Of course but you could give people some free money nevertheless and it would make the world a better place.
What do you think would happen if you gave 1000 dollars to each person in America every month? I think a lot of good would come from that and not much bad.
A UBI doesn’t necessarily result in inflation. The later is a combination of monetary policy and expectations. UBIs can be paid by means other than printing money.
The thing is, inflation caused by printing money AND distributing it directly and every to all people is fine… it’s just the most efficient / progressive wealth tax!
Even if (printing and then) giving everybody $40K/yr caused, say, 40% inflation, anybody making under $100K/year would be better off. You actually wouldn’t need any taxes if the government just printed all money it needed, hopefully most of which is in the form of direct checks to all residents/citizens.
>it’s just the most efficient / progressive wealth tax!
no, it's not a wealth tax. it's a cash tax. if you printed money and caused 100% inflation, that'll just cause every scarce asset (eg. houses, stocks, gold) to double in price. Since the rich hold most of their wealth in assets, not cash, I doubt it will be fair or progressive.
> Stocks aren't scarce assets. They're infinitely dividable, so the price per share going up doesn't cause them to be harder to buy.
That doesn't make any sense. Stocks ultimately represent ownership in an enterprise that consists of people, equipment, and intellectual property. Those are scarce. Just because the ownership units is infinitely divisible, doesn't mean they aren't scarce. If people only bought stocks so they could hang a fancy certificate on their wall, you'd be right. But people don't do that, they buy stocks to get dibs on a certain fraction of future production. That's the scarce part.
>Houses aren't really either, it's the land that is. Thanks Henry George.
1. seems like a nitpick? When people talk buying "houses", they generally talk about buying the combo of house + land it sits on.
2. houses are still scarce[1]. we can't will infinite houses into existence. they're more plentiful than original picasso paintings, but that doesn't make them not scarce (at least according to the economic definition).
Well, the other reason stocks aren't scarce is that the company can print new ones. You'd expect this to reduce valuation and therefore have shareholders oppose it, but in practice that doesn't seem to happen lately.
> If people only bought stocks so they could hang a fancy certificate on their wall, you'd be right.
This is highly underrated as a reason. What's the fundamental improvement in Gamestop and Tesla causing their stock price to go up this year?
> 1. seems like a nitpick? When people talk buying "houses", they generally talk about buying the combo of house + land it sits on.
Many people don't seem to understand how to separate them, leading to beliefs like "luxury apartments cost more because they have granite countertops" and "gentrification can be prevented by not building new buildings". You can't build houses forever, but you sure can build many more of them than the US does right now.
> Well, the other reason stocks aren't scarce is that the company can print new ones. You'd expect this to reduce valuation and therefore have shareholders oppose it, but in practice that doesn't seem to happen lately.
If you're doing this in an above-board way, it's still scarce, because the whole reason why companies even issue new shares is to raise capital. When you're doing that, you're trading one scarce resource (capital) for shares, which means that the shares are also scarce. You can make an infinite amount of TVs given infinite raw materials, but TVs are still scarce.
>This is highly underrated as a reason. What's the fundamental improvement in Gamestop and Tesla causing their stock price to go up this year?
Any evidence that people bought exactly one share TSLA/GME just so they could hang on their wall and/or feel smug about it? In both cases it's far more likely they bought into it because of expectation of future profits (from greater fools or actual operating profits).
>Many people don't seem to understand how to separate them, leading to beliefs like "luxury apartments cost more because they have granite countertops" and "gentrification can be prevented by not building new buildings". You can't build houses forever, but you sure can build many more of them than the US does right now.
While there might certainly be people who think the housing crisis is caused by "developers only building luxury condos" or whatever, I doubt this is a popular view on HN. Any time a housing-related thread shows up on HN, that explanation almost never shows up, and the NIMBY/zoning explanation almost always does. I'm sure a decade+ member like yourself can see this. Therefore I don't really see much point in arguing this distinction, because you'd be preaching to the choir.
Except IF the money is being printed to be distributed to everybody, there’s going to be more money in the hands of people who can’t afford picassos and Malibu real estate, and less going to those who can, so I would expect in that scenario the increase in price of those assets would likely have a hard time keeping up with inflation.
The taxes are what gives the official currency its value. If you didn't have to pay sales tax in USD for every transaction, it would be equally or more convenient to pay in other currencies, but this keeps it all in USD.
I think it might be hard to bootstrap this system without tax maybe, but the usd is pretty well established now and I bet they could make the switch and people would keep using it!
Prices only go up if the demand approaches or exceeds supply. If there is capacity in the system all is good, more jobs. This is how Franklin D. Roosevelt brought an end to the Great Depression.
If the economy is running at capacity and you wanted a UBI taxes would have to increase to prevent inflation. This would end up being wealth redistribution.
Only if there’s a bread cartel. Otherwise it’ll sell at a much lower equilibrium price, as anyone who can undercut him will take all his sales while still profiting (as marginal cost of additional bread production is well below $1000).
> I think a lot of good would come from that and not much bad.
Here something that'd happen - the homeless in encampments would get hoovered up by slumlords who put them in squalor and consume their $1k checks. Poor people would have more children because each child = $1k/mo, even if they have to wait 18 years. Abduction would be easy - the ransom pays itself over time. Fraud would be rampant. The ultra poor underclass who are undocumented would still get nothing, further exacerbating the divide.
“ Abduction would be easy - the ransom pays itself over time. Fraud would be rampant.”
Do we have any evidence that abduction and fraud is rampant in countries in Western Europe, known for the very generous social programs? Are they exploding with poor people having kids??? Is it dangerous to live in, idk, Sweden because someone is gonna kidnap you for your social bux? I’m genuinely asking because the notion of rampant abducting and child having hasn’t happened in countries I know of with very generous social programs.
The USA actually does have laws against creating anything that might be interpreted as competing with the official currency. This is the most likely avenue for violence to come in, as people try to resist devalued money by using substitutes.
There are generally no laws in the USA against creating and using alternative currencies. I can buy and sell using Euros or Monopoly money or whatever if I can find a willing counterparty. However, if those transactions are taxable then I have to report them at the US Dollar fair market value equivalent and pay any taxes due in US Dollars. And if someone owes me a debt I am required to accept US Dollars for settlement.
> There are generally no laws in the USA against creating and using alternative currencies.
This is not correct. If you try minting coins, you can be shut down. You can buy and sell using whatever you want, yes. There aren't laws against using alternative currencies. But there very much are laws against creating them.
If you don't intend to be hyperinflationary, the printing of money has to be associated with the acquisition of value or the assumption of debt. The debt is repaid through taxation.
Grandparent comment is referring to the position that taxes are extracted via threat of force. This is an extremely emotionally fraught position, and it's difficult to discuss rationally.
So, the reasoning goes, if you have to tax to print money, it is done by resort to force or threat thereof.
So to paraphrase, "Printing money is inflationary, which I believe is bad, and I believe the only way to rectify that is through taxation (violence)." That means you are the one who is proposing violence, not the commenter suggesting that we print money. They never said anything about taxation.
I would argue it is taken from people (yes with violence if needed) in exchange for goods and services provided, part of an implicit contract you are forced to make when you are a citizen.
I'm in favour of UBI, but note that it'd require extremely strict immigration policy as well as good enforcement of it, which is generally something the left very much dislikes.
As already seen with covid aid, people wouldn't work in low wage jobs any more. This would lead to inflation or disappearance of some amenities. E.g. you might have to put your groceries into your bag yourself, or might have to pay a dollar extra for that service. This isn't something negative though, just a neutral change I guess.
It would help a lot of poor and suffering people, but note that even in countries with good unemployment benefits, homeless people still exist.
> I'm in favour of UBI, but note that it'd require extremely strict immigration policy as well as good enforcement of it
What do you mean by “strict” and why is this inaginee5 to be necessary? Note that UBI is usually envisioned with a defined population but the absence of means or behavior testing within that population, either “citizens” or “citizens and LPRs” or “citizens and aliens with work authorization” or “citizens and aliens with satisfactory immigration status in a specific set of visa categories based on basis and duration” would all be valid populations, with wildly different impacts on the viability of UBI with any given immigration policy.
> I'm in favour of UBI, but note that it'd require extremely strict immigration policy as well as good enforcement of it,
COVID aid isn't like UBI, critically, key parts of it (enhanced unemployment) are conditioned on absence of work or reduction of it below pre-benefits levels, and thus forces people to choose between benefits and work. This is the kind of incentive with means tested benefits that UBI is intended to fix.
To your first point, regardless of which class of people you consider for UBI inclusion, even if you only consider citizens of the USA, it will have a tremendously attractive effect for billions of people around the globe. Even now quite many people want to immigrate in to the USA and the USA has multiple systems designed to keep them out, but UBI will make this way worse, which is why I said that enforcement needs to be very strict.
Plus I'd say it would be even more unfair for the undocumented immigrants than it is now because they would not get any UBI. But if you gave UBI to the undocumented, way more people would attempt to become undocumented immigrants, by overstaying their visas, etc. Which then probably will lead to you having to issue less short term visas, or actually deporting undocumented immigrants.
COVID aid was designed to discourage (some kinds of) work because we literally didn't want people to (do that kind of) work; that being the point of closing the stores. It was more like disaster relief than anything else.
It also didn't create new money insofar as it was used to pay existing debts like rent; what it did was avoid a financial crisis.
Other kind of aid designs don't do this very much; demand is infinite and won't go away if you give people some money.
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