It's no problem because supply can adjust to compensate - the exception to this is land, which is why a UBI ought to be funded with a land value tax. This is why Yang's UBI isn't very good, because it is sales tax funded (he's too much of a centrist to tackle land and capital, touching either of these things upsets rich people's delicate feelings too much).
An underdiscussed advantage of UBI is that it's good even for those that don't get more out of it overall than they put in, because it spreads income out more evenly over the whole lifecycle (people generally have not enough money early in their careers and during child-bearing, and too much during later life and death).
The ideal scenario in my mind is a property tax, of some kind, that funds a UBI for children. Ideally, this would be at the federal level, but unfortunately property taxes have been deemed unconstitutional. This is likely true for wealth taxes as well.
But there is nothing to prevent states and cities for instituting a property tax -> UBI setup. It would no doubt help greatly with the problem of "buy properties and do nothing with them" aspect of rich foreign investors in some regions.
One of the things that Yang seems focused on is stuff that can actually be done. A wealth tax sounds nice, and he agrees with the spirit, but that is simply not a federal level option at this time. A constitutional amendment would be great to fix this, but that takes a long time and would require people to get out of survival mode to make this happen.
So Yang takes the practical approach of getting money in the hands of everyone now using a tax scheme that seems to be inoffensive to wealthy people. It probably is not, but the only way to really know is to do it.
As for the children, I am hoping this is also just a pragmatic thing. While it is hard to get this country to accept giving free money to other adults, it is even harder to imagine this country supporting giving money to "those people" with "lots of children". This is why schools are funded locally and why a UBI for children would need to be locally funded as well for now, particularly if the desire, as mine is, is to use land taxes.
Excluding others from a valuable natural resource is deeply immoral unless compensation to those excluded is paid.
The difficulty(or not) of measuring the "true value" of that compensation isn't a justifiable reason that we should as close to it as is reasonably possible.
Housing isn't expensive because of the cost of labor/materials, for example. It's expensive because the government literally says "you can't build that here". So the 100 old parcels of land where you want to live have 1000 people bidding for them.
UBI maybe on paper would cause additional inflation in that scenario. But it might also be the catalyst that allows people to move elsewhere for work, such as to a low cost of living area, because UBI can be relied on to survive.
The total legal occupancy of SF is smaller than the number of people who want to live there. The city delays the issuance of permits for expanding occupancy.
The bay area is rich and the rents follow suit. They are still limited to the overall supply of money in the area. Obviously increasing supply of real estate would help the issue of course.
Ask any Native American how empowering a UBI-esque system worked out for them.
Not that I’m rejecting the idea of UBI out of hand, but I’m very concerned about the lack of such discussion.
https://thecorrespondent.com/4664/why-do-the-poor-make-such-...
Also, would you stop working if you got 12k a year for free? How much do the wealthy make in dividends a year? Do they stop working? Maybe to ensure that the wealthy continue to work, we should prevent any kind of returns on capital investment. Maybe people should only make money through their labor?
But seriously, who wants to do nothing all day long? The UBI money takes away stresses and maybe some will stop working for a boss, but they will find other things to do with their time and, if it is valuable to others, they will profit from it and do it more. So it goes.
As someone having participated in a support group for people excessively using online/digital media: It might not be a very satisfying life, but it's seems easier than ever to distract yourself while unproductively wasting your time.
For some of those individuals, this was about not wasting their limited time outside work. But a significant share had their lives entirely supported by e.g. gov or parents. And external factors in many cases caused the necessity to change.
I agree with society ensuring people can have their basic needs met. But why does it have to be an unconditional monthly check? Beside strong support offers in areas like psychological, guidance or life advice, I'd prefer the right to trade X hours per week (preferably more like 20ish than the current 40) to your gov to get what you need to live.
It would act as a minimum wage. It would incentivize finding something better, especially if not satisfied with the work assigned by gov to you. It would still guide those living on autopilot towards something at least somewhat productive. And yeah, it would be tricky to implement well :/
I often wonder how many people feel this.
I don't feel quite as dire about it, but I absolutely agree that my best contributions to society will be those I initiate and see to fruition on my own accord. Unfortunately, I too have many ideas, yet so little time to work on them.
It's too risky to quit work and embark on my own, so I only get 1/10th of my vision done during the evening and weekend hours I can spare. And even then I'm burning the last remaining cycles of effort I have during the day. It's a slow, painful slog. But I am making progress.
If I were in the flip side position of being a CEO with a product vision and lots of workers to see my ideas through to fruition, how many of my employees would be stuck in the same trough of apparent underutilization and under-fulfillment? If I empowered them to follow their own path and dreams, wouldn't they quit and leave me with nobody to work on my vision?
If you get rid of the perhaps boring and mundane "keeping the lights on" jobs, which are ever so important, then the product dies.
This is a hard problem.
This is pretty much the essence I was getting at and what the goal is to solve
Anecdotally, having grown up in and around various tribal communities, people will consistently replace work as a source of purpose with some other purpose of their own devising. Unfortunately, most of the time people will choose a purpose that is socially destructive in the absence of a default purpose that is socially beneficial. A consideration for designing a constructive UBI system is institutionalizing new sources of socially beneficial purpose that can be easily adopted by people that lose work as a purpose. Insufficient thought is put into this latter problem, I have seen little evidence that this will happen organically.
Wow this is fundamental misunderstanding of what inflation is.
> Economists generally believe that very high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. Views on which factors determine low to moderate rates of inflation are more varied.
The freedom dividend can cause low to moderate inflation, if the extra tax is high enough to cause recession. But the only path to hyperinflation is government printing more money.
For example, imagine a government subsidy for smartphones that gives up to 2k for any phone you buy. The predictable effect of that is all phones would be at least 2k because there is no downside to the customers paying 2k. It would probably be 2k + pre-subsidy prices for many phones, particularly the high priced ones.
But if you just give everyone 2k in money, then why would they all want to spend it on smartphones? Maybe the price goes up a bit since there is more flexibility in spending, but there is not a specific pressure on that category alone. It gets spread out to the entire field of the economy including savings and investments.
Competition is still in place. The amount of the UBI also matters, of course. If everyone got a million dollars, a 1k phone would be a trivial price and could easily be raised in price dramatically. Basically, the spreading across the people would no longer dissipate the upward price pressure effectively. Targeting the level at basic poverty level seems like a reasonable first step to try to end poverty without spiking the prices.
As for healthcare in our current system, this might also address a lot of it. There is, of course, the removal of survival stress conditions and food deserts (by making poor regions not poor) which improves the health of people directly. But the UBI is also money that can be used for both insurance premiums and the max out of pocket levels. Much of the currently uninsured are not the desperate poor (Medicaid covers most of them), but are people in either states that did not expand Medicaid and are too poor to qualify for Obamacare subsidies or are just above the cutoffs and can't afford the full premiums. While directly changing how the subsidies work could fix that, the UBI is another approach that avoids a healthcare legislative debacle. For reference, in my state, an individual without subsidy can get health insurance for somewhere between 3-4k a year.
The other aspect of healthcare costs for consumers is the deductible/out-of-pocket. At least for the plans I see, 6kish is the max for out of pocket costs and that is half the proposed UBI. So this would seem to greatly solve the health insurance problem for US citizens. In summary, someone who needed the UBI for both premiums and out of pocket would be entirely covered with maybe 1-2k left over. Not ideal, but this is a worst case scenario.
Most UBI advocates, including Yang, do not believe that a UBI alone fixes the healthcare industry mess, but I believe it does help plug in the holes in a way that can avoid the healthcare debate dysfunction in our politics.
In the long run UBI promotes innovation and competition. Therefore those industries with competition would not suffer from rampant inflation.
Businesses without competition (monopolies) would on the other hand experience huge inflation simply because there is no pressure to keep the price down. This would be the case of natural monopolies (eg. banks or networks such as telecommunication, railroads, water systems) and government guaranteed monopolies (pharma, US healthcare, various overregulated industries).
If Indian reservations in the USA are any indication, it clearly doesn’t.
Many of these tribal UBI systems have been in place for decades, so they are a good laboratory for studying the effects of UBI on population behavior.
Isn't an analogous situation that of private loans for tuition? Tuitions have risen across the board to eat up all the new "free" money in the system.
Won't UBI make goods much more expensive for everyone and also increase our taxes? Wouldn't a better expenditure be providing healthcare?
I'm earnestly curious.