alt Hacker NewsI don't understand UBI.
Let's say a burger costs $10. Then UBI is implemented. But not just like $1K/month UBI... $1M/year UBI... for everyone! There's no way that the burger is still $10 now. Right?
Won't the economy just soak up all the extra UBI money? So a burger will cost $1000 in world where everyone gets $1M/year? And like $20 when everyone gets $1K/month? Isn't it all just a wash?
Replies
Markets have a bid and an ask.
If you have robust supply and real competition, the ask should trend towards cost plus some profit, not whatever maximum price people will pay out of desperation.
I think you're right, and when we talk about UBI it should be expressed in what it can provide not some arbitrary number. Can it provide all required needs (housing, food, transport, entertainment, etc) or not?
I think of it as closer to $500/month, with supply-side government subsidies of food and housing, and then increasing taxes such that the mean person nets 0$.
Only if the government funds it by printing money. If it's funded with taxes on the rich there's no reason for any inflation.
UBI in a world where everyone makes roughly the same amount of money per year would be a wash. You'd just be redistributing money to people in roughly the same percent that is was taxed from them. But we do not live in that world.
And even if it does end up as a complete wash, that still seems like it would lead to a better economic outcome. You'd end up with trickle-up economics. The kind that has incentives for companies to appeal to consumers, and consumers that have money to spend on goods and services.