Comment by scubbo
1 day ago
> Higher taxes for anyone earning over $100k
Not a failure. Society working as intended.
> [...] lower quality of life [...]
Agreed, that would be a failure, if it were to happen. How on earth could "giving people money" lead to a lower quality of life for them?
> Politicians and corporations earn billions in profits on UBI distribution fees
As opposed to the much higher fees accrued by the more-complex means-tested programs today?
Correct me if I'm wrong, but my understanding of the economy is that money is earned when someone creates value. Just "giving people money" without having the corresponding value be created increases demand for valuable things without increasing supply, leading to inflation and the costs of said things going up.
Money is earned either by extracting rents/profits/taxes, through borrowing or by selling something. None of these have to actually create value.
You can advertise something without value and “earn” money selling it. The perceived value was created by advertising, but didn’t actually exist.
You can raise funds, sell at a loss, buy out the competition and later drive up prices without creating any value. This is how Amazon got started.
You can go to the bank, borrow money(increasing the money supply, driving inflation, thanks to fractional reserve banking), buy up houses (driving housing inflation), and extract rent without doing anything useful for your community.
In fact, cloud computing is largely that: buying up all the compute and renting it out to those without the capital to buy themselves.
A person can create value without earning money (parenthood, volunteering), and one can earn money without creating value (rent extraction), although the word “earn” is under a lot of strain.
You're wrong. People have inherent value whether they "create value" or not. UBI is not about rewarding people for some economic contribution but rather provides everyone with a reasonable amount of money so they can survive (hopefully) and stay healthy and have a shot at the prerequisites for "freedom" to exist.
Money has been completely manufactured in financial markets already and doesn't seem to be screwing us over too badly. I hardly think UBI paid from taxing the largest economic surpluses and wealth in the history of the world will have a significant impact on inflation.
Any inflationary impact would happen if you print the money supply to pay UBI rather than using existing dollars in the supply.
You're also completely writing off the additional surpluses that people receiving UBI could provide if they're confident they can get by on a daily basis and also ensure they stayed healthy and working rather than spiraling any time one or two things go sideways.
In, say, the Netherlands we already have something that's very close to free money. I know many, many folks perusing said mechanism(s). Sure, it's not UBI and there is some stigma involved but I think it's the closest you'll get. I won't be snarky about this, but let's just say I need some.. convincing this reliably addresses the primary obstacles in economically disadvantaged folks. In my experience our economic situation is downstream from other more urgent issues that we find hard to talk about. Culture, ethics, behavioral and cognitive differences, etc. Thorny, nasty things, but .. real and more importantly they don't respond to dollar bills. In fact, it may make it worse.
But anyway, I'm not too worried about inflation mainly because of the points you raised, but I am worried about resource constrained markets like housing. If nothing is done to stop this, and I don't know how, I'm sure they'll just raise the prices to completely cancel out any UBI you'll pass around. It's not just housing either, but that's an obvious one.
2 replies →
Value is subjective and some value takes unknown time to create. So money is also given to people in that grey area.
> How on earth could "giving people money" lead to a lower quality of life for them?
Prices will increase more than the UBI money you give them.
You saw what happened during COVID pandemic and UBI stimulus checks?
High cost of living today is precisely because of UBI.
The real problem during the pandemic is most of the stimulus money went to the already wealthy. Higher cost of living is because we keep printing money, that money goes to banks, and inflation ends up being an implicit tax on the poor who aren't invested in the markets.
What I can definitely tell you is that the people that currently can't even afford basic things are somehow causing higher cost of living. The economy is not jacked up right now because we gave people laughably small amounts like a thousand dollars. The real problem is people like Sergei Brin spending 57 million dollars to fight a one-time 5% tax.
Pandemic checks were from expanding the money supply IIRC rather than distributed taxes on the already very wealthy. These are very different mechanisms. What they did (expanding the money supply) drove inflation way more than the actual money in people’s pockets. Otherwise you’d have argue people shouldn’t get paid because it causes too much inflation.