Discussion in 'Economics' started by dealmaker, Feb 8, 2019.
What will happen to UBI if the economy goes down?
That is what's next... UBI or helicopter money has others put it, money from the Central Banks directly to consumers
For a few years it will bring relief, but inflation from QE + UBI in US will be quite interesting to see, with socialists taking power in US at the same time, scary...
As a Canadian I am afraid of consequences it will bring here, imagine what American's must be feeling. Greedy corporate borrowing binges must end, but this kind of stuff isn't the right way forward
UBI is a misguided concept IMO.
The top half of the household income distribution (at a minimum) is in no sense materially deprived, not remotely, even if they often operate at or beyond the limits of their income due to competition for status. So any spending on UBI for these folks would be a complete waste.
It gets more difficult the further down you go, but the things that make life in the USA relatively shitty compared to other first-world countries have more to do with weak labor laws than anything else. No job security, little or no PTO or sick days, no parental leave, and routine abuse of low-wage workers via "flexible scheduling" - where they give you no hours for a week then one day text you to come in with 30 minutes' notice. On top of that, the healthcare system is an expensive mess.
I would strongly suggest you do more research on UBI. It's not what you think what it is.
Interesting... How would UBI work ? Real inflation targets are 4-5 %, fake one they give to public is 2 %. How would UBI not raise inflation in a fast rate in your opinion ? I don't see it. QE with low inflation is possible, how can UBI with low inflation ever happen ?
Really? So you give people money for free and they feel better? Well, no shit!
If you give most people enough money to live off of, they would have no incentive at all to work. Why would anyone do something that they have to do with their time when they can do something that they want to do with their time. I consider myself a pretty driven person, but if I was just given money, I would not work. I would spend my time doing things that I enjoy doing, not things that I need to do to pay the bills. Sure, a lot of people choose to be productive regardless of the monetary incentive. But most people just work to survive. Cover that need and there's no incentive to work.
One may argue that this is just very basic income, but a single young guy with no one else to care for can live very cheap.
>>Why would anyone do something that they have to do with their time when they can do something that they want to do with their time.
There is no contradiction between doing something one wants to do and getting rich.
If UBI is implemented, inflation will rise quickly. For example, currently a shop owner is selling a bun for $1 because there's competition and buyers will usually look for the best deals because they value their hard earned money. If UBI is implemented, a shop owner would increase their prices because those who previously did not want to spend their hard earned money have now earned some 'extra income' without having to work extra hours. They are willing to spend $1.50 on a loaf of bread. After all, it's free money.
After sometime, the market will correct itself and the UBI income will be less of value or no value at all due to inflation.
UBI will also probably affect the unemployment numbers. More people are not going to work. Companies are forced to increase their hiring cost to attract workers. These costs will be factored into their final products.
The society would become a lazy society, a pampered one, and having to rely on the government. Not a good thing.
Consider this... In roughly twenty years or so, AI and automation will replace most of the driving jobs, Uber, Lyft, Taxi services, trucking industry, UPS, US Mail, or just about any driving service job will be gone. Cashiers at the grocery store, hardware store, gas stations, etc., disappearing already. Fast food industry, in the beginning phases. Even farming,,, you can go from disking to planting to harvesting a crop, with just a handful of people.
So eventually UBI, or whatever name it is given, is a certainty. Considering 48% of the population already receives payment in one form or another from the government, it should come as no surprise that that number will increase substantially. After all, we're the largest welfare society on the face of the planet.
You can make all sort of "psychological models" you want, but UBI does not alter the money supply. Nor does UBI change the value of anything. It's simply an alternative way, for better or for worse, a way to reallocate tax dollars into a social safety net. Considering the various government handouts, that's nothing new.
The key idea (which this study failed to prove or disprove, sadly) is that people who have some form of guaranteed income will have easier time pivoting from a deprecated profession to a new one as the society changes. If that is really true, it would naturally reduce transitional frictions and boost productivity.
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