Over time I would imagine that due to inflation and the increased cashflow that everyone will have the prices of basic necessities will increase to the point that UBI just covers them, or worse that simply living will require UBI + a job?
I don't mean that in a snarky tone, it's something I'm trying to wrap my head around as far as UBI discussion goes.
Money is created by central banks, circulated by the government (including with 'entitlement programs' like UBI would count as, but also through things like spending billions on fancy jet fighters) and other banks (and there multiplied by fractional reserve banking).
It's then 'destroyed' by taxes and encouraging people to buy into government bonds and other things that slow down the flow of money.
These are all policy instruments that control how much money is flowing through the economy, and inflation is a product of that flow.
So the answer is, because they would raise taxes on it. A large portion of the money given out would just go straight into taxes from high income earners also getting UBI.
But also they could do things like lower the reserve ratio banks are required to hold to reduce the flow of money into the economy, instead choosing to create money through people instead of banks.
I'm curious what the other 95% are going to do.
They'd probably do it regardless of UBI, but without UBI they do it and are slightly more angry or frustrated at their own situation.
Real inflation does not require an expansion in money supply because inflation is not flat across all areas of the economy.
You can see the same effect when luxury housing goes up in a town. Rents go down for everyone.