RE: Andrew Yang's Siren Song of Free Money Will Cost You Dearly
Hello @bahh, and thank you for the feedback! Usually, places that try the UBI end up halting the program because it's not sustainable. In the case of Alaska, the permanent fund corporation is owned by the state and funded by oil revenues, therefore, they can afford to pay it out with no strings attached. As far as I know, they're not compensating for the loss with a statewide VAT either. So, that lets you know they have the money to do this in Alaska. However, when a nation doesn't have the money and has to impose a tax to make it so, then all those taxes are immediately passed down to the consumer at the cash register. I strongly question the feasibility of the program. Additionally, taxing people money to give them money doesn't make sense. Not only that, it opens the door for them to do the same with health care. They'll give people more money "free money" to pay for "free single-payer health care" and then they'll jack up the VAT even higher than before. As far as how people spend the money, I don't have any judgments about that, other than the fact it's stolen money just like all other social programs.
You're saying that free money creates inflation but that's not true. Like I said, before dismising it, go inform yourself on whet it is you're talking about, ubi has been studied for decades now and when you say that
https://reason.com/2018/08/01/ontario-ends-ubi-experiment-2-years-earl
That's a fairly recent article and, it hardly would make someone conclude that it was because it's not sustainable. In fact that is the bullshit rhetoric, word for word, that the "thieves" (as you surely suggested),use. What we find, in experiment after experiment is that ubi works, across the board. It creates more consumers, it gives people a chance to vote with their pocket, it let's them employ other people and to keep the demand up. Nations do not have money?
You know why the colonies went to war? No, it wasn't taxes. It was the lack of money. It was what having to pay taxes with Scarce Gold and Silver Coins created, leading The Most Prosperous Economic Times in History into rampant extreme poverty. It was not for the lack of labor, but the lack of money to buy goods and services, which dried up jobs and producers, and which led to massive unemployment that destroyed wealth. Money in proportion to the economy, that is what the thriving colonies recognized, yes some has hyper inflation but Franklin knew what he was doing when he recognized the genius of "money in proportion" so as to have enough for the free transaction of goods, because it's not only too much money that destroyers a nation but too little as well. Then again, he readily recognized that taxes are voluntary, something I think you'll die before considering it.
https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil
In this case, the VAT that they will use to either fund or partially fund the UBI is what creates instant inflation in the price of goods and services. Take the UK as an example. When you add a 20% VAT the good or service is immediately transformed at the cash register from £100 to £120. When you figure in every good or service this happens to; things get out of control very quickly.
If a salesman came to your door and offered you $100.00 free every month and all you had to do was sign up for a book club membership which costs $120.00 a month and as a bonus, you got one free book a month up to 10 dollars in value. Then regardless of the fact that you're getting $100.00 in "free money" and one "free book" every month; the truth of the matter is the money ain't free, the book ain't free, and you're out an additional $10.00 a month. With the $120.00 monthly fee, you're paying for it all, and this includes the net loss.
This doesn't even touch on traditional inflation; so for example, let's say the VAT doesn't cover the entire cost of the spending, perhaps the government will subsidize a percentage of the difference for the first 3 years to get everyone on board before they incrementally start jacking up the percent of the VAT to a realistic number that will cover the entire program.
This means the portion government funded which wasn't covered by the VAT will have been covered with new money. Every time government does a spending bill they're borrowing new money from the fed, and that inflates the supply of the currency which eventually trickles down to the prices of goods and services.
The inflation is why you can't get a coke for a nickel anymore like it was for coke's first 70 years of existence, the value of a dollar goes down, and therefore the prices of goods and services go up, the price differential is passed along to the consumer. I don't know how the URV or the real would relate to the value of the federal reserve note. It doesn't seem like a solid comparison, but I hear things aren't going so well in Brazil. The socialism they engaged in set them back quite a bit.
The UBI is like trying to tap into free energy, we all want to believe it's possible, but until we see a working model that doesn't require adding water to get free water, then we'd be foolish to do so at the peril of civilization as we know it.
First you're confusing taxes with inflation. Taxes aren't a form of inflation, they are costs to goods and services.
https://www.differencebetween.com/difference-between-cost-of-living-and-vs-inflation/
The only argument I'll entertain isn't that it'll cause inflation, but that you think it'll guarantee an increase in cost of living.
https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7
But then again, inflation isn't as simple as you think, and what are you trying to say with something that has nothing to do with how Brazil dealt with their hyperinflation? Ubi has been studied, we know it's effects, it points to the opposite of what you're suggesting, it is not "a peril". You can open your mind, how do you talk about something you seemingly have no clue about? You think you know how inflation works? Why? And how do you come to that conclusion that you have any clue as to how inflation works, money creation or ubi?