I don't know how relevant this is now, but here's a link to another post where I expressed my thoughts on what kind of pitfalls you might most likely face -- https://lemmy.world/post/36867409
By the way, what is this phenomenon on Lemmy? Let's say people are reluctant to read and comment on old posts published just a couple of days or a week ago, but with new ones, it's a completely different story. What kind of psychology is this? Or it seemed to me?
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UBI creates economic growth without growing the money supply. Instead, the velocity of money increases significantly. Also, the less people want to work (I disagree with this premise, and instead the more people are able to hold out until a good pay offer is made to them) the lower the interest rates go, as more imports mean more buying of US debt. GDP still counts the profit from imports, and economic health is about consumption (imports also mean you get something tangible in exchange for $) more than production. There will also be less police and healthcare needed when people are not desperate and overstressed. If the only number that matters is GDP, then we should double the cost of healthcare and insurance.
100% increase in economic health over 5 years is a natural result of UBI. 100% increase in consumer spending. It is unlikely that personal income (above UBI) will go down. This is the other way to measure GDP. Stock market definitely wouldn't go down, and wealth increases while not an official GDP measure, is a real/tangible economic health measure.
There is. It's very simple. You increase production because people are begging you to take their money. You are representing the false slavery based (supply side) economic model where if you give banksters and oligarchs all of the money, they will increase production just because they love you and have the money. It's an absurd lie to promote slavery. Production gets increased when sales are expected to increase. Never for any other reason. Money is always available because the banks always have all of it in some form.
More imports means currency devaluation/ inflation on the international market. This pushes interest rates up as people demand higher interest rates to counteract expected inflation. If I buy a bond at $500 and expect that $500 to be worth the equivalent of $400 in 5 years when it matures, I'll demand a higher interest rate to counteract that loss in real value. If you want to see an economy that reliant on imports look at Venezuela during its first oil booms and tell me that's a healthy economy.
That doesn't increase production. If I'm a farmer in Weimar Germany and some guy is begging me to take his wheelbarrow full of cash for a potato that's not going to make me produce more potatoes. That'll just make me doubt the worth of that wheelbarrow worth of cash and think about how hard it will be for me to try and get someone to take that wheelbarrow full of cash so I can get a new plow. Im not going to put in the extra effort to make more potatoes so i can fill my shed with this money that i have to beg people to take and is probably worthless. Money is only as good as what you can buy with it and if it's hard to buy stuff with it eg. Your begging people to take it, then it's not worth anything.
If you completely reject supply side economics, what would have been the solution to stagflation? Harold Wilson's government proved you couldn't just add more money and increase wages to get out of it. It only made it worse.
Interest rates are more complicated than that. For any amount of US $ in the world, if no one ever wants to invest in US because no one wants to do any work anymore, then all of the $ will chase US bonds and chase down interest rates. US is on verge of collapse now, and interest rates are falling. US was on verge in 2009, and absurd QE program brought rates down. Europe had negative rates not long ago.
Manipulating rates is fairly easy, and in general, people/$ take whatever rates they are told to.
UBI can be funded with just tax credits. No money printing. Even if wheelbarrows become the new trusted currency, UBI of 10 wheelbarrows per month will make you rich in wheelbarrows if you are the only one willing to grow potatoes. There is still 0 rationale for UBI to result in wheelbarrow economy.
Whether production costs are lowered through imports, immigration, or automation, local production doesn't matter. Local purchasing power matters. UBI increases purchasing power, and no political divisiveness over losing useless jobs. Apple being able to sell 3x the number of iphones is going to encourage them to open more apple stores, and pay what it takes to staff them.
You've decided to call a massive increase in wealth and freedom to be a technical stagflation problem.
Why would you buy US bonds if you don't want to invest in the US? People don't buy treasury bonds because they have excess USD and don't have anything else to do with it, they can always exchange it for local currency, which pushes down the value of USD. People buy US bonds because it's a reliable asset as they can usually count on inflation being low, the US government being stable and able to tax a highly productive economy to be able to pay the bond back. If any of those three things becomes relatively less true, ie. The euro now has more stable inflation and productivity, then the people will just exchange their excess USD for euro and buy euro bonds instead, or demand a higher interest rate relative to the EU bond to account for the increased risk.
Again why would I want to be rich in wheelbarrows of cash? Even if the government is smart and just starts minting million dollar bills to fix the space issue, it won't matter if I have to beg the guy making the plow to take it. I might as well not sell the potato and keep it, it'll keep it's value better and I'll have a better time convincing the plow maker that this potato, which they can eat, has value as opposed to this million dollar bill. Now that person with a million dollar bill can't even buy a potato, again they have lost purchasing power, even though they have millions of dollars.
Again money is only as good as what you can buy with it, being rich with money you can't buy anything with is about as useful as being rich in monopoly money.
US $ are never destroyed including when they are sent abroad. Holders of US $ must do something with them. US bonds is better than under mattress for financial institutions (which hold all US $ not in a briefcase or mattress) anyway. Exchanging for local currency gives counterparty the US$.
If you want meat or milk for your potatoes, that supplier may have enough potatoes, but can use wheelbarrows to get fruit. There is no reason to believe UBI leads to wheelbarrow economy.
USD are never destroyed, but if they don't come back to the US in the form of buying exports or US bonds then they just start piling up internationally, increasing the supply and decreasing the value. Yes buying US bonds is better then a mattress but EU bonds could be safer, so the bank would exchange there USD for euro and buy euro bonds. The more people exchange USD for euro the more the value of the dollar goes down as supply increases and demand decreases.
You are describing the benefits of money if it is effective, part of it being effective is it has to be a good store of value and other people accepting it. If the value is constantly going down due to inflation, it's less worth it to use money unless you plan on spending it immediately. Money also isn't good if you have to beg people to take it. Money so abundant that you have to beg people to take it is not good money.
People begging you to take there money doesn't incentivize production it just incentivizes raising your prices until they stop begging. If I can get more money producing less potatoes why would I produce more potatoes? So I can hoard this money that is losing value? I'd rather hoarding my potatoes and only sell a couple when I need money because the other farmer doesn't need more potatoes.
Could you explain how it doesn't. Because a modest UBI of $1,000 a month for every American would cost $4.08 trillion which is pretty close to the total revenue collected by the federal government of $4.12 trillion. Even if you massively cut defense spending you'd still have to nearly double taxes to cover that. Yeah you can shift more of the burden to the rich but there's only so much you can do before they just leave. So most likely UBI will require massively increasing the deficit if not just printing money.
UBI is just tax credits, paid by higher debits on others. The $12k/year figure is a net amount received/outlay only for those with no other income. Depending on tax adjustments, an other income figure of $60k to $100k could represent a crossover/breakeven point where at such income levels, it is a net 0 benefit. Those above that income level would pay more taxes than they receive. The higher the UBI, the less it costs, because the higher the UBI, the more programs become useless and should be terminated. But even at $12k, food stamps, other welfare can be eliminated, and clawbacks on SS. At $18k, unemployment insurance eliminate, housing assistance, and bigger clawbacks on SS. Education can be privatized, with public systems collectivized. Program cuts offset overall tax increases/costs. Police budgets can be significantly lowered. And UBI is a better safety net than all of the programs that are cut, in addition to being overall less government discretionary spending and net taxes collected to fund that spending. Carbon taxes can fund freedom dividends, and investment tax hikes are appropriate when investor class gets UBI too. With UBI, sales taxes are no longer "net regressive". Obviously, all programs designed for evil, are natural candidates for extermination, and UBI funding.
Absolutely no reason to increase deficits with UBI, no matter how high it starts or grows.