To pay the every person a meaningful basic income, the average person has to lose that amount of value due to inflation by holding the currency and letting it be inflated away.
Who would want to be the person to hold this currency and lose massive value? For a new currency, it’s especially problematic that the costs likely will go to the power users of the currency while lurkers get value for free which heavily desincentivies becoming a power user.
Modern governments raise most of their revenue by raising taxes and not by printing money. A huge reason for that is the danger of hyperinflation. If you want to restribute money you can do that via raised tax money and pay an UBI, you haven’t made a case why raising money via printing money is better then taxes.
An important feature of governments is that they have the ability to uniquely identify their citizens and thus can give out benefits that go to every citizen equally. For an UBI ability to uniquely identify citizens is important to prevent citizens from signing up multiple accounts and getting more money.
Who would want to be the person to hold this currency and lose massive value?
Holding cash woud indeed be a bad strategy… just like it is now. Your options would be to spend it for something you consume, spend it for something you keep for later, spend it for means of production, or lend it (if you can thus make more money than you lose by the currency decay). Just like it is now.
danger of hyperinflation
The value of the “alpha” parameter would determine whether the inflation is hyper or not.
Holding cash woud indeed be a bad strategy… just like it is now.
Today, whether I hold cash or have my money at the bank doesn’t make much difference.
The value of the “alpha” parameter would determine whether the inflation is hyper or not.
No, inflation is not controlled. You can get into a situation where nobody wants to hold cash and everybody prefers to change their cash into other things and then there’s in hyper inflation.
The danger for hyper inflation is why central banks generally want fight all inflation as it sets incentives for hyper inflation that is hard to control once it starts.
Average in this case is mean not median and saying “average person” is misleading, because there are going to be very few people who actually lose exactly the amount of their ubi to inflation.
The accurate statement is that “people on average will lose...” but even that neglects the central justification for ubi, which is the marginal value of nominal $. Taking $1 from the richest person and giving it to the poorest is a net gain is total utility (or it’s not, but please be explicit if when arguing that point). It’s then just a question of where the line should be.
To pay the every person a meaningful basic income, the average person has to lose that amount of value due to inflation by holding the currency and letting it be inflated away.
Who would want to be the person to hold this currency and lose massive value? For a new currency, it’s especially problematic that the costs likely will go to the power users of the currency while lurkers get value for free which heavily desincentivies becoming a power user.
Modern governments raise most of their revenue by raising taxes and not by printing money. A huge reason for that is the danger of hyperinflation. If you want to restribute money you can do that via raised tax money and pay an UBI, you haven’t made a case why raising money via printing money is better then taxes.
An important feature of governments is that they have the ability to uniquely identify their citizens and thus can give out benefits that go to every citizen equally. For an UBI ability to uniquely identify citizens is important to prevent citizens from signing up multiple accounts and getting more money.
Holding cash woud indeed be a bad strategy… just like it is now. Your options would be to spend it for something you consume, spend it for something you keep for later, spend it for means of production, or lend it (if you can thus make more money than you lose by the currency decay). Just like it is now.
The value of the “alpha” parameter would determine whether the inflation is hyper or not.
Today, whether I hold cash or have my money at the bank doesn’t make much difference.
No, inflation is not controlled. You can get into a situation where nobody wants to hold cash and everybody prefers to change their cash into other things and then there’s in hyper inflation.
The danger for hyper inflation is why central banks generally want fight all inflation as it sets incentives for hyper inflation that is hard to control once it starts.
Average in this case is mean not median and saying “average person” is misleading, because there are going to be very few people who actually lose exactly the amount of their ubi to inflation. The accurate statement is that “people on average will lose...” but even that neglects the central justification for ubi, which is the marginal value of nominal $. Taking $1 from the richest person and giving it to the poorest is a net gain is total utility (or it’s not, but please be explicit if when arguing that point). It’s then just a question of where the line should be.