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Results: Finland’s Basic Income Experiment Help Us Build the Post-Pandemic World

demoshelsinki.fi

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Re: Results: Finland’s Basic Income Experiment Help Us Build the Post-Pandemic World

#181
post #40

Where's the money for the UBI experiment coming from? There's no free lunch, folks...

Where do you think money comes from? Seriously, how do you think it's created?

Money is created through 2 processes:

1. Governments operate in debt-spending mode. So governments issue bonds (glorified IOUs) to banks, which give governments money. Banks then "sell" their bonds to the FED, at which point money is created. Banks use that money to buy more bonds, and the cycle repeats. BTW, to pay for the interest on the bonds, the government uses your taxes -- that's right, your taxes are not used to pay for pretty much anything the government does, it only pays for the debt the previous governments accumulated while debt-spending.

2. Banks receive money deposits, and lend money using those deposits, but not in a 1:1 rate. The rate varies, but, for instance, for every dollar a bank gets in deposits it can lend 10, which means that effectively banks create money. Also consider that this money created out of nowhere is redeposited, repeating the cycle, so in the end a dollar ends up making a thousand. For the record, currently the rate is 1:infinity in the US

Re: Results: Finland’s Basic Income Experiment Help Us Build the Post-Pandemic World

#182
post #3

It only works for a relatively small group of people. Scaling it up to 100% of the population would result in inflation.

It depends, if you have some essential resource where supply is constrained then you might expect inflation. On the other hand goods that are readily available like food or oil shouldn't see any significant difference.

All resources are constrained. Food production requires land which is constrained. No one dies from hunger this days. People receiving UBI will just start buying organic food which is going to increase its price. Rent prices will soar as well because of constrained supply. So do salaries. So do other goods. And boom - there goes inflation.
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