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Comment by jerf

9 years ago

This would address one (but not all) of my fundamental complaints about UBI though: What do you do when due to some disaster, you must pull back your UBI payments? Consider significant war losses, for instance. In this case the answer is that GDP would go down and so would the payment. (Though maybe we can't tie it to GDP per se, since in a war situation you can't afford to see your GDP rise due to forced construction and then also have to pay your populace more.)

That said, it addresses it structurally, but I still think the result would still be a disastrous political explosion if that ever did happen. UBI seems to be fundamentally predicated on the idea that growth and improvement are inevitable, the only possible way that things will develop going into the future, including any structural or societal changes that may develop as a result of UBI or GDP-sharing itself, and therefore there's no need to ask who starts swinging from trees the first time that UBI or GDP-sharing has to be cut back, and what disastrous decisions will be made on the basis of not wanting to be the one swinging from trees.

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jerf

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dredmorbius  9 years ago

The currency inflates.

If the situation lasts long enough, the standard of living falls.

Money exists to move goods around. If all the money is in one place, goods cannot move.

Money is not limited. It is an information measure of, variously, debts, or bidding rights to production. What it can bid on is limited, and how currency-denominated asset valuations change as money supply and circulation do, can also change.

But the problem in the case of a national disaster isn't that money cannot be produced. It's that those who would rely on money to address immediate needs (water, food, shelter, medical care, transport) have no bidding rights (currency, credit, grants) to transact purchases. You're balancing the interests of those outside the disaster zone (assuming there is an outside) with those in it. (Though this generally is the case.)

If the disaster is big enough, and rescue or infrastructure needs sufficiently high, those may affect national accounts and economic activity for a time, but it would take an absolutely massive shock for the impairment of raw productive capacity alone to impact the economy. Far more likely that buying power is lacking amongst a segment of the population.

And for that, money is precisely the cure.