You'd increase taxes along with UBI, so most middle class people would end up neutral (or slightly positive). You can't just dump tons of money into the economy without turning other dials to keep it stable.

A wealth tax would essentially be redirecting money from the top 1% and guarantee a stable monetary floor for everyone.

Probably there's a dozen other changes, along with bankruptcy protections, interest rates, and anti scam protection would also need to be implemented.

You identified an obvious problem, which has been considered by intelligent UBI advocates that have studied this for a long time.

It's the same argument behind stimulus checks tbh. You give people money so that they can spend it on necessities and that money goes right back into the economy. Since our economy is based on growth and spending, more people spending money overall helps the economy, not hurts it. In addition, you're spending less money on solving societal issues. Well fed sheltered people cause less problems.

UBI will cycle in the bottom of the economy.

When you give a rich person more money they buy assets and increase their wealth, it does not impact their spending activity and has no measurable impact on economic activity.

When you give a middle income person more money they buy something new or pay down debts. Buying something new stimulates economic activity, but paying down debts is really just another wealth transfer to the banks which are owned by rich people.

When you give money to low income people they spend it. They have unmet needs and always have something they can spend that money on. That money then generates economic activity.

Increasing economic activity is what all of the interest rate and inflation talk is about. If you get people spending money that generates activity which increases wages, increases income, and decreases wealth inequality.

A good example is during the GFC the Australian government gave low income people $750AUD, about $350USD. The prime minister asked people to spend this money rather than save it. People bought a bunch of things, in the people I knew it was mostly TVs and new clothes, things you can put off for ages but benefit from whenever you buy them. All of this purchasing stimulated the economy, leading to Australia being less impacted than almost any other G7 nation. We recovered very quickly and boomed from there.

If you want a more long term example look at any welfare. If you have extremely poor people they just die. They are underfed, have weak immune systems, and they face imminent death. They can't access housing so they end up on the street. They have tonnes of inteactions with police and end up in the criminal justice system. They end up having their lives ruined and being purely a drain economically. They suffer.

If you give them enough money to have housing and food they are not going to be as costly to manage. They won't require policing, they won't get sick as often, and they will suffer less. Will this increase the competition for the lowest cost housing? Yes, but the answer to that is to build more housing. Even with the impact to housing cost this will not result in 100% of that payment going to landlords. People don't pay their whole income for rent, they will buy food and other needs first, so if they are faced with too high a rent cost they will remain unhoused but at least tbey will eat.

Landlords only have control over you, because you have to find a place where there are good income sources. If you have an UBI, you have a lot less pressure to move to a city with high-paying jobs.

All of a sudden, you have a bunch of new options. You can move to a rural town. You can move to places with lower average incomes. Hell, you can just buy a lot of land in the middle of nowhere and build a house.

With consumer goods, it's a bit different, because their prices are less about artificial scarcity and more about production costs. However, as noted in some of the other comments, if you just don't print money but finance it with taxes, it won't be that much of an issue.

No, because having money is power. The more money you have, the more leverage you have, in general. This argument comes up a lot and I think it's mostly coming from a widespread attitude of learned helplessness about money. Especially a UBI that is funded by some form of redistribution would mean a lasting shift in wealth inequality that could not be undone just because some businesses would like it to be.

In your hypothetical, the market just jumping in cost like that creates opportunity for competition in the market. Because everyone who could not establish a biz charging X can get into the game charging between X amd X+Y, undercutting the gougers and driving prices lower over time. Theoretically.

That doesn’t seem to happen when you raise minimum wage, so probably not. Also, it hasn’t happened in the places that have tried UBI.

If my landlord raises my rent to match the UBI I'm getting then I'm going to move to the Apartment down the street that DIDN'T raise their rents because I FINALLY can afford to do that! Or are you saying that Landlords are ILLEGALLY colluding with one another to ensure Rent remains high? If that's the case why are you bringing up UBI?

Any UBI system worth it's salt wouldn't be providing a flat amount, it should be based on regional cost of living. So if prices all went up, UBI would have to go up as well.

I’ve been saying this for a while, and that’s why I think a complex problem like this needs a more complex solution than UBI.

Essentially I think successful UBI would need to be something like UBS instead (Universal Basic Support). Instead of only being money it needs to consist of free services. That way it’s harder for third parties to leech it away.

So instead of “Here’s $1000 a month, do whatever you want” it would need to be more like “You can get free healthcare here, free electricity through this company, free food rations from this grocery store.” Then if you want things above UBS you need to have some source of income.

No, because you could choose to spend it elsewhere, and you might not even feel obligated to live at or work at where it's most expensive anymore. The real problem with UBI are the way speculative investors (meme stocks, crypto, penny stocks, casinos, any gambling addiction, etc) would prey on the vulnerable people, and there's a lot of ways to handle that but only if there is a will.

But the real reason UBI won't happen is because getting people to die is much cheaper than paying them to live so they have to pay even more for future generations. UBI can't happen without proper future planning for entire societies. It works great in the short term and in test cases, as a lot of charitable ideas do until the predators come in.

Formally, market efficiency makes this impossible without price fixing.

Practically, UBI does result in mild inflation of consumer prices in most models, but it’s because the market changes shape slightly to meet new consumer demand, as opposed to a blanket price increase of everything.

My understanding is that UBI would benefit the impoverished the most, allowing them to get out of debt, put food on the table, or maybe even put a roof over their head, finally opening the door for them to live a prosperous life. This significant change and opportunity for them outweighs the inflation they may face. Food, water, shelter, and healthcare are a human right and UBI is one way to deliver that, so we should probably commit for that reason alone. With no other changes, worst case scenario, those of us that are better off can begrudgingly cope with the inflation potentially created. But besides the potential price hikes it’s worth mentioning that we will all see a return on investment as a society when our weakest are made stronger.

As for where the money should come from and how to fight the potential inflation so us in the middle class don’t lose the quality of life we’ve become accustomed to, we need to make the ultra wealthy finally pay their fair share, break up monopolies to create competition, and properly punish exploitation.

This is a problem due to monopolies. Any industry that is a monopoly should be nationalized or very heavily regulated.

I mean, if demand for restaurants goes up, wouldn't there just be more restaurants opening up?

I agree with the landlord thing though, cause landlords are generally dicks. Maybe if local governments imposed more rent caps.

There will be some changes in prices, but I don't think it is going to even out to everyone ending up even.

You'll probably see some inelastic demand goods increase in cost, but I don't see that taking up the whole paycheck.

If anything, I think the largest impact will be the unskilled labor market, as the threat of starvation will no longer be as real.

Plenty of arguments given here for why it's unlikely to happen, but I'd like to provide a slightly different perspective of how I think UBI would ideally be implemented.

I think UBI should come with abolishment of minimum wage and a uniform decrease in everyone's income from work (e.g. if UBI is 1k per month, then reduce everyone's income by approximately 1k/month), so there wouldn't be an obvious overall increase in everyone's income. Workers now have more leverage to negotiate wages because they don't need to worry about dying if they lose their job, and that should push up their wages to wherever is appropriate for their line of work. So overall, it'll probably lead to a bit of inflation, but through the the same mechanism that inflation has always occurred rather than telling your landlords that everyone has an extra 1k for you to take now.

Does this make sense? Good or bad idea? Discuss.

When the first COVID stimulus check came in, Walmart sold tvs for, after tax, the exact amount the check was worth.

Bottom line is you'd have to freeze price increases, or reduce them somehow. It's a mess of a problem.

I won't spend my money at those asshole places. If they're the type of place to pull this shit, I probably already don't shop there.

With what leverage? If you have no-strings-attached income, you are not facing destitution at the loss of your job, and it becomes a lot less risky to walk away from a job and move somewhere else. If all the landlords in one area do that, employers in that area will probably have to pay more.

But imo, some type ubi system should be paid for with a vat tax that just pulls it's income directly out of economic activity, which would make it harder to avoid paying for. The result would be higher prices anyway which would probably offset the income, but new situation would be that workers have a lot more leverage in their employment and living situation.

My other hot take is that with a ubi, minimum wage should be abolished. Basically, with ubi the need for it would be lessened and more people might be willing to work jobs that they might not have been able to live off of without a ubi. But again, these are basically my hot takes

In a properly regulated functional market they couldn't. Their renter would move to a place the owner didn't do that. The same would apply to any other market.

In reality there would be temporary inflation, since there is a bunch of new money to drive demand. But again with a well regulated market working as it should, supply would eventually increase to meet the new demand and everything would reach equilibrium again.

That could be mitigated, by slowly increasing the UBI from 0 to 1000 incrementally. The slower it is, the more time the market has to supply the increasing demand.

Social housing is the solution. Why invest in ubi without investing in social housing. Break the renter class.

It's still a free market, rent doesn't really seem linked to income at all, but to demand and competition. Same with restaurants, it's complex, but income of the patrons is the least of the concerns.

In my country we don't even have minimum wages so I don't have to worry about this! 🤣🤣🤣 tsk... first world problems...

Yes. Inflation is when billionaires think you've got a few dollars they haven't fucked you out of. You have to sneak welfare past them already, so full UBI would be sniffed out by their snouts immediately.

One of the easiest ways to resolve this problem is artificially increasing supply. The government can subsidize the production of food, housing, medical care, and education. It doesn't matter if people have more money if the supply of a good is always high. Having the government be a provider of these goods in monopolistic or inelastic markets would also be a good idea.

I don't think UBI should be implemented tomorrow. Subsidizing things today would be a much better first step. Several years of increasing supply and then starting UBI is a better bet.

This is why you also need government/public housing. When rents went up here the government had more houses built.

OP is arguing for more government involvement in the economy but doesn’t know it. The government can set prices and subsidize certain things, at least they do that here.