> UBI creates no money. It just redistributes it a little. It doesn't devalue the currency, and isn't inflationary.
"Creating" money is not a well-defined thing and is not what causes inflation. In fact, inflation is complex and not well understood but what we know is that it is driven by people's incomes (a flow) not the size of monetary aggregates (which are a stock). In fact you can run the whole economy with only a single dollar or with trillions of dollars, and as long as incomes are unchanged there isn't going to be any inflation as you switch between these two regimes of many slow dollars or a single fast dollar. That said, there are some channels by which UBI can lead to inflation:
* If you take money from someone with a lower propensity to spend and give it to someone with a higher propensity to spend, then this creates inflationary pressures.
* If you give someone enough money so they drop out of the labor market or reduce their hours, then this can cause inflation
* The heavy taxes may discourage employment as well -- why work if half your income is taken away if you can do nothing and have the necessities of life provided.
Whether or not these factors actually cause inflation and how much is an unknown. It's certainly not obvious that it wont, and there is reason to believe that it will. Merely the statement that "no new dollars are created" has no bearing on whether it is inflationary or deflationary.
Unfortunately small experiments in a city or two is not going to answer this question. An entire nationwide experiment for a few decades will answer it, but by then we could have a society in which a large chunk of the population simply refuses to work and as a result is unfit for any kind of productive employment. That's the risk with a real UBI - what happens two or three generations on down the road if the culture shifts so that people expect the necessities of life to be given to them without producing anything in return. The risk is to the productive capacity of society as a whole, and to large swaths of it that need to learn important life lessons in order to become productive members of society.