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This is what most people miss when they criticise UBI - for most people, it will be immediately spent, taxed, and put back into the economy. As long as the velo

This is what most people miss when they criticise UBI - for most people, it will be immediately spent, taxed, and put back into the economy. As long as the velocity is there, it's not an entirely bad idea as long as inflation can be kept under control.

eru 1y ago
If you have an inflation targeting central bank, velocity of money doesn't really matter. If velocity speeds up and inflation goes up, the central bank will remove money from circulation to hit their target. If velocity goes down, the central bank will inject money into circulation. The fiscal multiplier is zero. (Or rather, any deviation of the fiscal multiplier from zero is evidence of an incompetent central bank.)
hn_throw2025 1y ago
> as long as inflation can be kept under control. Nice trick if you can pull it off. So for the 1GBP you print, you recoup up to 20p in VAT, or less for foodstuffs. And more money chasing the same goods and services means…?
- eru 1y ago
  Are you suggesting that UBI should be paid out of freshly printed money? I don't think that's how people commonly understand how UBI should be financed.
  - hn_throw2025 1y ago
    I can only speak for the UK. But given the fiscal headroom for the foreseeable, I don’t see where else it would come from? If they don’t have it, they either borrow or print it? For any meaningful scheme, you would be talking about hundreds of billions.
    - surgical_fire 1y ago
      That's were things such as wealth tax kicks in. The money that just sits untaxed on the vaults of the extremely wealthy should be taxed to finance this. This is trickle down economics done right. Remove money from the wealthy and redistribute it to benefit society.
      - hn_throw2025 1y ago
        I would imagine the extremely wealthy have passports, global homes, and the vaults you mention might well be in Switzerland. The extremely wealthy will also have an army of lawyers and accountants to mitigate against this, not to mention trusts and holding companies. It’s a nice idea, but the implementation is tricky. I’m not arguing for them, just being realistic.
        surgical_fire 1y ago
        What they actually have is an inordinate power to lobby governments. No army of lawyers would save them from actually effective regulation.
        eru 1y ago
        Voting with your feet will save you from that. Of course, if you want to do business in country X, you are subject to the laws of that country X. But otherwise, you can leave that country and settle down elsewhere and do your business there. No matter how 'actually effective' that regulation is. (Unless you do an 'East Germany' and don't allow people to leave.)
        surgical_fire 1y ago
        > Voting with your feet will save you from that. When relevant countries act in tandem, it would work. I would really like to see a billionaire vote with their feet to protect their wealth by moving ro Somalia or something like that. A country can also limit their ability to operate from abroad when they move. In real life, value producing is inherently tied to the society which allows value to be produced.

eru 1y ago

If you have an inflation targeting central bank, velocity of money doesn't really matter. If velocity speeds up and inflation goes up, the central bank will remove money from circulation to hit their target. If velocity goes down, the central bank will inject money into circulation. The fiscal multiplier is zero. (Or rather, any deviation of the fiscal multiplier from zero is evidence of an incompetent central bank.)

hn_throw2025 1y ago

> as long as inflation can be kept under control. Nice trick if you can pull it off. So for the 1GBP you print, you recoup up to 20p in VAT, or less for foodstuffs. And more money chasing the same goods and services means…?

eru 1y ago
Are you suggesting that UBI should be paid out of freshly printed money? I don't think that's how people commonly understand how UBI should be financed.
- hn_throw2025 1y ago
  I can only speak for the UK. But given the fiscal headroom for the foreseeable, I don’t see where else it would come from? If they don’t have it, they either borrow or print it? For any meaningful scheme, you would be talking about hundreds of billions.
  - surgical_fire 1y ago
    That's were things such as wealth tax kicks in. The money that just sits untaxed on the vaults of the extremely wealthy should be taxed to finance this. This is trickle down economics done right. Remove money from the wealthy and redistribute it to benefit society.
    - hn_throw2025 1y ago
      I would imagine the extremely wealthy have passports, global homes, and the vaults you mention might well be in Switzerland. The extremely wealthy will also have an army of lawyers and accountants to mitigate against this, not to mention trusts and holding companies. It’s a nice idea, but the implementation is tricky. I’m not arguing for them, just being realistic.
      - surgical_fire 1y ago
        What they actually have is an inordinate power to lobby governments. No army of lawyers would save them from actually effective regulation.
        eru 1y ago
        Voting with your feet will save you from that. Of course, if you want to do business in country X, you are subject to the laws of that country X. But otherwise, you can leave that country and settle down elsewhere and do your business there. No matter how 'actually effective' that regulation is. (Unless you do an 'East Germany' and don't allow people to leave.)
        surgical_fire 1y ago
        > Voting with your feet will save you from that. When relevant countries act in tandem, it would work. I would really like to see a billionaire vote with their feet to protect their wealth by moving ro Somalia or something like that. A country can also limit their ability to operate from abroad when they move. In real life, value producing is inherently tied to the society which allows value to be produced.