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Ask HN: Would a universal basic income lead to inflation?

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Re: Ask HN: Would a universal basic income lead to inflation?

#61

Post by thirdwhrldPzz »

myshpa wrote: post #42
major505 wrote: post #13

Dependes on how is the plan to achieve it. If enough people keeps on working to produce enough stuff for everyone who want to buy it.

We don't need everybody working. 75% of jobs are bullshit jobs. Just 2% of people work in agriculture. We slave 30-40 years for a priviledge to live in a house. (Almost) all money in circulation is owned/issued by banks, and the inflation/interest is a way to keep us all in the rat race, all the time consuming, amassing things, never thinking. Our civilization is a construct, a glass cage, and we're all afraid to bre…

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Re: Ask HN: Would a universal basic income lead to inflation?

#62

Post by willnonya »

littlestymaar wrote: post #47
incomingpain wrote: post #43

In Canada during covid we deployed non-universal basic income. It was basic income but not everyone got it. This was not that unlike what the democrats did in the USA. During a pandemic I would hope the government would help people through it. Was it the right call? I have the benefit of hindsight. https://tradingeconomics.com/canada/central-bank-balance-she... We must now deal with the consequences. https://tradinge…

There's inflation everywhere in the western world, so pointing at a specific Canadian policy for the inflation there is logically flawed.

Not exactly. Most western economies followed similar policies which increased inflation in their local economies. The part you're missing is that these economies are all linked through both trade and competition over resources.

Re: Ask HN: Would a universal basic income lead to inflation?

#63

Post by incomingpain »

littlestymaar wrote: post #47
incomingpain wrote: post #43

In Canada during covid we deployed non-universal basic income. It was basic income but not everyone got it. This was not that unlike what the democrats did in the USA. During a pandemic I would hope the government would help people through it. Was it the right call? I have the benefit of hindsight. https://tradingeconomics.com/canada/central-bank-balance-she... We must now deal with the consequences. https://tradinge…

There's inflation everywhere in the western world, so pointing at a specific Canadian policy for the inflation there is logically flawed.

>There's inflation everywhere in the western world, so pointing at a specific Canadian policy for the inflation there is logically flawed.

There is inflation everywhere there was basic income. The USA: https://www.investopedia.com/government-stimulus-efforts-to-...

Switzerland is constitutionally obligated to balance their budget.

Where 77% of voters rejected basic income: https://www.bbc.com/news/world-europe-36454060

They went into some painful deflation during covid and is only at 2.4% inflation and their interest rate is -0.75%. I wish I were able to speak one of the official languages of Switzerland.

Just look at that beautiful 2.5% unemployment rate. If you want to say, 'oh they just have lots of people who are off welfare benefits and not participating in the labour market. 84% participation rate! 3rd best in the world. Switzerland is doing great.

How about Australia? They traditionally do a great job; In 2009 they had no government debt. They seem to have their inflation under control around 3.5% with just 0.1% interest rate?

https://tradingeconomics.com/australia/central-bank-balance-...

Ouch, they did move over to the pool of printing money.

They called it the 'Pandemic Leave Disaster Payment', just looked it up.

No wonder their inflation is a bit high. Seems they didn't do as much as Canada or USA.

Re: Ask HN: Would a universal basic income lead to inflation?

#64

Post by mvdwoord »

em500 wrote: post #57

PhD in econometrics speaking, here's my handy guide to macro-economics: - The main variables of interest are (aggregate) real production / income (GDP/GDI), unemployment and inflation (arguably in that order) - Nobody knows much wrt the causes, effects and future trajectories of any of these. Not professional Ivy League economists who publish in journals like AER, QJE, JPE or Econometrica, nor traders getting paid mi…

Thank you. This should be understood by more.

Re: Ask HN: Would a universal basic income lead to inflation?

#66

Post by dagw »

globular-toast wrote: post #8

Inflation happens due to more money appearing in the economy. Universal basic income doesn't mean creating money. It just means redistributing existing money. So no, there is no connection between UBI and inflation.

It's more complex than that. Poor people spend very differently than rich people. So assuming you just taxed everybody who was 'rich' (define any way you want) to a level where you could fund UBI, then there would be no new money being introduced in the system. However what that money gets used for will change drastically. The 'rich' people would have used that extra money to either buy luxury goods or for saving/investing, the 'poor' people will mostly use that money to pay for food and housing. This change of can have effects on prices even without increasing the money supply.

Re: Ask HN: Would a universal basic income lead to inflation?

#67

Post by SketchySeaBeast »

trgn wrote: post #56
eqvinox wrote: post #22

Earlier quoted context omitted.

Was about to comment exactly this. The question makes no sense, whether or not inflation happens has nothing to do with universal basic income itself, it's a question of where the money comes from.

It might not be that simple. Even if UBI is funded by taxes, UBI would be a wealth redistribution, increasing money on the lower end, generally pushing up demand for goods and services that fulfill basic needs, and lowering the money on the top-end, which is spent differently, like on luxury goods, put on the sideline as savings, or spent chasing assets. This redistribution may cause inflation too, even though the ov…

It's a bizarre thought that the only way for society not to spiral into inflation requires that the poor not be able to purchase the good and service that fulfill their basic needs. Not just be handed the money through UBI as that would cause inflation, but even gain it through jobs - either way it would increase those basic need demands.

Re: Ask HN: Would a universal basic income lead to inflation?

#68

Post by bryanlarsen »

incomingpain wrote: post #43

In Canada during covid we deployed non-universal basic income. It was basic income but not everyone got it. This was not that unlike what the democrats did in the USA. During a pandemic I would hope the government would help people through it. Was it the right call? I have the benefit of hindsight. https://tradingeconomics.com/canada/central-bank-balance-she... We must now deal with the consequences. https://tradinge…

We've learned that deficits are inflationary. We already knew that.

It didn't tell us anything about a UBI in a balanced budget.

Re: Ask HN: Would a universal basic income lead to inflation?

#69

Post by SketchySeaBeast »

globular-toast wrote: post #38
dagss wrote: post #26

Earlier quoted context omitted.

There is no argument here -- why would everything cost $1000 extra? You just said "then". Where is the argument? So if I earn $500 now, and buy 500 lollipops at $1 each. If everyone gets $1000 as UBI, then those 500 lollipops will cost ... $1001 each and $501000 in total? Isn't that absurd? That is what the sentence "everything will cost $1000 extra" means, and the only way "raising the value of zero" makes mathemati…

> There is no argument here -- why would everything cost $1000 extra? Because you can't print food, houses, energy etc. Give everyone $1000 and you won't magically create any more food or any more houses or any more energy out of thin air. So the market will adjust the price to account for the increased demand. It's basic supply and demand. > If everyone gets $1000 as UBI, then those 500 lollipops will cost ... $1001…

But everyone won't immediately demand $1000 more food or housing. Sure I'd buy 1000 slim jims the minute I got the check, but other people may find that ridiculous. Many people will save it, or spend it on something else. Everyone who has their cost of living already accounted for won't participate in this.

Re: Ask HN: Would a universal basic income lead to inflation?

#70

Post by throwaway4aday »

myshpa wrote: post #42
major505 wrote: post #13

Dependes on how is the plan to achieve it. If enough people keeps on working to produce enough stuff for everyone who want to buy it.

We don't need everybody working. 75% of jobs are bullshit jobs. Just 2% of people work in agriculture. We slave 30-40 years for a priviledge to live in a house. (Almost) all money in circulation is owned/issued by banks, and the inflation/interest is a way to keep us all in the rat race, all the time consuming, amassing things, never thinking. Our civilization is a construct, a glass cage, and we're all afraid to bre…

I'd rather live in a house that fits my needs and wants and personal style than I would in a mass produced apartment. I'd rather eat the type of food I enjoy rather than some standard rations cooked up by a factory. I want a certain amount of stuff in my life to satisfy my interests rather than living in a bare room and only enjoying communal property. I prefer to live in a world where silly things like mobile phones and video game graphics cards can lead to revolutions in computing rather than playing the same chess games and watching ballet over and over again for hundreds of years. That said, if you do prefer to live a different way then I'm fine with that, just don't try to foist it upon other people. I would like there to be an option for people who don't want to be part of the rat race where they can go live a relatively comfortable subsistence lifestyle and enjoy seasonal vegetables and walks in the park while the outside world rushes past. It'd probably be nice to vacation there occasionally to take a break from things, maybe it could be funded by tourism.
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