There are two kinds of goods. The ones like computers and phones which are steadily getting cheaper and the ones like housing whose price has got inflated enormously. Remember how we tried to fix the education problem by student loans and how we tried to alleviate the housing burden by mortgage tax deduction and subsidies of interests? I don't think the problem is people are unable to afford milk or a shiny iPhone. It is the price of housing, education, and healthcare.
I don't understand how anyone ever thought that making it easier to borrow money would make things with inelastic demand more affordable. People will pay what they must to get food and shelter. If you make tertiary education non-negotiable in getting a job, then people will pay what they must to get an education. If you loan them huge sums then you just reduce price insensitivity and create a massive pricing bubble.
Some context that was left out, inflation has been stubbornly low this past decade[1]. For many of us, this feels counterintuitive based on our experience with housing, education and healthcare. But as you pointed out, globalization and industrialization has resulted in downward pressure on prices of a wide array of goods. And when you factor housing costs across the entire US population (and not just the high COL areas), the inflation math sort of pencils out[2].
And my original point was that inflation caused by UBI should not be a concern because a) the prices of iPhones and milk are constrained by forces that are beyond the impact of UBI (globalization, hyper-efficient capitalism, etc..) and because b) prices of housing, education, and healthcare have long since untethered themselves from needing to be affordable (so UBI, which largely benefits the working class and poor, will have little impact there).
[1] https://www.frbsf.org/economic-research/publications/economi...
[2] I disagree with how the Fed has handled monetary policy the past few years. Even if the inflation numbers support their moves, they seem to be willfully ignoring very large bubbles (real estate, VC) forming due to their policies.
For instance, rents are proportionally related to the income of the population. How can we prevent the extra cash flow from being translated into higher rent/housing prices? If I have that extra cash, I would certainly 'leverage' it to expand my real estate portfolio :)
That said, I don't object to UBI per se and I agree that the Fed's policy would lead to some undesirable consequences. But without addressing the problem systematically, UBI would go nowhere better, I am afraid.
Here is another angle to look at the issue from. We have been relying on monetary stimulus for the last decade to keep the economy chugging along. The landlord class has been benefiting from that via cheaper interest rates. What if, instead of lowering rates, we did a UBI and in your proposed scenario, most of that money just results in high rents. Well, we would be roughly in the same spot we are in (stimulus largely benefiting landlords), but with the key difference that people who are really struggling (living in their car for example) can use that cash to get back on their feet. Also, because the money passes through multiple peoples hands before eventually getting sucked up by the wealthy, it will actually result in higher measured economic activity (because GDP is basically measure the velocity of money).
So I guess, that is what I don't understand. Our current policy is to just shovel money to the wealthy. They in turn just bid up the price of stocks, real estate, art, yachts, super bowl tickets, etc.. creating an inflationary bubble for rich people things. With a UBI, the working class gets first dibs on that stimulus, and every one up the chain will benefit (including small businesses, which also don't bet much benefit from monetary stimulus).