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The problem I envision with a basic income model is that it could have an inflationary effect - shifting the baseline. The only way this doesn't happen is if ou
by achy 13y ago
The problem I envision with a basic income model is that it could have an inflationary effect - shifting the baseline. The only way this doesn't happen is if our basic income economies exploit non basic income economies - and even this wouldn't prevent housing, energy, and (non artificially) scarce items from inflation.
- AnthonyMouse 13y agoWhy do you expect inflation? Inflation only occurs if the source of the money comes from creating currency. If it comes from taxation then you're not increasing aggregate demand at all, you're just eliminating the large disincentive to seeking employment created by the discontinuation of government benefits if you succeed.
- achy 13y agosorry, price inflation. Supply and demand.
- AnthonyMouse 13y agoThere is no difference between "inflation" and "price inflation." Suppose that yesterday you received $50 from government assistance programs (e.g. food assistance) but today you receive $50 as a basic income and no food assistance. You have the same amount of money to spend. Suppose that yesterday you received no government assistance and paid no net taxes but today you receive $50 as a basic income and pay $50 in new taxes. You have the same amount of money to spend. There will be some people who, on net, receive more or less from a basic income (less the taxes required to pay for it) than they do now -- mostly the very rich would pay more and the working class would receive more -- but the net amount of money in the average person's pocket remains the same. The difference is that you don't have the disincentive to seeking employment that the current unemployed do when they lose government assistance by taking a job.