51–60 of 474 posts
On big part of this is Americans a whole need to get better with their money.
I know many people can't save because of low income (or lack thereof), but 78%? Don't forget about all those people making six figures who can't get it together.
The interview here is compelling. Yang's book is even more compelling. But what Yang doesn't do here or in his book is make a powerful case to fiscal conservative spelling out just how universal income will avoid demolishing the economy through inflation. Until this happens, UBI is going nowhere. Although COVID-19 is on everyone's minds right now, it wasn't too long ago that Venezuela, its hyperinflation, and empty s…
https://www.nytimes.com/2019/09/27/business/yang-warren-taxe...
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Inflation is a non-issue. Economic growth has largely been constrained by demand, not supply. And the modern economy is saturated with replacement goods. If the demand for milk goes up, I can switch to soy milk. If soy milk goes up, I can switch to Almond. And if all of them go up, I just drink water. Once most basic needs are met, inflation looses its power with a few exceptions. The financialization of our economy…
> If the demand for milk goes up, I can switch to soy milk. If soy milk goes up, I can switch to Almond. And if all of them go up, I just drink water. I don't understand how this example describes a situation where inflation is a non-issue. I used to be able to afford to drink milk; now, due to inflation, I can only afford to drink water. That sounds like inflation. What am I missing from this example?
Inflation requires a persistent and durable increase in the price of a good. The first issue is that a large proportion of individuals in modern economies are barely making enough money to make ends meet. They are very sensitive to price. An increase in the price of milk would likely cause them to switch to alternatives, thus lowering demand for milk which would then bring the price back down. In effect, the constraint on the wages of the lower classes acts as a constraint on prices of goods. And the second factor, is that in these modern global economies, we have plenty of replacements for almost all types of goods. So if a drought in the mid-west causes soy prices to spike, people will just east less soy based products and switch to something cheaper for a while.
COVID-19 could disrupt that of course. But my hunch is that within a few months after the lockdowns are over, most supply chains will be back up and running. At that point we will be back to being demand constrained (perhaps significantly so if the economic impact is severe enough).
Didn’t George W Bush send a cheque out to every American? I figured that’s what Romney had in mind more than full scale UBI.
[1] Household Expenditure and the Income Tax Rebates of 2001.
https://www.nber.org/papers/w10784.pdf
[2] Consumer Spending and the Economic Stimulus Payments of 2008. https://www.nber.org/papers/w16684.pdf
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I’m so confused why this inflation argument keeps popping up. If you’re paying for the Ubi with taxes then there’s no inflation. Net money supply hasn’t changed (0). If you pay for ubi by printing money then yes, inflation would be a problem. But no one has suggested that. (0) I’m willing to entertain an argument about the velocity of money increasing from ubi but I really doubt it would be too significant.
My understanding is that if it's known that every American adult collects $1000 in addition to their regular income, prices will rise in an attempt to capture some of that known financial excess, so that the net result isn't that everyone gets an extra $1000 in discretionary income, but that everyone ends up paying that extra $1000 back in inflated prices. Similar logic to how raising tariffs doesn't hurt companies a…
The thing is people would still shop around for the lowest price. The vendor with the lowest price gets the business. Even opec can’t raise their prices in unison without someone cheating.
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My understanding is that if it's known that every American adult collects $1000 in addition to their regular income, prices will rise in an attempt to capture some of that known financial excess, so that the net result isn't that everyone gets an extra $1000 in discretionary income, but that everyone ends up paying that extra $1000 back in inflated prices. Similar logic to how raising tariffs doesn't hurt companies a…
Surely McDonald’s already knows everyone has an extra two dollars but they don’t raise their prices because of it. The thing is people would still shop around for the lowest price. The vendor with the lowest price gets the business. Even opec can’t raise their prices in unison without someone cheating.
But we know economically this isn't necessarily true. Some industries are more monopolized than others. Some people aren't in areas where they have good alternative shopping choices. Goods like toilet paper have many different price points and it hasn't been a race to the bottom among the brands to become the cheapest toilet paper. "You get what you pay for" is still a common rule of thumb. Veblen goods would also rise in price.
It's my opinion that UBI would give businesses an opportunity to raise prices in certain sectors, but I concede it wouldn't be universal inflation across the board.
I don't see how a universal basic income could be sustainable in any way. You either have debt hyperinflation, or you have taxes high enough that the universal basic income is meaningless.
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> Yes, there are people that do exactly that, and probably will for all time. Has it ruined the Australian economy? nope. Has there been rampant inflation? nope. It is besides the point really isn't it? Why should the tax payer pay for someone sitting on their behind? Why should I pay for someone else doing nothing? I am close to paying 40% of my income to tax at the moment and I've been saving for a property for yea…
> It (inflation) is besides the point really isn't it? Rampant inflation or the idea that nobody would go to work are commonly held up as big reasons not to have a UBI (or something similar) so it's important to address those. > Why should the tax payer pay for someone sitting on their behind? There are a host of reasons, here's a few off my head: - We accept there will always be people we will pay to sit on their be…
And that's before we even discuss shenanigans like debt jubilees and free healthcare.
Even dramatic cuts to the us military barely make a dent to these kinds of spending proposals.
Earlier quoted context omitted.
Inflation is a non-issue. Economic growth has largely been constrained by demand, not supply. And the modern economy is saturated with replacement goods. If the demand for milk goes up, I can switch to soy milk. If soy milk goes up, I can switch to Almond. And if all of them go up, I just drink water. Once most basic needs are met, inflation looses its power with a few exceptions. The financialization of our economy…
Not sure I follow how the milk as a substitute for water analogy translates to housing. There are no substitutes for housing in desirable areas. When the entire working class suddenly has more income, it doesn't create more housing, it pushes up the price of housing. Sure we could build more, but why? After all, if the price of affordable housing goes up, so does less affordable housing, and luxury housing. And we en…
Earlier quoted context omitted.
> It (inflation) is besides the point really isn't it? Rampant inflation or the idea that nobody would go to work are commonly held up as big reasons not to have a UBI (or something similar) so it's important to address those. > Why should the tax payer pay for someone sitting on their behind? There are a host of reasons, here's a few off my head: - We accept there will always be people we will pay to sit on their be…
America is not spending trillions on their military, and even then it's still barely affordable. To give every American 12k per year would cost about 10 times the military budget (7 trillion versus 780 billion). And that's before we even discuss shenanigans like debt jubilees and free healthcare. Even dramatic cuts to the us military barely make a dent to these kinds of spending proposals.