government-granted cartel 2) people won't just fuck off and play video games/watch TV all day. [1]: https://www.bloomberg.com/news/articles/2021-07-25/white-house-shifts-messaging-on-inflation-as-republicans-attack?srnd=premium https://www.bloomberg.com/news/articles/2021-07-25/white-hou...

lumost 5y ago
Raising real income for workers by taxing capital holders and high income individuals does not necessarily cause inflation. One could argue that many ailments of the US economy are due to the skewed income distribution. UBI schemes are a blunt method of altering the distribution.
- b9a2cab5 5y ago
  Sure it does. By redistributing it from people that don't use it to people that do, you increase the velocity of money. Inflation is a function of velocity * supply, ergo redistribution causes inflation. But I'm not talking about that kind of generalized inflation, I'm talking about inflation specific to rent prices. If landlords hold an oligopoly, any increases in real purchasing power will be absorbed by rents. That is what has happened in the SFBA and what will happen if UBI gets implemented.

lumost 5y ago

Raising real income for workers by taxing capital holders and high income individuals does not necessarily cause inflation. One could argue that many ailments of the US economy are due to the skewed income distribution. UBI schemes are a blunt method of altering the distribution.

b9a2cab5 5y ago
Sure it does. By redistributing it from people that don't use it to people that do, you increase the velocity of money. Inflation is a function of velocity * supply, ergo redistribution causes inflation. But I'm not talking about that kind of generalized inflation, I'm talking about inflation specific to rent prices. If landlords hold an oligopoly, any increases in real purchasing power will be absorbed by rents. That is what has happened in the SFBA and what will happen if UBI gets implemented.