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It might not be that simple. Even if UBI is funded by taxes, UBI would be a wealth redistribution, increasing money on the lower end, generally pushing up deman
by trgn 5y ago
It might not be that simple. Even if UBI is funded by taxes, UBI would be a wealth redistribution, increasing money on the lower end, generally pushing up demand for goods and services that fulfill basic needs, and lowering the money on the top-end, which is spent differently, like on luxury goods, put on the sideline as savings, or spent chasing assets. This redistribution may cause inflation too, even though the overall money supply is not increased.
- SketchySeaBeast 5y agoIt's a bizarre thought that the only way for society not to spiral into inflation requires that the poor not be able to purchase the good and service that fulfill their basic needs. Not just be handed the money through UBI as that would cause inflation, but even gain it through jobs - either way it would increase those basic need demands.
- willnonya 5y agoThere are always two halves to this, the demand and the value of the money. Demand steadily increases over time, a UBI would cause a spike in that demand so there would be inflation at a higher rate while the market stabilizes. Without an increase in the rate the money is devalued this inflation should stabilize. The problems come when we devalue our money at the same time we're increasing demand causing changes at a rate faster than the markets can compensate. UBI is a shotgun approach and a political tactic rather than a real plan for helping those who need it. A negative income tax and other options that target this help where it's needed would be better options. either way though the trick is to get money where its needed without increasing debt or the money supply while doing so at a rate that doesn't shock the system.