The concern I have with this will be inflation. People now have money, sellers can now raise prices. Which eventually gets us right back to where we were. You can give them more money, but then you are accelerating the cycle.
Another example is the cost of additional real estate outside the city. Building costs in rural America are essentially linear with demand. There’s no shortage of land out there and basic income would allow people to live in such areas.
My point is that prices will rise and find their time dependent values, in a way that will diminish the purchasing power of those you'd be attempting to help. You give enough so they have some left over, and enterprising groups will realize that they can raise prices to reflect the larger purchasing power.
Economics 101 in this case.
[1] http://www.investopedia.com/financial-edge/0212/inflation-an...
[0] - http://www.in2013dollars.com/Milk/price-inflation [1] - https://ycharts.com/indicators/milk_price
Milk is subject to government price supports, including a mandate to purchase if market prices fall below a certain floor.
> My point is that prices will rise and find their time dependent values, in a way that will diminish the purchasing power of those you'd be attempting to help.
It's true to the extent that the long term effect of a fixed UBI will be less than you would expect based on prices at the time adopted and the inflation that net beneficiaries would experience without the UBI. This is mitigated if the UBI formula tends to grow in nominal terms (e.g., because it's tied to a revenue source which grows with the economy, or indexed to inflation) and, in any case, it requires unlikely assumptions about elasticity to have it not be a real net benefit to the nominal net beneficiaries.
Do you think that if everyone in that story got a $2k BI check that the huts they live in would continue to rent for $300? Doubtful - very doubtful.
UBI is likely, at best, a bandaid, and should not be isolated. Should be part of a broader scope of programs that help people jumpstart a move, training, etc.
That said, I do think we need it[1]. But it should be combined with other programs that help people (not redistributive programs per se, but things that help people do the things that they can't do or even consider doing now).
[1] I think we need it, as disruption will continue across industries, geos, and will impact people in very negative ways. So we need a way for them to help themselves while they consider options. If this means helping them get mobile and settled at a new location, help finding a job, and training, that could be tremendous if linked with UBI.
* roof over ones' head, no matter how shitty
* food, no matter how shitty
* minimum utilities
* booze, drugs
* other
the first 3 would capture everything just as they do now.
Enable them to mobile, independent of UBI. Enable them to get food, health care (real stuff, not the obamacare crap[1]), job training, child care (if needed), relocation and housing assistance. Don't hand them money for these things (apart from UBI), but help them with a health card that handles medical/dental/etc. Give them a "credit" card that they can use with a set of well scrutinized vendors for relo/housing. Etc.
[1] when my $dayjob-1 died, I had to sign my family up for obamacare. About the same amount I paid for my old good plan. Much higher deductibles, covered almost no meds, little hospitalization. The thing needs to be fixed, not repealed. Fixing it is going to be hard as it was designed to fail and be replaced with single payer. So there is that.
Just pumping more money in will fix nothing. What is needed is for some massive non-profit entity to step in and provide basic goods and services at a known price. This then fixes the floor of the economy rather than continually trying to chase the roof.
the US is already subsidizing foodstuffs to attempt to address the problem from the supply side. it seems politically untenable though to wire that up to the demand side directly without sending it through some for-profit machinery somewhere. its basically communism.
I suppose another way would be to issue restricted local currencies and non-transferable coupons or vouchers. That has the added benefit of creating a lot of paper-pushing bureaucracy jobs.
Isn't one of the main goals of BI to eliminate the "need" for bullshit jobs, though?
And it isn't always about the money, either. Sometimes the petits Napoleons just need to lord the tiny bit of power they have over those who don't even have that much.
My cynicism is bleeding through. The US government has a tendency to just throw money at a problem instead of actually doing something to solve it. Failing that, they throw on a half-assed patch that is only funded well enough to partially address the unintended consequences of the check-writing fix.
The only realistic way to keep BI out of the pockets of rent-seekers is to pay it as the basic necessities rather than as cash. Nobody will raise your rent from 20# of corn to 30# of corn, but they sure will raise it from $200 to $300. And the best way to do that is to hire people to produce the necessities directly. But congress is skittish about doing anything that looks too much like communism. Hence the vouchers. So they can control how things get done without actually doing anything.
The point is that sellers may attempt to partition markets to reduce competitive pressure, allowing each to increase their pricing without worrying about being undercut.