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I would argue that inflation has revealed an already-present problem: many people are expected to live just above the poverty line. When inflation inevitably mo

I would argue that inflation has revealed an already-present problem: many people are expected to live just above the poverty line. When inflation inevitably moves that line, income must move with it proactively. We are watching that fail to happen, which I consider all the more reason to support UBI. Waiting for income to pick up the slack reactively leaves people behind the poverty line, and that's not OK.

lolinder 3y ago
I'm not saying we don't have a problem, but nothing you've said reassures me that UBI won't make everything worse. If you keep raising UBI to match inflation (which you'd have to do to fulfill the goal of eliminating poverty), how do you prevent that from turning into hyperinflation, where everyone's assets are completely devalued in a matter of decades? We need to do something to raise the poor into the middle class, but eliminating the middle class altogether in the process is neither politically viable nor (for me, subjectively) desirable.
- thomastjeffery 3y ago
  > how do you prevent that from turning into hyperinflation, where everyone's assets are completely devalued in a matter of decades? You are welcome to provide an answer. In the mean time, do we have to stop all progress in fear of that outcome? Just like you said, we need to do something. This is the best something I have heard of. You are welcome to present any potential alternatives. Here's what I envision happening: UBI causes inflation. UBI must increase to accommodate that inflation, because that is its original intended purpose anyway. If this was the whole story, then it would fail exactly as you predicted. Thankfully, it isn't, because there is one more variable in this equation: property value. When the rate of inflation increases, UBI must increase to accommodate two distinct assets: goods and housing. Goods are already at pretty tight margins, so their cost will stay roughly the same relative to inflation and wages. Housing, on the other hand, is incredibly over-valued. The cost of rent has skyrocketed, with no end in sight. By increasing both UBI and inflation, the relative value of housing should decrease. Cheaper housing means cheaper rent, which means less need to grow UBI. Eventually, this system finds an equilibrium. The problem we are seeing already is that despite ever-accelerating inflation, the rise in property value is also accelerating. This is because the wages of middle-class workers (everyone above the poverty line) has increased fast enough to accommodate it. That sounds like a good thing, until you think about the growing collection of people who are left behind the poverty line. By redistributing the general increase of wages into UBI, middle-class workers would get relatively less income. That means that middle-class workers would not be able to afford the ever-increasing cost of rent. That sounds like a bad thing until you see the solution it provides: the market for ever-increasing rent would evaporate. Property values would finally find a ceiling, and rent would stop consuming such an outsized percentage of general income. If you can find another way to slow the growth of property values, I'm all ears. If not, then let's give UBI a shot.
  - lolinder 3y ago
    All this explanation does is reinforce my fear that UBI is about wealth redistribution from the middle class to the poor, rather than from the rich to the poor. Under the best case scenario that you describe, the rich would be largely unaffected, while the middle class would merge in with the lower classes to form a new lower class (though one that's at least over the poverty line). This makes it politically a complete non-starter, but it also feels wrong to me. If we're going to redistribute wealth, let it be from the top down, not shared between the bottom 80%. Doing something, anything is not guaranteed to make things better than leaving the current system intact. If UBI makes wealth and power even more centralized in the few at the top of the food chain, with the rest of us comfortably above the poverty line but more dependent (on average) on the government and on the 1%, that is not necessarily a good outcome.
    - thomastjeffery 3y ago
      The best case I described would move wealth from landlords, through the middle class, to the poor and middle class. It would accomplish that by both expanding and devaluing the middle class. Expanding the middle class would eliminate poverty (no more poor category). Devaluing the middle class would shrink the housing market (not enough high-paying renters to sustain runaway rent growth). Shrinking the housing market would move wealth from property owners back to middle-class income, which is exactly where it came from in the first place. The primary method that the poor and middle class are exploited by the rich is housing. The benefit of middle class life is captured by rent and mortgages; then moved into the portfolio of wealthy real estate owners. If we can put that in reverse, we all win. Ideally, UBI would move wealth back from real estate portfolios back into wages and disposable income. The middle class would be less wealthy on paper, but have more disposable income from not spending it on housing. It's not as elegant as directly stealing from the rich and giving to the poor, but that doesn't seem possible anyway.
  - derivagral 3y ago
    > the relative value of housing should decrease Can you go into this? Sort of sounds like more money chasing a static supply, which is a situation where I wouldn't expect a decrease.

lolinder 3y ago

I'm not saying we don't have a problem, but nothing you've said reassures me that UBI won't make everything worse. If you keep raising UBI to match inflation (which you'd have to do to fulfill the goal of eliminating poverty), how do you prevent that from turning into hyperinflation, where everyone's assets are completely devalued in a matter of decades? We need to do something to raise the poor into the middle class, but eliminating the middle class altogether in the process is neither politically viable nor (for me, subjectively) desirable.

thomastjeffery 3y ago
> how do you prevent that from turning into hyperinflation, where everyone's assets are completely devalued in a matter of decades? You are welcome to provide an answer. In the mean time, do we have to stop all progress in fear of that outcome? Just like you said, we need to do something. This is the best something I have heard of. You are welcome to present any potential alternatives. Here's what I envision happening: UBI causes inflation. UBI must increase to accommodate that inflation, because that is its original intended purpose anyway. If this was the whole story, then it would fail exactly as you predicted. Thankfully, it isn't, because there is one more variable in this equation: property value. When the rate of inflation increases, UBI must increase to accommodate two distinct assets: goods and housing. Goods are already at pretty tight margins, so their cost will stay roughly the same relative to inflation and wages. Housing, on the other hand, is incredibly over-valued. The cost of rent has skyrocketed, with no end in sight. By increasing both UBI and inflation, the relative value of housing should decrease. Cheaper housing means cheaper rent, which means less need to grow UBI. Eventually, this system finds an equilibrium. The problem we are seeing already is that despite ever-accelerating inflation, the rise in property value is also accelerating. This is because the wages of middle-class workers (everyone above the poverty line) has increased fast enough to accommodate it. That sounds like a good thing, until you think about the growing collection of people who are left behind the poverty line. By redistributing the general increase of wages into UBI, middle-class workers would get relatively less income. That means that middle-class workers would not be able to afford the ever-increasing cost of rent. That sounds like a bad thing until you see the solution it provides: the market for ever-increasing rent would evaporate. Property values would finally find a ceiling, and rent would stop consuming such an outsized percentage of general income. If you can find another way to slow the growth of property values, I'm all ears. If not, then let's give UBI a shot.
- lolinder 3y ago
  All this explanation does is reinforce my fear that UBI is about wealth redistribution from the middle class to the poor, rather than from the rich to the poor. Under the best case scenario that you describe, the rich would be largely unaffected, while the middle class would merge in with the lower classes to form a new lower class (though one that's at least over the poverty line). This makes it politically a complete non-starter, but it also feels wrong to me. If we're going to redistribute wealth, let it be from the top down, not shared between the bottom 80%. Doing something, anything is not guaranteed to make things better than leaving the current system intact. If UBI makes wealth and power even more centralized in the few at the top of the food chain, with the rest of us comfortably above the poverty line but more dependent (on average) on the government and on the 1%, that is not necessarily a good outcome.
  - thomastjeffery 3y ago
    The best case I described would move wealth from landlords, through the middle class, to the poor and middle class. It would accomplish that by both expanding and devaluing the middle class. Expanding the middle class would eliminate poverty (no more poor category). Devaluing the middle class would shrink the housing market (not enough high-paying renters to sustain runaway rent growth). Shrinking the housing market would move wealth from property owners back to middle-class income, which is exactly where it came from in the first place. The primary method that the poor and middle class are exploited by the rich is housing. The benefit of middle class life is captured by rent and mortgages; then moved into the portfolio of wealthy real estate owners. If we can put that in reverse, we all win. Ideally, UBI would move wealth back from real estate portfolios back into wages and disposable income. The middle class would be less wealthy on paper, but have more disposable income from not spending it on housing. It's not as elegant as directly stealing from the rich and giving to the poor, but that doesn't seem possible anyway.
- derivagral 3y ago
  > the relative value of housing should decrease Can you go into this? Sort of sounds like more money chasing a static supply, which is a situation where I wouldn't expect a decrease.