At some point, the inflation does become a problem. But notice how it hasn't yet? Take a look at Japan, which has printed an awful lot of money and yet inflation is still hard to come by.
We've been pumping new money into financial channels. A UBI would pump it into real channels.
That said, this article is about a municipal program. Cities don't print money. They transfer it from some groups to others.
Spain is experimenting with something not quite UBI [4] (but close enough for this comment I will refer to it as such), and their inflation rate is currently negative [5]. Something to follow.
EDIT: jcranmer said it better in a sibling comment ("To me, it seems a case of economists clinging to models that predict the opposite of reality, and it contributes to my general impression that economists prefer mathematical models even if their correlation to reality is poor.") [6].
[1] https://www.visualcapitalist.com/chart-the-downward-spiral-i...
[2] https://www.visualcapitalist.com/wp-content/uploads/2020/03/...
[3] https://voxeu.org/article/great-disinflation-emerging-and-de...
[4] https://www.nature.com/articles/d41586-020-01993-3
Since QE operations were not designed to produce inflation (and were arguably designed specifically to not produce consumer price inflation), this isn't exactly surprising. They did, however, affect prices of the assets the government bought up as predicted.
Suffice to say, there's a massive difference between monetary expansions in a time of deep recession - economic policy orthodoxy since Keynes - and the assumption that inflation isn't a thing in developed countries.
It's much the same as a startup can pay for stuff by emitting more equity: pay for the right stuff and the value of the company might actually rise and there are many examples of valuations leaping afterwards, but you can't just assume these examples and the infinite divisibility of the cap table means no startup needs to worry about dilution or impact on future valuations.
> Spain is experimenting with something not quite UBI [4] (but close enough for this comment I will refer to it as such), and their inflation rate is currently negative [5]. Something to follow.
Spain reforming its benefits system to create a new payout to 5% off its population to be funded by debt and taxes isn't remotely similar to Spain reforming its benefits system to pay its entire population newly printed money, so the fact the former has little immediately evident inflationary impact in the middle of Covid tells us very little about the latter.
I'm reminded of the Phillips curve which relates inflation and unemployment. If you graph these data points for the 1950s and the 1960s, you do get a great correlation. But extend the graph to the 1970s and the 1980s and the data instead looks a lot more like a random scatterplot. Yet the concept is important enough to be covered in Economics 101 textbooks. To me, it seems a case of economists clinging to models that predict the opposite of reality, and it contributes to my general impression that economists prefer mathematical models even if their correlation to reality is poor.
As for interpreting trends unwisely, isn't that what you're doing by noting a lack of inflation and arguing therefore that fundamentals don't matter. Common sense says if you give out more cash, people can bid up prices higher. There are undoubtedly variables not accounted for in all economic models. As the statisticians say, "all models are wrong". But those unknown variables can turn on you too. Every bubble consists of people ignoring fundamentals because they don't fit the recent curve, then getting burned when it crashes.