<story><title>Guaranteed Minimum What?</title><url>https://granolashotgun.com/2017/05/05/guaranteed-minimum-what/</url></story><parent_chain><item><author>chris_va</author><text>I realize that UBI is a very popular position on HN, so I am hoping someone here has given this more thought and can comment.&lt;p&gt;My problem with UBI is that all tests to date look great, but have only been done on a micro level. The fundamental issue I would like addressed is the macro scale inflation you would expect when redistributing trillions of dollars without commensurate economic value being created directly.&lt;p&gt;Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, etc).&lt;p&gt;If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined.&lt;p&gt;Anyway, it would be nice if it worked, but I&amp;#x27;ve seen no evidence that it will in a large system. Comments appreciated.</text></item></parent_chain><comment><author>bryanlarsen</author><text>Why would you expect inflation?   All sane UBI proposals don&amp;#x27;t create money, they just move money from rich people to poor people.  If you&amp;#x27;re a Friedman disciple, then &amp;quot;inflation is a monetary phenomenon&amp;quot; and we can stop there.&lt;p&gt;If we&amp;#x27;re moving money from rich people to poor people, perhaps we&amp;#x27;ll see the prices of stuff rich people buy go down and the prices of stuff poor people buy go up.&lt;p&gt;The vast majority of stuff poor people buy is demand limited, not supply limited, so if poor people start buying more PS4&amp;#x27;s, Sony will just make more.&lt;p&gt;I&amp;#x27;ll also assert that food is demand limited, we have lots more capacity to increase production than people think.   It doesn&amp;#x27;t matter though; the problem with poor people in the United States is that they eat too much, not that they eat too little.&lt;p&gt;The only thing that might see price movement is housing.  That&amp;#x27;s definitely supply limited in many places.  But maybe UBI will encourage people to move from high cost areas where UBI isn&amp;#x27;t sufficient to live on to low cost areas where it is.   And movement will only happen in the margins -- most of the poor in the States already have a place to live, so demand shouldn&amp;#x27;t increase that much.</text></comment>
<story><title>Guaranteed Minimum What?</title><url>https://granolashotgun.com/2017/05/05/guaranteed-minimum-what/</url></story><parent_chain><item><author>chris_va</author><text>I realize that UBI is a very popular position on HN, so I am hoping someone here has given this more thought and can comment.&lt;p&gt;My problem with UBI is that all tests to date look great, but have only been done on a micro level. The fundamental issue I would like addressed is the macro scale inflation you would expect when redistributing trillions of dollars without commensurate economic value being created directly.&lt;p&gt;Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, etc).&lt;p&gt;If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined.&lt;p&gt;Anyway, it would be nice if it worked, but I&amp;#x27;ve seen no evidence that it will in a large system. Comments appreciated.</text></item></parent_chain><comment><author>drxzcl</author><text>Most western social democracies already have an overlapping network of benefit systems that are essentially a patchwork UBI in disguise. The system is designed not to go without food and shelter, but the exact mechanism varies depending on what population group you belong to. There&amp;#x27;s assistance for the temporary unemployed, for students, for people with disabilities, people with long-term illnesses, etc. There&amp;#x27;s pensions for those that have aged out of the workforce, there&amp;#x27;s assistance for children. And this is only scratching the surface. Even working people get a fixed basic tax deduction under most taxation systems.&lt;p&gt;I&amp;#x27;m not convinced that the sum total of all these benefits plus the current infrastructure that is needed to maintain, dispense and detect&amp;#x2F;punish abuse on them is significantly larger than the total expenditure on UBI.&lt;p&gt;Of course, all the people that you let go from the benefits departments initially will end up on UBI, so that&amp;#x27;s not really a big win. But eventually they will find employment elsewhere, hopefully.</text></comment>