If UBI is implemented as a form of wealth redistribution—in other words if a progressive tax fully funds the UBI payouts—then the money supply inflation problem goes away, no? At least on the economy-wide scale.
I guess there is still the problem that at the bottom of the income scale there is now more money chasing e.g. a stickily-fixed supply of low-income housing, so the prices of such goods are likely to rise. But might some of the people who used to compete for that stock of housing also now be UBI-boosted into setting their sights on higher-quality housing and no longer be part of that competitive pool? Maybe it evens out.
I think the problem you are describing at the bottom of the market is why I expect UBI not to work, because it will fail to do enough to subsidize demand to move anyone up in the market, resulting in a “wealth” transfer that only serves to reduce average purchasing power.
If UBI is implemented as a form of wealth redistribution—in other words if a progressive tax fully funds the UBI payouts—then the money supply inflation problem goes away, no? At least on the economy-wide scale.
I guess there is still the problem that at the bottom of the income scale there is now more money chasing e.g. a stickily-fixed supply of low-income housing, so the prices of such goods are likely to rise. But might some of the people who used to compete for that stock of housing also now be UBI-boosted into setting their sights on higher-quality housing and no longer be part of that competitive pool? Maybe it evens out.
I think the problem you are describing at the bottom of the market is why I expect UBI not to work, because it will fail to do enough to subsidize demand to move anyone up in the market, resulting in a “wealth” transfer that only serves to reduce average purchasing power.