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> The money has to come out of the system somewhere. Governments have the ability to print money out of thin air. What I'd like to see is how UBI impacts infl
by TriangleEdge 3y ago
> The money has to come out of the system somewhere.
Governments have the ability to print money out of thin air.
What I'd like to see is how UBI impacts inflation and economic growth.
- hosteur 3y agoCurrency yes. But not value.
- psunavy03 3y agoGoogle "hyperinflation." Printing money out of thin air causes the existing money to be worth about as much as toilet paper.
- mitthrowaway2 3y agoDepends on how much you print, and what happens with supply as you do so. Some countries (eg. Japan) are struggling to increase inflation, so this seems like a straightforward policy. At the same time it can solve the problem of weak consumer demand: productive factories making desirable goods that citizens nonetheless feel too poor to buy, causing those factories to shut down, resulting in the country getting poorer in real terms. After all, "demand" is desirability times spending power: if spending power is low in your target market, then demand is low, even when your products are desirable. Putting money in the hands of the largest number of people works well with production economies of scale. For the same total quantity of money, having it concentrated in a few hands means your society is incentivized to produce a few yachts and private jets, and too low on the quantity curve for economies of scale to make that production efficient. When that same money is distributed, the incentives are to produce large quantities of vacuum cleaners and washing machines, where mass production is very efficient, so total utility can be higher.
- kelseyfrog 3y agoPrinting money is not a useful framing device. What is useful is thinking about money sources and money sinks. As long as the (source rate - sink rate) ≅ Δvalue of goods an services, inflation is checked. "Printing money", paired with a comparable sink, is completely fine and a more useful tool than "never print money". The biggest roadblock we have when it comes to employing this tool is that our system of governance has different systems when it comes to monetary and fiscal policy that over-complicate its use.
- jstummbillig 3y agoWe are actually, right now, "printing money" out of thin air. The process is called "fractional reserve banking" and is a cornerstone of modern economics systems. You can of course read up on it, but, suffice to say, if we did not do it, financial systems would be extremely unergonomic. Hyperinflation is one of the things that could happen, when you do it badly, I suppose, but there is a lot of ways to get hyperinflation, if you do things badly.
- psunavy03 3y agoThank you for insulting my intelligence by assuming I don't understand fractional reserve banking. My point remains. A government does not have carte blanche to inject money into an economy without hyperinflation beyond a certain point.
- jstummbillig 3y agoIf you were a little more honest and a little less into making a point of being offended, you would probably find it fairly easy to concede that the statements you made in both comments are substantially different.
- danpalmer 3y agoBoth statements are true. Governments can "print money", but printing money comes with many caveats.
- stray 3y agoWhat could possibly go wrong?
- SoftTalker 3y agoPrinting money out of thin air makes existing money worth less. So it is effectively a tax by another name, you are taking the value from the people who have money now, without actually changing the balances in their bank accounts. And it's regressive, since there's no way to limit inflation to any selected demographic.
- netbioserror 3y agoRight. And if they can print it from thin air and just give it to everyone, then it has no actual value. Price discovery will force significant inflation on every class of product and service because that is what people will be buying with it. Its effectiveness drops with scale, which is what they are not testing. It's great that UBI works in a lab, but this experiment has been run at multiple points in history and absolutely thrashed societies every time without significant external input (conquest, exploitation, etc.). Money by definition derives its value from its scarcity relative to the economy it is representing. There is no free lunch here.
- jvanderbot 3y agoYeah, as much as I hate the inefficiency of some wellfare programs in the USA - their inefficiency is a feature in that it provides a kind of scarcity.
- deleted 3y ago[deleted]
- lenkite 3y agoThe folks down-voting you down appear to have no problems with hundreds of billions of dollars spent on War every year - the money for that was printed out of thin air. The current U.S. Biden administration even removed the debt ceiling to do this!
- vharuck 3y agoThe US has raised the debt ceiling multiple times across multiple administrations. And the debt ceiling isn't raised so that we can pass a specific bill or take a specific action, it's so we can pay for the bills and actions we agreed to months beforehand.