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I agree, and when governments are worried about deflation, UBI / helicopter money, which goes to people who need it and will rapidly spend it, seems much better
by jbay808 5y ago
I agree, and when governments are worried about deflation, UBI / helicopter money, which goes to people who need it and will rapidly spend it, seems much better than lowering interest rates, which mainly inflates asset prices and benefits the top 1%. I'm not sure why it's not more commonly employed.
Of course, we're in an inflation scenario right now, but part of the reason for that appears to be that central banks are so terrified of deflation that they're way more comfortable erring in the other direction.
- corpMaverick 5y agoMy only worry is that a lot of that money goes to housing. Rents go up immediately and also house prices. So we need policies to increase housing supply/density in most cities to counter this effect.
- jbay808 5y agoI think the trick would be to increase interest rates (deflationary, mostly for assets) and implement UBI simultaneously (inflationary, mostly for consumables). The increasing cost of debt will sink asset prices, houses most of all, while the UBI cancels out the systemic deflationary forces that result from that. I think the net effect of this would drive investment into more productive and less rent-seeking areas, incentivize a lot more innovation, and also significantly reduce the wealth gap. But that's just me.