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Comment by ekianjo | Hacker News Reader

> The increased cost for extending that type of benefit to everyone, while removing the bureaucracy of maintaining the existing programs (eligibility compliance and case workers, etc.), is actually not as dramatic as it first seems.

You are missing one part, though. If you start giving cash for everyone, it's very likely this will result in raising prices for all commodities. And there you go for a another downward spiral, where you have to readjust the basic income every couple of years to make up for the inflated prices.

Ever heard of minimum wage? Yeah, that one did not work as expected either (and created massive unemployment when the threshold was set too high as well).

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> it's very likely this will result in raising prices for all commodities.

Why is that? There wouldn't be any more money in circulation. It's not like a state would print money to supply basic income. It would have to be tax funded, so most likely other public spending would have to be reduced, and taxes would be increased.

If the basic income represents a progressive transfer from high-income to low-income (most likely) then you will see an income in spending simply due to the fact that high-income earners would probably save/invest the last $1000 rather than spending it on essentials such as food, but if the same money was distributed it is more likely to be spent. This is normally considered a good thing, (one of the most positive aspects of a progressive tax system).

> Why is that?

Because the market adjust prices based on an equilibrium between what people usually earn and how much they are willing to spend. If you increase the money supply (not talking about nation-wide, but individual base) then there is nothing preventing manufacturers from raising their prices up and take advantage of it, while still being fair ("after all, everyone has minimum income now so they should be able to afford it anyway").

Unless, you know, you have to fix the prices of commodities. And then, penuries and shortages occur. History likes to rhyme.

Pricing is decided mostly by supply and demand not by will. Your rent doesnt increase when you get a payraise and your landlord finds out about it.

Food is a very competitive industry, and unless you are suggesting that to keep it balanced we need some people to not eat, its unlikely that people spending more money on food will raise food prices to a point where it is unattainable.

I dont get this "prices go up" argument at all, is there a name to it? (dont say its inflation because that is related to money supply, not market supply/demand)

Yes, it's called demand. And inflation is an example of it, you increase the money supply, then there are more dollars chasing a given commodity-- more demand for that commodity per dollar, or looked at the other way, more supply of dollars relate to that commodity.

If we paid for this basic income via inflation -- increasing the money supply-- the result is that, for instance, food would go up. Not so much that it is "unattainable" as you point out, but it will go up a bit more than the net effect of the basic income, wiping it out, plus a bit more due to inefficiencies that always happen when you try to distort the market.

>If we paid for this basic income via inflation -- increasing the money supply

No one here is arguing that a basic income should be paid for through inflation.

There is a difference between inflation and income redistribution.

>but it will go up a bit more than the net effect of the basic income, wiping it out

Yes, if we paid for it by inflation, but the argument is to pay for through some kind of income/wealth redistribution. Food should have basically the same effect, and you'll note that they haven't driven up the price of food a bit more than their net effect.

Currently the government is spending via inflation far more than it takes in from taxes. So, if you want to add $3.6Trillion to the budget-- more than doubling it-- in order to give everyone in the USA $12k a year, it's going to have to come from somewhere.... and I don't think you can get that much by raising taxes. Since income from taxes is around $1.4T [1] you're talking about more than tripling those taxes.

For many people who are on a lower income that alone will wipe out much of the improvement from basic income.

And for people who have a lot more money, tripling income taxes will produce all kinds of consequences that lead to reduced tax income. (Laffer curve and all that.)

For instance, I would simply move to another country, form a corporation there, and earn all my income thru that corporation. And I'm not even rich, but I'm currently giving up %20 of my income-- you start taking %60 and I consider that slavery.

So, whether you intend to or not, you're talking about inflation... because you can't pass something like that size of a tax increase.

[1] https://en.wikipedia.org/wiki/United_States_federal_budget#/...

Edit- I see you edited. Yes, food stamps have driven up the price of food, this is one of the things that's making it hard for people to make ends meet-- food is too expensive, and even for poor people their taxes are too high, not just income but all the built in taxes that show up in the price of food, etc, because the companies have to pay taxes, they have to pay their employees more so their employees can pay taxes, etc.

Raising taxes raises prices too, because it raises costs for everybody.

Price increases come from many factors, including supply vs demand, but also cost of production. And all income and corporate taxes, as well as burdensome regulations, increase the cost of production.

>For many people who are on a lower income that alone will wipe out much of the improvement from basic income.

Every argument I've ever seen for a basic income calls for a tax curve so that you pay zero taxes and get $12k a year if you make no income. Then you pay more the higher you go up to a break even point somewhere around the median income of $55k.

> So, if you want to add $3.6Trillion to the budget

Again it's not going to be anywhere near that. Because of the tax curve, less than half of the country will get any extra money, and only a fairly small fraction would get the whole amount.

Then you have to take into consideration the programs it will replace--social security is almost a trillion a year by itself. Food stamps, cash aid, housing assistance and other programs to help the poor (not including medicaid) are another $500 billion. All of those programs would unnecessary.

You're not going to need to do anything close to tripling taxes.

>For instance, I would simply move to another country, form a corporation there, and earn all my income thru that corporation.

Again this won't triple your income tax. But ignoring that, what you're suggesting is not an option most people have. Also you can only exclude about $100k or so in foreign earned income, and if you want to renounce your citizenship, you have to pay the exit tax.

>Laffer curve and all that.

Yes, but you can find studies that put the optimal taxation rate anywhere from 35% all the way up to 75%.

> Yes, food stamps have driven up the price of food

You're argument wasn't that a basic income would drive up the cost of food, but that it would drive up the cost to the point that it would wipe out the effect of the basic income. If that logic was true, that giving cash payments to lower income people would drive up prices to the point that it had no net effect, then food stamps should have done the same--they have demonstrably not done so.

>No one here is arguing that a basic income should be paid for through inflation.

Actually, I kind of am!

I suggest that we absurdly just give $1MM to everyone and ask what would happen to prices. They'd skyrocket of course. But what else would happen?

Consider an economy with just 2 people. One with a net worth of $7500 and the other with $10MM. Give them each $1MM. What happens to their wealth relative to each other? The less the first guy has, the more it does for him. (Even if its done simply by "printing money".)

"Give everyone a million bucks" doesn't seem so outrageous to me after all. Sounds like swinging a giant scythe at inequality if you ask me.

Its like a fine work of un-dodge-able flat tax and a social safety net all in one. This is why I like UBI.

The problem is that the $10MM likely isn't held in cash, it would be held in primarily assets like stocks that are resistant to inflation.

there is nothing preventing manufacturers from raising their prices up and take advantage of it, while still being fair

Yes, there is: Competition.

Bread is now $1 a loaf. If everyone starts selling bread at $2 a loaf, and I can keep it at $1, I'll be making bank.

Sure, for $0.01 to $0.02, that doesn't count. But UBI is not a lot of money; $1k / month, without any other welfare programs. It's not like everyone wins the lottery.

The competition will not need to undercut to make bank... there is increased demand relative to supply, causing prices to rise, and the competition will like the higher prices as well.

If premium breadco sells for $2.10 a loaf now and generic bread for $1.89, then possibly the new equilibrium will result in prices of $3.10 and $2.89. There's competition... but the new price has gone up.

If generic bread kept its old price the demand would be so high that they couldn't supply it--- AND their costs are going to go up as well so they wouldn't be able to keep their old price anyway.

We've seen this over and over as the government has inflated the dollar over the years.

In fact, I think the argument could be made that the entire lack of recovery in the past 8 years is due to the level of inflation wiping out and gains from winding down the housing bubble.

On some products, there may be increased demand, but the idea is that the basic income should be small enough that those products are very essential (basic food, housing, ...). We would have to assume that people eat both before and after BI reform.

From my perspective (inside an expansive welfare state) the idea of basic income is a simplification rather than an expansion of the welfare state. The de-facto minimum income in Sweden today is probably higher than the would-be unconditional basic income. Today, the "minimum income" in Sweden is earned by people on minimum pensions, or those who have been unemployed longer than the unemployment benefits last. The income they actually receive is a very complicated combination of at least four or five different programs (social assistance, minimum pensions, disability, unemployment benefits, housing support, government child support, ...). The total for a single parent is around what a full time US (federal) minimum wage job pays, and I don't even want to think about what the administration overhead cost is on that.

Although I really like the idea of minimum income, elkanjos point has to be addressed. Just yesterday there was an article about trailer parks ownership. They will simply increase rent to what their clientele can afford.

In the end you'll still be filling the deep pockets.

Perhaps instead of providing minimum income or in addition to minimum income government should just compete in basic needs market. I.e. government provided low income housing with capped rent.

The lack of competition that allowed the trailer park owners to do that was caused by local government restrictions on building new trailer parks. Local governments artificially restricting the supply of affordable housing isn't necessarily going to be fixed by a basic income.

However, in a normal market increased demand will drive up the price, and developers will move in to build more housing. The increase in supply will then drive down prices until they reach an equilibrium.

> They will simply increase rent to what their clientele can afford

I may be crazy but wouldn't one of the ideas of basic income be that, for example, more people would afford to not live in freaking trailer parks? Depending on how it was funded, there should be less demand for large houses and more demand for small houses and apartments, meaning more such housing should be built (thereby reducing the demand for trailer parks).

If anything it would increase the demand for trailer parks. The average rent of a trailer now if I read that article right is $400-$500, that's already half of your basic income. The income of someone who lives there is also around $1000/mo, so the only thing that would change is that there'd be more of them, so demand would increase and the rent would go up.

I can't tell you why trailer parks are a thing in the U.S. In The Netherlands poor people simply live in apartment complexes. Though those are equally depressing. I can't remember ever seeing a serious apartment complex in the U.S. though. Only downtown with rich people in them. Perhaps I'm biased and have only seen richer parts.

Yeah, there are plenty of apartment complexes for lower income people.

Trailer parks are a thing mostly because they allow for more privacy than an apartment--no upstairs neighbors.

The vast majority of low income people in the US do live in apartment complexes. There are apartments in almost every town in the US, except for the most wealthy or the most rural places.

Trailer parks are just a picturesque (for lack of a better term) stereotype. Apartment complexes are so ordinary that discussing them isn't interesting.

Do you think on $1,000 month people are getting out of the trailer parks? There aren't a lot of $500 a month apartments out there-- and if there are, they will disappear quick as everyone can now more easily afford them, so prices will go up.

IT's not like prices would go up only on trailer parks.

Yes, the people who currently work, but live in trailer parks, would likely be lifted out of poverty and the necessity to live in a trailer park by an additional $1000/month per adult in the household. Would it lift all of the families in trailer parks out of poverty? Of course not. But, it would be a reasonably impressive start on the problem.

It's also worth recognizing the other impacts of a basic income. People who are currently trapped in their jobs and locations would find themselves with the ability to relocate for better opportunities or lower housing costs. The more money you have, the less of the poverty traps you fall prey to on a daily basis. So, remove the check cashing scams, the expensive credit scams, the rent-to-own scams, etc. from the lives of a huge swath of the population and you free a lot of them from being stuck in poverty. There's reasonably good research on this from various studies and pilot projects that simply give money to poor people and watched the results.

More money won't cure the problems of trailer parks and slumlords but it will give more people more options. And more options means competitive pressure begins to be effective. Markets work when people have options. Right now, the very poorest people in our communities have no options, and thus have no way to vote with their dollars.

"Although I really like the idea of minimum income, elkanjos point has to be addressed. Just yesterday there was an article about trailer parks ownership. They will simply increase rent to what their clientele can afford."

Actually, I think that's one of the arguments for a basic income. It will lift some of those people out of the class that is subject to the whims of slumlords and trailer park owners, decreasing demand for the lowest tier of housing.

And, there are many other reasons for the trailer park situation being what it is (I lived in a trailer park for a little over a year in my motorhome before moving back into a fixed house; I'm actually more familiar with that world than most folks, certainly moreso than most folks on HN). The article you've mentioned even covered a lot of them. There is a poverty trap in the US, and once you're in it, there are a lot of factors that work to keep you in it. A basic income would lift a large number of working class people out of it.

I do think there needs to be conversations, both nationally and at the municipal level, about real property and the rent economy, particularly in major cities. Things are currently highly skewed (possibly dangerously skewed) in favor of capital owners, such that in many major cities, even people who still have decent jobs may have trouble affording home ownership or event renting.

Why don't we just cut taxes for everyone who makes less than $50k a year? Cut them to zero for all of those people. At least federal taxes, but it would be nice if there was a moratorium or movement to do it for state taxes as well.

For someone making $50k a year, right now they are paying around $7.5k in federal taxes. That right there is close to the $12k the Basic Income would provide.

And this would be a lot easier and simple bill and thus hopefully less contentious-- just make the minimum exemption $50k. Could even be one line maybe.

I think this would be much more effective.... and I don't think that the basic income will replace all the other bureaucracy etc.

For instance, the welfare programs primary job is to hand out money, and it costs them $75 in administrative overhead to hand out $25! Do you think a new federal bureaucracy is going to be more efficient? IT might be a bit in the early years, but of course these things grow as people need to build fiefdoms for themselves etc. etc.

And can you imagine the howls from the federal employees unions if you try and get rid of the Welfare and other federal programs to be replaced with Basic income?

If you don't get rid of them then basic income is just going on top of them.

And if you don't eliminate taxes for poor people, then they're going to end up paying higher taxes too to pay for basic income.

That's the absurd thing right now-- people working part time and getting welfare are still paying taxes.

Since welfare loses %75 of those taxes, it would be much more efficient to just let them keep the money in the first place!

Eliminate taxes on everyone making $50k or less and you have a program I can get behind. Give that 5 years and see if we still need to think about Basic Income.

You can't buy food with a piece of paper saying how much you didn't have to pay in taxes.

OMG, at this ant the other responses. Because you didn't have to pay it in taxes, you can buy food with the pieces of paper you... didn't pay in taxes!

Ok, I'm out. I think you guys don't care about the poor at all, you reject economics out of hand and are just pursuing an ideology. Good luck with that.

Its often helpful to start from where we are, and change things a little. That is more comfortable notion, if nothing else.

But when the system is patently not helping those it needs to help, perhaps a new system is desirable. Most government programs were new systems once. Replacing them should not be any more disruptive than inventing them in the first place.

Basic Income is superior to all the others, in my opinion, because it is trivial to see that it will help the most desperate, and it can be administrated trivially (send everybody a check). There's something wonderfully egalitarian about that. The patronizing approach hasn't worked so well; lets try trusting people with their own lives this time.

> Why don't we just cut taxes for everyone who makes less than $50k a year? Cut them to zero for all of those people.

If you are referring to federal income taxes, specifically, that's actually an increase for many of those people. (Because of refundable credits, particularly EITC.)

> For someone making $50k a year, right now they are paying around $7.5k in federal taxes.

Please show your work here.

> For instance, the welfare programs primary job is to hand out money, and it costs them $75 in administrative overhead to hand out $25! Do you think a new federal bureaucracy is going to be more efficient?

No, the primary function of welfare administration is to prevent the wrong people from getting money, not handing out money. Handing out money is easy, doing the work to apply the conditional criteria which determine who is not entitled to money, and who, of those entitled to money, is entitled to less than the maximum benefit and how much less is the costly part. Which is exactly the function that UBI eliminates.

(You could do UBI through the tax system as a universal, refundable credit; except for the first year, having it be trailing this way is the same, in effect, as providing it up front.)

> And if you don't eliminate taxes for poor people, then they're going to end up paying higher taxes too to pay for basic income.

Not necessarily. You can raise taxes on one subset of the income spectrum without either raising or eliminating it elsewhere (for instance, you could raise the rate at the top tax bracket, add another bracket on top of that at a still higher rate, and eliminate the favorable tax treatment of capital gains versus other income, without raising taxes on the poor.)

"Ever heard of minimum wage? Yeah, that one did not work as expected either (and created massive unemployment when the threshold was set too high as well)."

Citation needed. Your assertions do not match my understanding of the facts about the result of the minimum wage. (Though I would have agreed with you ten years ago, a better understanding of it has altered my opinion significantly.)

Or perhaps you read a bunch of pretty words that seem to make sense? They got citations and proper syllogisms and all that jazz. Communist rhetoric always makes sense. It makes sense to your feelings, at least.

Don't equate communism with a minimum wage, that's just intellectually dishonest.

Same rhetoric used by the same people. liberty, equality, fraternity and all that jazz. You just don't know human nature. Especially the low part of its spectrum.

You should not need a citation for anything here. Look at what unions do in general when they get powerful enough in a specific company - they enforce high salaries, protect jobs and protest against any reduction of personnel, making it very expensive for the management to keep the current staff, and very hesitant to hire more (increased costs vs fixed returns, and lack of flexibility to adjust the workforce vs the ups and downs of the company's economic activity).

There's enough case studies out there about the pernicious effects of such policies - they should serve as a warning that you don't solve ANY economic issue with a single bullet.

Are you a troll? Besides the sentence "you should not neer a citation" should never be uttered, you deflect criticism on an unfounded argument with another unfounded argument. Tour first comment was unduly down voted but this one is just blabber.

When you raise the minimum wage, you don't change any of the other aspects of the business affected by it. So, say you have 15 employees making $10 an hour to keep your company afloat. (Just to keep things simple ,this is about the logic of it.) Now the minimum wage goes up to $15. What are you going to do? You would be losing money with a %50 increase in your costs. Most likely what you will do is lay off 5 employees (The weakest 5) and keep the remaining 10-- but now they have to do the work of 15. Remember the alternative is closing the business and they all lose their jobs. Plus if some don't like the workload there are many people who just got laid off (you laid off 5) who would happily take their jobs.

When you set a minimum wage- or engage in any kind of price fixing- you distort the market and historically that has always hurt the poorest people the most.

Looked at another way, minimum wage is the wage below which you will be unemployed rather than allowed to work.

A minimum wage is a penalty that keeps workers unemployed if they don't have sufficient marketable skills to overcome it.

Imagine if the minimum wage was $100 an hour. How many of us would be unemployed?

People seem to imagine that there's just a lot of money out there and the only reason that anyone might not have enough is that people are being greedy. This is zero sum theory, and it is not true in economics. It's nice to imagine that you're "foreign the rich people to give up the money they are hoarding"... but you're hitting businesses that are on the margins. What's the average margin for a business? IT's not the %50 that intel enjoys-- a grocery store maybe makes %3.

What do you think a business that is clearing %3 net is going to do when you increase labor costs by %50? (in this example.)

Edit: You can disagree with my position, or even find an error in my argument, but I'm tired of spending time explaining things and giving examples like this only to be downvoted for ideological reasons... constantly. Is a circle jerk what you really want HN to be? I don't think any rational person can say that my comment wasn't a quality explanation for the position.

I don't disagree with your argument.

On the other hand... Currently, employers that pay a less than living wage are subsidized in effect - the government (tax payers) makes up the difference in the form of food stamps, healthcare, etc. Is it right that businesses should get subsidized labor?

It's actually the other way around. These employers are basically subsidizing the social services. If the best job Jimmy can get pays minimum wage, then logically, if Jimmy couldn't even get that job, he wouldn't earn a living wage; he'd earn nothing. If Jimmy had the opportunity to earn a living wage, after all, he would go get the job that pays that living wage and quit Wal-Mart. But, since Wal-Mart is the best job Jimmy can get, the net effect of Jimmy earning minimum wage at Wal-Mart is that he costs the state less money in social services than he would with no job at all. Wal-Mart, therefore, is the one subsidizing the state and not the other way around.

I respectfully disagree with this line of thinking. The goal of a society is to eliminate as many people from needing government benefits as possible, and to ensure that only those who are truly unemployable receive government benefits. Employers must pay a wage which ensures that basic needs are met.

That's palpably not true. We all get roads, police, fire, regulated utilities. Absolutely nobody is trying to wean us from those.

It takes a change in thinking to accept the basic income. I'm afraid a generation will have to grow old and die before it gains traction, because of the ingrained thinking that 'full employment' is a good or useful societal goal.

You mean the generation that remembers what the USSR was like? I'm not being flippant, I'm being serious. The entire leftist political agenda, including Basic Income is basic marxism and the arguments for it are the same ones we had in over a century ago.

We've had a century of experimentation with it, from Fascism in germany ("to protect our farmers") to communism in Russia to socialism in the UK to all manner of variations in South America.

It hasn't worked.

Why is it leftists who are always going on as if they're the only ones who care about the poor, refuse to learn the lessons of history and economics?

History isn't a science, but economics is, and the reasons these things will fail are always pointed out-- as they were in this comment section-- and always ignored (as they were downvoted here on HN).

As a result more and more damage is done.

And when you see the damage the next generation of 20 year old leftists calls for socialism to fix the damage of socialism!

So yeah, when you're over 40 and you've been around the merry go round once you see what's going on.

OH, and by the way, one thing was constant- in all of these situations the people at the top profited. The politburo made out, and so that's why they support it.

It's how they exploit the poor.

We can paint it with the socialism brush, and write it off. Or we can recognize that today is a very different economic situation from, well, pretty much any time in history. We've got automation, and technology, and a burgeoning unemployed and unemployable population of non-technologists. We can try to prop up the quaint systems of the past (full employment, work or starve). Or we can change our system to one that is kinder, economical, and raises the standard of living for everybody.

As I said, I believe folks will have to grow old and die. Until then, we'll hear only FUD stories and scare tactics.

> The goal of a society is to eliminate as many people from needing government benefits as possible, and to ensure that only those who are truly unemployable receive government benefits.

Not only do I disagree that this is the goal of society, I don't see any reason to think that this should be the goal of society.

> Employers must pay a wage which ensures that basic needs are met.

It seems to me that this is a paternalistic and feudalistic approach that presumes that every member of society must be dependent on a particular employer.

And if you require employers to pay a living wage, then more and more people become unemployable.

Actually, the thing I like about basic income is that it gives you the freedom to eliminate minimum wage laws. People wouldn't have to work degrading jobs for subsistence pay, because they would already get subsistence pay, but if they earned even $3 an hour, that would be on top of basic income rather than in place of it.

I don't agree that Walmart is subsidizing the state but I could see an angle that is similar.

If the government stopped paying workers any benefits, would the cost of the worker's labor go up? If it didn't, that would indicate that employers were paying the market rate (speaking strictly from a economics perspective). I think running this experiment would confirm your argument that Jimmy would become unemployable as his market value would not increase, just his "cost".

I still think minimum wage should be increased but now I'm less sure if it a good idea/solution.

The elephant in the room is that jobs are going the way of the dodo bird. At some point there will be very few jobs left and the market value of labor will fall to near zero. At that point employers will have no customers either. Even if an individual employer can see that far ahead (like Henry Ford did) and raises his wages, he will be at a disadvantage to other employers who don't raise their wages. Forcing all employers to a higher minimum wage will get around that - but only for a while. Eventually those jobs will be automated and we'll be back to the no wages/no customers situation.

This happens a lot in over crowded markets too. In the Indian IT scenario, there are a lot of freshers every year in the market who will work for almost any starting salary(I was one such a guy at one point in time). So nobody in the chain would complain excessively about their salary, doing so would mean they are welcome to leave. The company would lose nothing as there is enough supply of workers ready to work at the price they want. The employee loses out on the longer run.

I hear this "What if the minimum wage was raised to some ridiculous amount" argument from conservative people all the time. (I think they parrot it from conservative AM radio talk show hosts)

That is a loaded question. The minimum wage does not have to be increased to some ridiculous amount, but it does have to be high enough to keep the people off of government benefits.

Additionally, if raising the minimum wage by a modest amount causes a business model to crash and burn, then that's a flaw which needs to be corrected. Maybe that business model wasn't so robust after all?

If a business depends on an exploitative minimum wage to be profitable, that business needs a new business model. If that means more automation and robotics, so be it. It is not good public policy to pay exploitative wages that force employees to go on government assistance at the expense of the taxpayers.

Tell me, there's been various minimum wage enacted in the U.S. since the 1930's. If a minimum wage is so bad for the economy, wow come during the last ~80 years, the U.S. has been the world's foremost leading economic engine?

How come the minimum wage has been raised many times throughout history, and somehow business keeps trucking along?

Nobody is suggesting raising the minimum wage to $100/hour, that's a false argument.

The market is full of distortions. Indeed the entire creation of the ideology of capitalism was about how best to regulate and harness the powerful market forces.

Re: edit

This is the irony of this. You are writing well thought out explanations, but since it's not leftist enough, you get downvoted at a community which spent non-trivial amount of time trying to raise "quality of discussion", and even more time talking about "quality of discussion".

You're forgetting about competition.

Let's say that every low wage worker becomes suddenly 10% more productive so they start making 10% more money. Would prices all suddenly rise 10% so that none of the workers would see any benefit?

This isn't the same as inflation, and will be handled by competitive forces in the market.

> You are missing one part, though. If you start giving cash for everyone, it's very likely this will result in raising prices for all commodities.

Only if you aren't taking cash from someone to pay for it; UBI doesn't conjure money from nowhere, it redistributes it. The things disproportionately demanded by those who are better off with UBI will have some rise in prices (but not enough that they fail to be more affordable to those purchasing them in normal cases) and the things disproportionately demanded by those who are worse off will have some decline in prices.

> And there you go for a another downward spiral, where you have to readjust the basic income every couple of years to make up for the inflated prices.

What you probably want to with BI isn't target a particular standard of living, but target just below the inflation tipping point set by production technology and market factors, where BI is just below the level where it would lead to runaway inflation because of people leaving the workforce reducing supply (the real inflation danger, rather than redistribution of income spiking demand). This is sort of a fiscal version of what central banks do for monetary policy in managing interest rates. (BI is essentially self-limiting to this point in the long-run, in that if you don't tail-chase by increasing nominal amount inflation will drive the value of BI down to the sustainable level. But there's lots of disruption in that adjustment, so if you are going to have BI, you want to actively manage it to avoid overshooting by too much and to correct more quickly than inflation would correct it.)

The resulting standard of living that is sustainable with BI probably won't be what most BI advocates would like to see anytime soon, because production won't support it; but it should rise with advances in technology.

Its not a foregone conclusion that commodities will rise in price if everybody has a bit more money. The rich have a whole lot more money. So the influx may raise prices, but never as much as to make the BI useless. In fact they'd have to go up infinitely to make any money useless, right?

And its entirely likely the money will be conjured up from nowhere - minted for the purpose. This solves two problems. One is that taxes need not be raised to cover the cost. The other is, it becomes a small builtin inflation that serves to redistribute wealth. That's a good thing in America at the moment.

And if the BI isn't universal, if its means-tested, then you're missing the point entirely. The testing of means is flawed, very expensive, and inaccurate. Its always gamed to disincentivize folks from getting a job, which is probably a bad thing. And it turns it into a patronizing system again, where big brother decides who's worthy.

> Its not a foregone conclusion that commodities will rise in price if everybody has a bit more money.

Yes, it pretty much is. If everyone has more money at t1 than at t0, and nothing else changes, then you've got more dollars chasing the same goods and you would expect that the price of goods would increase.

> The rich have a whole lot more money.

That's not relevant to anything.

> So the influx may raise prices, but never as much as to make the BI useless.

That's what I said: "The things disproportionately demanded by those who are better off with UBI will have some rise in prices (but not enough that they fail to be more affordable to those purchasing them in normal cases)"

> And its entirely likely the money will be conjured up from nowhere - minted for the purpose.

Every UBI proposal I've seen has called for it to be funded by some combination of replacing existed tax-funded programs and increased progressive taxation. So, as actually proposed, it would not be funded by money conjured from nowhere. (If it is, however, the expected effect on market-specific price levels is still the same as a tax-based funding mechanism, after you adjust for the increase in overall price levels resulting from the overall increase in the money supply in the "mint new money" approach.)

> And if the BI isn't universal, if its means-tested, then you're missing the point entirely.

That's fine, I didn't suggested doing that, so I don't see the relevance.

Think about it like this: if you give everybody some money, but they already have 1000 X that much money in the bank, then prices don't go up much. The rich have a lot of money, and they're buying stuff too. They matter as much as anybody; no, they matter 100X as much as everybody else.

All tax plans are of course entirely fictional of course.

And as for means-testing, the line about limiting it to folks above/below a certain income certainly sounds like meanstesting. What else could that have meant?

OH! I meant to respond to the parent comment. Sorry for the confusion!

> raising prices for all commodities

If one takes a look at prices in each century, prices for each type of commodity vary a lot. For example, in the 1960 you could rent a house where I live for the same price you paid buying 5L milk. Since then the cheapest rents has gone up by factor of thousands, but milk has only gone up by factor of 8. During that time period, many reforms has happen including minimum wages, the strong middle class, and many efforts to reduces poverty.

> in the 1960 you could rent a house where I live for the same price you paid buying 5L milk.

Really? Then your 5L milk must have been seriously overpriced, or nobody wanted to live wherever that was.

The economy is more dynamic than that. Sure, there will be short-term effects as the policy is rolled out, but new producers will enter the market to meet the increase the quantity demanded in the medium term.

Also for pure commodities, producers are all price-takers. That means that price doesn't necessarily get driven upwards.

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