8 ms·

Wouldn't nationwide UBI just make everything more expensive? Most people who work will continue to work, most people who don't, won't. More money in circulation

Wouldn't nationwide UBI just make everything more expensive? Most people who work will continue to work, most people who don't, won't. More money in circulation = higher prices. If you care about poor people, why not just try to fix welfare with e.g. Negative Income Tax proposed by Milton Friedman (https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax)?

markvdb 6y ago
Of course it will cause some kinds of inflation. Just as zero interest rates also create inflation (stock market, housing, ...). UBI would certainly create a different kind of inflation. Negative income tax would probably not work as efficiently. What if it takes a year and a half of administratoin for the negative income tax to reach people living hand to mouth? That's a very slow tool to get money into everyone's hands...
CrazyDave 6y ago
Funding UBI through "printing" money would cause inflation because that increases the money supply. But most UBI proponents plan to fund it through new taxes and consolidation of the current "means based" welfare programs.
- ChuckNorris89 6y ago
  Ok, and who/what will you tax for the extra UBI money? Can't tax the corporations and the rich or else they will "move elsewhere and increase unemployment" as we're made to believe so why then do I fear that the middle class worker will be hit yet again? I'd rather we lower taxes on the workforce than increase them to give away free money.
  - akie 6y ago
    Increase taxes on wealthy people and give it to poorer people so that almost everyone is better off. How is this a bad idea again?
    - blueterminal 6y ago
      It is a great idea but seemingly impossible to implement successfully. Has it ever been successful?
      - adrianN 6y ago
        There are various taxes that work that way. Depending on how high they are (and how high the taxes that work in the opposite way are) it works better or worse. The difference between rich and poor is not the same everywhere on the planet.
    - _Understated_ 6y ago
      How do you define "wealthy"?
      - adrianN 6y ago
        People who make more than the median.
    - AdrianB1 6y ago
      Then rape the women and molest the children in the process, then kill them all when you're done; it is as moral as your proposal, just finishing the sentence. "How is this a bad idea again", you say?
      - dang 6y ago
        Would you please stop posting ideological flamebait to HN? We've asked you before, and you've done it twice in the last 24 hours. Not cool. The GP comment wasn't great either but this was much worse. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
        AdrianB1 6y ago
        Sorry, it is not by intention, probably cultural difference interpreting the same words in different ways. What is the second comment that looks out of line?
  - CrazyDave 6y ago
    For simpler math, lets assume someone makes $10k per month pre-tax. Their tax rate would increase by roughly 10%, and they would receive a $1,000 check in the mail. The net cost (and benefit) for most people could be 0. Well, why do UBI at all? I think the goal is to simplify our means based well fare system, which can create some economically inefficient incentives. For example, imagine someone receiving disability checks who could go back to work. Going back to work would mean they stop receiving disability checks, and they could easily end up reducing their income.
    - drran 6y ago
      > Well, why do UBI at all? Well, later it's possible to vote for a candidate, which promise to reduce taxes by 3x and increase UBI by 3x, like at Alaska: https://www.vox.com/future-perfect/2019/9/5/20849020/alaska-permanent-fund-universal-basic-income https://www.vox.com/future-perfect/2019/9/5/20849020/alaska-...
- blueterminal 6y ago
  There are 209,128,094 people over 18 in US. Let's assume $1,000/month UBI. It would mean we need to get $209128094000 (~ $210B) a month ($2.5T a year) from somewhere. Where would we get it from? Are there any extensive papers explaining it? I'm super curious.
  - truthwhisperer 6y ago
    No, no please not ask that question. You have to think inclusive. UBI will solve all the problems and who is going to pay is not relevant
- csunbird 6y ago
  Which means the productive members of the society will be paying even more taxes, just to feed off people that think living of the UBI is good enough for them, if the UBI is not funded through the printing of the money. How is that fair to working people with ambitions?
  - imtringued 6y ago
    What about unemployed people with ambitions?
    - drran 6y ago
      They can start their own business.
kuang_eleven 6y ago
Negative income tax is an implementation of a basic income!
- blueterminal 6y ago
  Yes, but only for the poorest. And I think only they need it.
  - kuang_eleven 6y ago
    It ends up being functionally the same, with the possible exception of how often the money is dispersed. A UBI and a negative income tax can end with the exact same amount of net money dispersed to anyone, it just requires tweaking the income brackets and rates.
    - imtringued 6y ago
      Okay so why not focus on negative income taxes then? If they are functionally equivalent and governments already have experience with them why not do away with UBI?
thinkingemote 6y ago
Do prices rise when consumers have more money to spend? Is consumer inflation tied to employment rates? Does inflation slow when poverty grows? Intuitively it kind of makes sense that everything would get more expensive but if you consider millionaires spending on stocks, the stocks don't rise in price when the millionaires get more money, they are kind of independent. I think the same for poor people. Prices shouldn't rise because more people can afford to buy something but it makes sense that some would rise prices as more people will be able to afford the product. I guess the market and competitors is meant to keep prices down.
- blueterminal 6y ago
  > Prices shouldn't rise because more people can afford to buy something. Of course they should, and they would. It's really econ 101. More demand = higher prices. Why wouldn't it? If you were selling apples for $1/kg, and you have it sold daily very rapidly, wouldn't you try to make $1.1/kg? $1.2/kg? $2/kg? Until you can't sell everything you produce, or, more precisely, until you can't make more profit.
  - tonyedgecombe 6y ago
    Only when supply is constrained. If a grocer tried to double their prices then their competitors would out compete them. Property in SV might be a different matter although I’m guessing this is going to be cost neutral for most people there or even negative.
- Guthur 6y ago
  This feels very much like a false dichotomy. Many millionaires, I assume we mean the extremely wealthy, have the majority of their wealth tied to the extreme growth of stocks based on some extreme economic forces. E.g. bezos with Amazon, Bill gates with Microsoft etc. And so some how comparing that to standard consumerism seems a little off.
  - thinkingemote 6y ago
    Yeah the millionaire thing feels off to me, but the idea behind it.... Do prices for consumer goods rise when there are more consumers? Do things rise in price when the people who usually buy the things have more money? Are things more expensive in more populated areas or less?
dragonwriter 6y ago
> Wouldn't nationwide UBI just make everything more expensive? Not “just” and not “everything”, but yes. > Most people who work will continue to work, most people who don't, won't. If UBI replaces or offsets, in whole or part, minimum wage, it probably increases employment immediately. The reduction in labor market friction and perverse incentives of means-tested welfare probably increases it in the long term. So, I wouldn't be confident in that description. But even in the usual “funded by high end taxes” formulation, it increases velocity of money in the domestic economy and consumption spending, so it should produce some upward price pressure. The basic upshot of this is that the downward redistribution will compress outcomes, but raise the bottom so that less that would be assumed if you took the benefit level and compared it to pre-policy price levels. > If you care about poor people, why not just try to fix welfare with e.g. Negative Income Tax proposed by Milton Friedman NIT and UBI funded by progressive income taxes are identical policies.
- twblalock 6y ago
  > NIT and UBI funded by progressive income taxes are identical policies. Not really, because under UBI, literally everyone would get money from the government, hence the "U". If you remove that feature of the system it wouldn't be UBI anymore, it would just be yet another means-tested system. Unlike UBI, Friedman's negative income tax would phase out and not everyone would be eligible. With NIT, some people would get money, some would pay no taxes, and some would pay taxes.
  - luckylion 6y ago
    > Not really, because under UBI, literally everyone would get money from the government, hence the "U". If you remove that feature of the system it wouldn't be UBI anymore, it would just be yet another means-tested system. The idea of UBI is that everybody gets it, but many/most of us will pay higher taxes that send it right back. It'll just add a little bit of overhead by moving the money around, but you don't get to keep it.
    - twblalock 6y ago
lmm 6y ago
> Wouldn't nationwide UBI just make everything more expensive? Most people who work will continue to work, most people who don't, won't. More money in circulation = higher prices. UBI would have to be funded by a corresponding increase in high tax brackets. > If you care about poor people, why not just try to fix welfare with e.g. Negative Income Tax proposed by Milton Friedman (https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax)? That's like UBI for people who can hold down a minimum wage job, but it does less to help the very worst off. Why do you prefer it over UBI?
- balfirevic 6y ago
  > That's like UBI for people who can hold down a minimum wage job, but it does less to help the very worst off. Actually, it is exactly like UBI, under NIT you also get money if you don't have a job.
- deleted 6y ago
  [deleted]
AdrianB1 6y ago
It depends on the percent of people on UBI; if it is 5-10% it will be injecting money on the market without products and services to match; if it's 80% it will make everything a lot cheaper because the demand-supply will shift to cheaper products that 80% of the buyers are looking for. Think about the 5000 Euro car Renault built and sold in Europe while their other cars were selling for 20-30,000 Euro.
akvadrako 6y ago
NIT and UBI can be functionally identical, depending on the income tax curves. https://www.scottsantens.com/negative-income-tax-nit-and-unconditional-basic-income-ubi-what-makes-them-the-same-and-what-makes-them-different https://www.scottsantens.com/negative-income-tax-nit-and-unc...

markvdb 6y ago

Of course it will cause some kinds of inflation. Just as zero interest rates also create inflation (stock market, housing, ...). UBI would certainly create a different kind of inflation. Negative income tax would probably not work as efficiently. What if it takes a year and a half of administratoin for the negative income tax to reach people living hand to mouth? That's a very slow tool to get money into everyone's hands...

CrazyDave 6y ago

Funding UBI through "printing" money would cause inflation because that increases the money supply. But most UBI proponents plan to fund it through new taxes and consolidation of the current "means based" welfare programs.

ChuckNorris89 6y ago
Ok, and who/what will you tax for the extra UBI money? Can't tax the corporations and the rich or else they will "move elsewhere and increase unemployment" as we're made to believe so why then do I fear that the middle class worker will be hit yet again? I'd rather we lower taxes on the workforce than increase them to give away free money.
- akie 6y ago
  Increase taxes on wealthy people and give it to poorer people so that almost everyone is better off. How is this a bad idea again?
  - blueterminal 6y ago
    It is a great idea but seemingly impossible to implement successfully. Has it ever been successful?
    - adrianN 6y ago
      There are various taxes that work that way. Depending on how high they are (and how high the taxes that work in the opposite way are) it works better or worse. The difference between rich and poor is not the same everywhere on the planet.
  - _Understated_ 6y ago
    How do you define "wealthy"?
    - adrianN 6y ago
      People who make more than the median.
  - AdrianB1 6y ago
    Then rape the women and molest the children in the process, then kill them all when you're done; it is as moral as your proposal, just finishing the sentence. "How is this a bad idea again", you say?
    - dang 6y ago
      Would you please stop posting ideological flamebait to HN? We've asked you before, and you've done it twice in the last 24 hours. Not cool. The GP comment wasn't great either but this was much worse. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
      - AdrianB1 6y ago
        Sorry, it is not by intention, probably cultural difference interpreting the same words in different ways. What is the second comment that looks out of line?
- CrazyDave 6y ago
  For simpler math, lets assume someone makes $10k per month pre-tax. Their tax rate would increase by roughly 10%, and they would receive a $1,000 check in the mail. The net cost (and benefit) for most people could be 0. Well, why do UBI at all? I think the goal is to simplify our means based well fare system, which can create some economically inefficient incentives. For example, imagine someone receiving disability checks who could go back to work. Going back to work would mean they stop receiving disability checks, and they could easily end up reducing their income.
  - drran 6y ago
    > Well, why do UBI at all? Well, later it's possible to vote for a candidate, which promise to reduce taxes by 3x and increase UBI by 3x, like at Alaska: https://www.vox.com/future-perfect/2019/9/5/20849020/alaska-permanent-fund-universal-basic-income https://www.vox.com/future-perfect/2019/9/5/20849020/alaska-...
blueterminal 6y ago
There are 209,128,094 people over 18 in US. Let's assume $1,000/month UBI. It would mean we need to get $209128094000 (~ $210B) a month ($2.5T a year) from somewhere. Where would we get it from? Are there any extensive papers explaining it? I'm super curious.
- truthwhisperer 6y ago
  No, no please not ask that question. You have to think inclusive. UBI will solve all the problems and who is going to pay is not relevant
csunbird 6y ago
Which means the productive members of the society will be paying even more taxes, just to feed off people that think living of the UBI is good enough for them, if the UBI is not funded through the printing of the money. How is that fair to working people with ambitions?
- imtringued 6y ago
  What about unemployed people with ambitions?
  - drran 6y ago
    They can start their own business.

kuang_eleven 6y ago

Negative income tax is an implementation of a basic income!

blueterminal 6y ago
Yes, but only for the poorest. And I think only they need it.
- kuang_eleven 6y ago
  It ends up being functionally the same, with the possible exception of how often the money is dispersed. A UBI and a negative income tax can end with the exact same amount of net money dispersed to anyone, it just requires tweaking the income brackets and rates.
  - imtringued 6y ago
    Okay so why not focus on negative income taxes then? If they are functionally equivalent and governments already have experience with them why not do away with UBI?

thinkingemote 6y ago

Do prices rise when consumers have more money to spend? Is consumer inflation tied to employment rates? Does inflation slow when poverty grows? Intuitively it kind of makes sense that everything would get more expensive but if you consider millionaires spending on stocks, the stocks don't rise in price when the millionaires get more money, they are kind of independent. I think the same for poor people. Prices shouldn't rise because more people can afford to buy something but it makes sense that some would rise prices as more people will be able to afford the product. I guess the market and competitors is meant to keep prices down.

blueterminal 6y ago
> Prices shouldn't rise because more people can afford to buy something. Of course they should, and they would. It's really econ 101. More demand = higher prices. Why wouldn't it? If you were selling apples for $1/kg, and you have it sold daily very rapidly, wouldn't you try to make $1.1/kg? $1.2/kg? $2/kg? Until you can't sell everything you produce, or, more precisely, until you can't make more profit.
- tonyedgecombe 6y ago
  Only when supply is constrained. If a grocer tried to double their prices then their competitors would out compete them. Property in SV might be a different matter although I’m guessing this is going to be cost neutral for most people there or even negative.
Guthur 6y ago
This feels very much like a false dichotomy. Many millionaires, I assume we mean the extremely wealthy, have the majority of their wealth tied to the extreme growth of stocks based on some extreme economic forces. E.g. bezos with Amazon, Bill gates with Microsoft etc. And so some how comparing that to standard consumerism seems a little off.
- thinkingemote 6y ago
  Yeah the millionaire thing feels off to me, but the idea behind it.... Do prices for consumer goods rise when there are more consumers? Do things rise in price when the people who usually buy the things have more money? Are things more expensive in more populated areas or less?

dragonwriter 6y ago

> Wouldn't nationwide UBI just make everything more expensive? Not “just” and not “everything”, but yes. > Most people who work will continue to work, most people who don't, won't. If UBI replaces or offsets, in whole or part, minimum wage, it probably increases employment immediately. The reduction in labor market friction and perverse incentives of means-tested welfare probably increases it in the long term. So, I wouldn't be confident in that description. But even in the usual “funded by high end taxes” formulation, it increases velocity of money in the domestic economy and consumption spending, so it should produce some upward price pressure. The basic upshot of this is that the downward redistribution will compress outcomes, but raise the bottom so that less that would be assumed if you took the benefit level and compared it to pre-policy price levels. > If you care about poor people, why not just try to fix welfare with e.g. Negative Income Tax proposed by Milton Friedman NIT and UBI funded by progressive income taxes are identical policies.

twblalock 6y ago
> NIT and UBI funded by progressive income taxes are identical policies. Not really, because under UBI, literally everyone would get money from the government, hence the "U". If you remove that feature of the system it wouldn't be UBI anymore, it would just be yet another means-tested system. Unlike UBI, Friedman's negative income tax would phase out and not everyone would be eligible. With NIT, some people would get money, some would pay no taxes, and some would pay taxes.
- luckylion 6y ago
  > Not really, because under UBI, literally everyone would get money from the government, hence the "U". If you remove that feature of the system it wouldn't be UBI anymore, it would just be yet another means-tested system. The idea of UBI is that everybody gets it, but many/most of us will pay higher taxes that send it right back. It'll just add a little bit of overhead by moving the money around, but you don't get to keep it.
  - twblalock 6y ago

lmm 6y ago

> Wouldn't nationwide UBI just make everything more expensive? Most people who work will continue to work, most people who don't, won't. More money in circulation = higher prices. UBI would have to be funded by a corresponding increase in high tax brackets. > If you care about poor people, why not just try to fix welfare with e.g. Negative Income Tax proposed by Milton Friedman (https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax)? That's like UBI for people who can hold down a minimum wage job, but it does less to help the very worst off. Why do you prefer it over UBI?

balfirevic 6y ago
> That's like UBI for people who can hold down a minimum wage job, but it does less to help the very worst off. Actually, it is exactly like UBI, under NIT you also get money if you don't have a job.
deleted 6y ago
[deleted]

AdrianB1 6y ago

It depends on the percent of people on UBI; if it is 5-10% it will be injecting money on the market without products and services to match; if it's 80% it will make everything a lot cheaper because the demand-supply will shift to cheaper products that 80% of the buyers are looking for. Think about the 5000 Euro car Renault built and sold in Europe while their other cars were selling for 20-30,000 Euro.

akvadrako 6y ago

NIT and UBI can be functionally identical, depending on the income tax curves. https://www.scottsantens.com/negative-income-tax-nit-and-unconditional-basic-income-ubi-what-makes-them-the-same-and-what-makes-them-different https://www.scottsantens.com/negative-income-tax-nit-and-unc...