4 ms·

Your assertion that a basic income would drive up costs is wrong. What evidence do you have of that? If it's done without printing money, it will not cause infl

Your assertion that a basic income would drive up costs is wrong. What evidence do you have of that? If it's done without printing money, it will not cause inflation. There will be more demand for housing, but how much more? The homeless will now be able to get homes. So, how much demand is that? How much will that drive prices up? The great thing about universal income is that people decide how to spend it. And they will not all spend it on "basic items", and they will not all spend it on the same things.

dragonwriter 13y ago
> Your assertion that a basic income would drive up costs is wrong. What evidence do you have of that? If it's done without printing money, it will not cause inflation. Redistributing income can be expected to cause market-specific price increases in goods that the people benefiting from the redistribution have a greater propensity to purchase than those from whom income is redistributed. (And decreases in other goods.) Adopting Basic Income is pretty clearly going to affect a redistribution of income. So, the increase in prices for basic goods conclusion is sound (the idea that this will end up harming those just above the poverty line by giving them less purchasing power seems, however, far less sound.)
- jganetsk 13y ago
  We can't make these conclusions until we precisely know how people will spend the money. It could go into paying off debt and savings. It could go into luxury items (which the poor love to buy). Also, proposals for basic income often involve curtailing other social programs, which would have an impact as well. A basic income could, for instance, supplant food stamps, thus potentially keeping food prices the same.
  - dragonwriter 13y ago
    > We can't make these conclusions until we precisely know how people will spend the money. It could go into paying off debt and savings. Its not like marginal propensity to consume of people in different income levels is a completely opaque mystery about which we have no information.
    - jganetsk 13y ago
      But there are many other factors other than people's propensity to consume that you need to account for. And I'm not sure if this degree of raise in income practically changes marginal propensity to consume that much.
      - dragonwriter 13y ago
        > But there are many other factors other than people's propensity to consume that you need to account for. Not to determine short-term demand effects of redistribution of income there isn't. > And I'm not sure if this degree of raise in income practically changes marginal propensity to consume that much. Probably not, but since marginal propensity to consume is the amount of the next dollar of income that will go to consumption, that means that the consumption effects are fairly straightforward if you have an idea of marginal propensity to consume.
- dllthomas 13y ago
  It will increase demand for those goods. It will only decrease supply of those goods if we cannot increase production to meet demand. The US has price supports on an awful lot of basic necessities.
yummyfajitas 13y ago
BI shifts spending from investment (money the rich would otherwise have saved) to consumption. Investment goods fall in price while consumption goods rise in price. CPI measures the price of consumption goods, hence it rises.
notahacker 13y ago
If all of your potential tenants are getting an extra >$10,000 per year, and the supply of cheap housing in your city is basically fixed in the short term, you're not going to be looking for a small increase in rent...
- jganetsk 13y ago
  But poor people live in rent regulated apartments.

dragonwriter 13y ago

> Your assertion that a basic income would drive up costs is wrong. What evidence do you have of that? If it's done without printing money, it will not cause inflation. Redistributing income can be expected to cause market-specific price increases in goods that the people benefiting from the redistribution have a greater propensity to purchase than those from whom income is redistributed. (And decreases in other goods.) Adopting Basic Income is pretty clearly going to affect a redistribution of income. So, the increase in prices for basic goods conclusion is sound (the idea that this will end up harming those just above the poverty line by giving them less purchasing power seems, however, far less sound.)

jganetsk 13y ago
We can't make these conclusions until we precisely know how people will spend the money. It could go into paying off debt and savings. It could go into luxury items (which the poor love to buy). Also, proposals for basic income often involve curtailing other social programs, which would have an impact as well. A basic income could, for instance, supplant food stamps, thus potentially keeping food prices the same.
- dragonwriter 13y ago
  > We can't make these conclusions until we precisely know how people will spend the money. It could go into paying off debt and savings. Its not like marginal propensity to consume of people in different income levels is a completely opaque mystery about which we have no information.
  - jganetsk 13y ago
    But there are many other factors other than people's propensity to consume that you need to account for. And I'm not sure if this degree of raise in income practically changes marginal propensity to consume that much.
    - dragonwriter 13y ago
      > But there are many other factors other than people's propensity to consume that you need to account for. Not to determine short-term demand effects of redistribution of income there isn't. > And I'm not sure if this degree of raise in income practically changes marginal propensity to consume that much. Probably not, but since marginal propensity to consume is the amount of the next dollar of income that will go to consumption, that means that the consumption effects are fairly straightforward if you have an idea of marginal propensity to consume.
dllthomas 13y ago
It will increase demand for those goods. It will only decrease supply of those goods if we cannot increase production to meet demand. The US has price supports on an awful lot of basic necessities.

yummyfajitas 13y ago

BI shifts spending from investment (money the rich would otherwise have saved) to consumption. Investment goods fall in price while consumption goods rise in price. CPI measures the price of consumption goods, hence it rises.

notahacker 13y ago

If all of your potential tenants are getting an extra >$10,000 per year, and the supply of cheap housing in your city is basically fixed in the short term, you're not going to be looking for a small increase in rent...

jganetsk 13y ago
But poor people live in rent regulated apartments.