353
XXX (sh.itjust.works)
submitted 9 months ago* (last edited 9 months ago) by xfreed@sh.itjust.works to c/nostupidquestions@lemmy.world

UBI is implemented tomorrow. Every citizen gets $1000 per month.

Landlord now knows you have an extra $1000 that you never had before. Why wouldn't the landlord raise prices?

Now you have an extra $1000 a month and instead of eating rice and beans for a few meals you go out to a restaurant. The restaurant owners know everyone is eating out more so why not raise prices and maximize shareholder profit as always. The restaurant/corporation is on TV saying, "well, demand increased and it is a simple Economic principle that prices had to increase. There's nothing we can do about it".

Your state/country has toll roads. The state needs money for its deficit. UBI is implemented and the state/country sees it as the perfect time to incrementally raise toll prices.

Next thing you know UBI is effectively gone because everything costs more and billionaires keep hitting higher and higher all time net worth records.

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[-] Maggoty@lemmy.world 7 points 9 months ago

If rent everywhere suddenly jumps then the DOJ has a slam dunk case of price collusion.

[-] Kinglink@lemmy.world 5 points 9 months ago

If there was no external stimulus, they would have a slam dunk case. When every gas station jacks the price up 20 cents because the price of oil goes up, it's just the market.

Put 1000 dollars in everyone's pocket, every (smart) landlord will react and change their prices accordingly. That's not "Collusion", and the DoJ will never be able to make a case. That's just landlords paying attention to what happened in the world.

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[-] PanArab@lemm.ee 7 points 9 months ago* (last edited 9 months ago)

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.

[-] SpaceCowboy@lemmy.ca 6 points 9 months ago

I mean... kinda?

I think you're putting too much evil intent behind the motivations though. Supply and demand isn't some made up excuse. If the prices were to stay the same and everyone had more money, then there would be shortages. It's not as if a factory can instantly increase production and the supply chain can instantly get the products on the shelves over night. There are real world factors involved in increasing production.

So what happens is prices increase for many products and this results in inflation. Nobody wants inflation, not even the wealthy. So the central bank will want to tamp down that inflation and the lever they use for that is increasing interest rates. So you wanted to put that UBI towards a mortgage or a car payment? Well a lot of it will be going towards the increased interest on the money you're borrowing.

And the thing about inflation is that it doesn't really get reversed. So the inflation from the initial shock to the economy would take a bite out of UBI (and also the income besides UBI). Your employer may be less likely to give you a raise to offset that inflation because you have UBI. and the fix for the inflation will mean paying more interest on a mortgage.

So yeah, UBI wouldn't gain people much. It's mostly just a poison pill promoted to kids by wealthy people like Andrew Yang so you don't push for an increase in minimum wage. An increase in minimum wage would be a direct transfer of wealth from businesses to employees. They don't want this so they promote UBI which isn't actually feasible to distract from minimum wage increases (which almost everyone supports) and make taxing the wealthy less likely (which is also supported by most, but not when it's to pay for UBI).

[-] orcrist@lemm.ee 4 points 9 months ago

If UBI is pegged to inflation, what you wrote cannot happen. And it ignores the other economic pressure: if people have UBI, they won't waste their lives on horrible minimum wage jobs, which will lead to exciting goodness for millions.

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[-] Fandangalo@lemmy.world 6 points 9 months ago

I believe in UBI, but the Captain Laserhawk show made me aware of how much it could get twisted in fucked up ways. “Don’t watch this show? -$100 from your stipend this month.” I used to think things like that were fear mongering, but the world is all kinds of weird today.

[-] Ziggurat@sh.itjust.works 6 points 9 months ago

Many countries aren't that far from UBI. When you add all the welfare programs, People alrcadx get money When not working or When notgettimg a fair wage (yeah wage are so low that in today's economy minimal wages workers alrcadx need some welfare benefits tolive)

UBI is about generalizing it and making it a livable amont. This would be a taxable income, it would allow working class to work less (letting works for others) whiletaxes won't let the rich get tricher zithouthaving to work

[-] hark@lemmy.world 5 points 9 months ago

Corporations and landlords already jack up prices as much as they can. This is a problem of lack of competition. If there is proper competition then you should be able to buy/rent cheaper things, which would drive downward pressure on prices. The problem is maintaining competition because once one entity gets big enough then it tends to buy out the rest. There is also the issue of collusion, especially collusion through software that recommends pricing based on "market" i.e. average price + extra to drive upward pressure in prices. If multiple entities are using that software to determine prices then they are colluding by proxy.

If a competitive environment is maintained, then companies will drive down prices to capture those UBI dollars since people most dependent on UBI would be looking to spread their UBI as far as they will go, so they'll look for the lowest prices.

[-] Dran_Arcana@lemmy.world 5 points 9 months ago

They probably would. As the value of a dollar drops disproportionate to the value of goods/services, the cost in dollars for the same good/service goes up.

[-] BeautifulMind@lemmy.world 4 points 9 months ago

This is where windfall taxes come back into basic utility. Also it becomes the basis for antitrust action on price collusion if all the sellers coordinate

[-] OldWoodFrame@lemm.ee 4 points 9 months ago

That only works if literally every landlord is conspiring together. If they're not, then people will flock to the landlords that don't increase the price, or only increase a little. Meanwhile, you think car salesmen will see an extra $1000/mo and not try to take advantage? Why do you think landlords will successfully take all $1000 and nobody else will get a penny?

Everyone will try to get that $1000/mo, but they will have to compete with each other and the people with the money are rational actors who will pick the best use for their funds.

Meanwhile, the question of whether it's inflationary will depend on where the money comes from. If it's matched by a tax that pulls money out of the system at the same time the UBI puts money in, then it won't be inflationary it will just redistribute wealth from the taxed (in every plan I've seen, the wealthy) to everyone else.

[-] LodeMike@lemmy.today 6 points 9 months ago

Weren't we just told that they were literally conspiring together via that software "tool"?

But you're right it won't immediately go to landlords. It'll raise prices all around which is fine.

[-] PhlubbaDubba@lemm.ee 4 points 9 months ago

Some would but then immediately lose the competitive edge to those that don't, and there's enough of them that some will break ranks even if they tried to form a trust over it

[-] Blackmist@feddit.uk 3 points 9 months ago

No because the entire tax system would be rebalanced so the average person is no better off.

The point of UBI is to raise the income of the very bottom of the ladder and take it from those at the top, while simultaneously dismantling all the other benefits systems.

But build more houses anyway because that's the root of all issues.

[-] wjrii@lemmy.world 3 points 9 months ago

Yes, but the idea is that UBI money still spends, and there's still overall much more money than that in the economy, so there should be a floor for the housing and food that a UBI will buy you, even if housing and food use up most or all of it.

Kind of like how increasing a rocket's size increases its fuel need increases its size some more, anyone implementing UBI needs to make logical guesses about the amount of inflation and knock-on effects and try to accommodate them, but the idea is to make sure no one is flat broke and starving even if it doesn't really lift people out of poverty directly. SOMEBODY will fill the market niche for people seeking housing and food on UBI, and it will be up to the government to ensure they meet minimum health standards and to incentivize/mandate enough of it. Also, any UBI system probably also needs to have a very graceful downward curve (if you have one at all) as other income increases, so that people will be willing to work to supplement it rather than fearing that they have to choose between UBI and backbreaking labor in exchange for "UBI plus a dollar."

UBI is not a magic bullet, but it is a sort of quick and dirty social safety net that inserts the government's money into the system without the political and administrative overhead of running housing etc. programs itself. Theoretically that might mean things happen more efficiently, and if it's more than the literal bare minimum to live then it also affords a certain amount of agency to the people on it to use their remaining resources how they see fit, but it could go really wrong too. You still need regulation and the power to adjust amounts to ensure that the UBI people receive is adequate for the intended purpose, and a bad UBI program could be run in a way where a government uses it as an excuse to simply abdicate any further responsibility for its people's well being.

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[-] vikinghoarder@infosec.pub 3 points 9 months ago

Wouldn't ubi make more sense if it were more like stamps for necessary things to live: food, clothing, materials, etc?

[-] snooggums@midwest.social 7 points 9 months ago

We have those, and the administration and oversight to nitpick every penny sucks a ton of money out of the funding pool to make sure it goes to the 'right people' for the 'right things'. UBI reduces the overhead to just making sure everyone gets it until they die.

People will spend money on necessary things because they are necessary. We can easily assume that their UBI is being spent appropriately, because doing so is necessary before taking into account any other income they might have.

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[-] themeatbridge@lemmy.world 4 points 9 months ago

Every single study that compared the benefits of directed support vs cash has found that cash is far more effective at helping people escape poverty, even when you account for fraud and substance abuse. Most poor people are poor because of circumstances, not bad decisions.

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[-] scroll_responsibly@lemmy.sdf.org 3 points 9 months ago

Yes. That is correct.

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this post was submitted on 15 Mar 2024
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