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Comment by yummyfajitas | Hacker News Reader

A basic income doesn't necessitate increased consumption, only shifted consumption from the rich to the poor.

Did you read the article?

"A rich person, presented with a tax refund, will not necessarily increase his or her consumption. Instead he or she might well save the money...When the poor and lower middle class get cash in their pockets, they generally spend it straight away..."

If you think a basic income is going to have an adverse effect on savings/investment rates, there are plenty of ways to bump this up (sovereign wealth funds for example).

Please explain the mechanism by which this would work. Specifically, consumption of shoes and the number of people producing shoes goes up correspondingly. Some people quit working because their boss is a jerk. Where do the people building the new shoe factories come from?

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> Did you read the article?

Did you read my comment? There are ways around this. Worth noting also, that if poor and middle class folks have a higher and more reliable income, they are more likely to save.

> Please explain the mechanism by which this would work.

It's called supply and demand. Rich people will have less, so demand will drop for things like jewellery and superyachts, and labor will shift from these industries into stuff producing things like shoes.

I feel like you are making the complete opposite argument from the linked article: "We should have a BI because it will reduce consumption by the rich and increase savings by the poor, thereby increasing investment."

Is that a fair statement?

Also, given that you believe the rich and poor have equal propensity to spend, I assume you have no objection to Keynesian stimulus targeting the rich during times of recession?

I see you've given up on responding to my points so you're making up strawmen you think you can knock down instead.

I didn't claim that a BI will increase investment.

I didn't claim that believe the rich and poor have equal propensity to spend.

I said that if you want to increase investment (with or without a BI) there are plenty of ways to do that.

...only shifted consumption from the rich to the poor...

I didn't claim that believe the rich and poor have equal propensity to spend.

The former implies the latter.

I didn't claim that a BI will increase investment.

... if poor and middle class folks have a higher and more reliable income, they are more likely to save.

Now you seem to be agreeing with me that the article is wrong, and that a BI would increase real consumption and reduce real investment?

Could you state clearly what you think will happen to real (not nominal) consumption/investment under a BI and what the mechanism for that is?

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