4 ms·

I have only ever heard basic income proposed as the former implementation, never the latter.

by ahoy 13y ago

bryanlarsen 13y ago
The two formulations are similar. If you just print money to give to everybody, you cause inflation, which is a tax on liquid wealth. The wealthy have ways to hedge against inflation, so it's basically a tax on the middle class.
- msellout 13y ago
  What are these magical ways to hedge against inflation that wealthy have access to and middle class don't? By definition, inflation equates to higher salaries for the middle class.
  - bcheung 13y ago
    Commodities, stocks, options, derivatives, and real estate are the most common. But I think they aren't limited to the wealthy per say. The wealthy just know much more about them and have higher percentages of their net worth in these types of things. You can make money if the market goes up, you can make money if the market goes down, and you can make money if the market doesn't go anywhere.
    - msellout 13y ago
      Inflation means higher salaries, which is highly correlated with middle class net worth.
      - bcheung 13y ago
        It's definitely correlated but not 1 to 1. Wealthy people will use leverage though. Effectively their r-value is > 1.0. With middle class it might be around 0.6. The middle class still loses some as their salaries do go up but not as fast. Also, you usually need to quit and go to another job. The wealthy have more control and options.
- bcheung 13y ago
  If the original argument proposes wealth distribution it would cause inflation and deflation at the same time. Inflation of lower end goods and services because the poor will have more money, and deflation in the higher end goods and services because the wealthy will have less. i.e., things get more expensive for the poor, and cheaper for the rich. ;) If we are talking about printing money, it would be similar. The lower end goods and services would get more expensive and the higher end goods and services would stay about the same.
- glomph 13y ago
  Or you could raise taxes on the wealthy...
- ArkyBeagle 13y ago
  "Just print money" does not cause unconditional inflation. It depends on initial conditions.

I have only ever heard basic income proposed as the former implementation, never the latter.

by ahoy 13y ago

I have only ever heard basic income proposed as the former implementation, never the latter.

The two formulations are similar. If you just print money to give to everybody, you cause inflation, which is a tax on liquid wealth. The wealthy have ways to hedge against inflation, so it's basically a tax on the middle class.

msellout 13y ago
What are these magical ways to hedge against inflation that wealthy have access to and middle class don't? By definition, inflation equates to higher salaries for the middle class.
- bcheung 13y ago
  Commodities, stocks, options, derivatives, and real estate are the most common. But I think they aren't limited to the wealthy per say. The wealthy just know much more about them and have higher percentages of their net worth in these types of things. You can make money if the market goes up, you can make money if the market goes down, and you can make money if the market doesn't go anywhere.
  - msellout 13y ago
    Inflation means higher salaries, which is highly correlated with middle class net worth.
    - bcheung 13y ago
      It's definitely correlated but not 1 to 1. Wealthy people will use leverage though. Effectively their r-value is > 1.0. With middle class it might be around 0.6. The middle class still loses some as their salaries do go up but not as fast. Also, you usually need to quit and go to another job. The wealthy have more control and options.
bcheung 13y ago
If the original argument proposes wealth distribution it would cause inflation and deflation at the same time. Inflation of lower end goods and services because the poor will have more money, and deflation in the higher end goods and services because the wealthy will have less. i.e., things get more expensive for the poor, and cheaper for the rich. ;) If we are talking about printing money, it would be similar. The lower end goods and services would get more expensive and the higher end goods and services would stay about the same.
glomph 13y ago
Or you could raise taxes on the wealthy...
ArkyBeagle 13y ago
"Just print money" does not cause unconditional inflation. It depends on initial conditions.