So is this basically "pure" communism? I guess historically, countries we called communistic didn't really adhere to its central idea; or they couldn't do so practically due to the accompanied political/economic instability following regime change.
If it happens, I hope they do both, since the location adjustments will be even more rapid than the generic inflation adjustments, and it is possible that hyperinflation would just destroy the highest cost cities, rather than the entire US, before the program is scrapped.
Looks like you've identified the end game.
It seems like the political discource in the US has led to the loss of all meaning behind terms like communism.