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Comment by ClumsyPilot | Hacker News Reader

"shows what happens when people get money for free - prices rise to absorb it"

A - so prices of $40,000 cars have increased becauae people got $2000 or whatever for free? What is that as percentage of wages, 0.5%

How about this massive supply chain and manufacturing disruption, could that somehow be responsible?

B - the wealthy and corporations were getting money for free for 20 years, it's called quanittative easing, and it caused massive inflation of asset prices

> "pain Y for product Z, this does not change if you rescale the meaning of money."

Usually economic theories talk about productivity, resources and velocity of money. This stuff about pain sounds like it came out of a sadistic religious cult.

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>How about this massive supply chain and manufacturing disruption, could that somehow be responsible?

That is part of it. Fortunately there are plenty of other examples in US and other country history where money handouts are clearly a driver, so it's not a question of whether or not easy money adds to inflation.

As mot economists put it, all long term inflation is ultimately the result of more money in the system.

>This stuff about pain sounds like it came out of a sadistic religious cult.

Not a rebuttal. If Bob willing to work job X for Y hours to get apartment Z, simply rescaling the value of money (inflation) will not change that Bob is willing to work job X for Y hours to get apartment Z.

Do you think this is not true? That he gets 37 yotobucks or 19 fishcoins or 39801892 bubblenotes is irrelevant. He is willing to trade time and effort for goods. If the value of the currency moves he is still willing to do this.

Free money will not, and historically has not, come without costs.

> Not a rebuttal

Just like you don't need to rebutt a flat earther theory that ignores basic laws of gravity, no-one needs to rebut an argument that ignores basics of economics.

You are conflating consumer good and assets, you are conflating creation of money and redistribution, you are totally ignoring the three most important factors - velosity of money, productivity and interest rates.

Firstly prices of houses and other assets depend on interest rates, not wages.

Secondly UBI does not do 'rescaling', whatever that means, nor does it create new money, it does redistribution. Redistribution does not cause inflation.

You could have presented an argument that velosity of money would increase so much it could trigger inflation, or that productivity would collapse, but you have provided no such argument, let alone evidence

UBI however would mostly transfer this cost to high-income earners (if financed through taxation) or capital owners (if financed by debt/printing money). Basically it's just a form of progressive taxation with a large safety need (without a means test) at the bottom, which would function as a mechanism to decrease inequality (which some economists believe negatively affects economic growth). Also another factor (and I'm personally not fully convinced on this) is that it would would actually result in higher overall productivity longterm by giving more people the opportunity to invest their time into gaining new skills etc.

> UBI however would mostly transfer this cost to high-income earners

Show me your napkin math. I've been all through this so many times that hand-wavy claims are not enough - simple estimates will show you how these claims do not work.

And if it was a simple we getting some more taxes somewhere, do you not think we'd already gather that tax? It's not like there's money that is easily taxable either politically (or sometimes, even economicially).

Sure, if we could magically get more money, and get it from places that are not current places, and ignore all effects of giving such money yo people on inflation and the economy, and get it so that there are zero side effects, maybe you'd be on to something.

But even in that case, it's still wiser to spend this money on better targeted things than simply handing to everyone with no regard who needs it.

It doesn't seem to me that apartment rents going up by $n/month when UBI of $n/month rolls out is an impossible proposition, since everyone can afford extra $n. Can you elaborate as to why this wouldn't happen?

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