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Comment by Pet_Ant | Hacker News Reader

> I am in favor of a Universal Basic Income (UBI) to replace the status quo of benefits, including Medicaid, food stamps, housing subsidies, etc. But I want the UBI to be a relatively small amount, something like $750 a month for a family of three.

Okay, but it's not basic income if it can't cover the basics. That's just a subsidy. I mean that's not even rent. Let alone healthcare.

A basic income allows a basic life allows for people to take more risks and start new businesses.

If you are really against people being able to not work, than instead of UBI you want to support Employer of Last Resort.

https://en.wikipedia.org/wiki/Employer_of_last_resort

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I'm not necessarily against UBI, who doesn't want to eliminate poverty, but I have trouble understanding how it doesn't immediately result in price inflation of the goods and services most consumed by those at the lower end of the income spectrum.

For example, if everyone is given an additional $1,000 / month, would most of that not immediately get captured by landlords through inflated rental prices for low-income rental units? Wouldn't it be the same story for used cars? etc?

UBI doesn't magically increase the supply of goods / services, only the demand for them, right?

I don't see how it would cause rent to rise, unless it somehow increased demand for housing.

Which, I suppose, it might if it made it possible for the homeless to actually be able to find homes.... of course, I fail to see how that would be a bad thing.

> I don't see how it would cause rent to rise,

I mean one argument is implicit collusion amongst landlords. UK price fixing like this is illegal, but in US I believe it is legal as long it is not explicitly.

Some people, given $1000 a month, would move to locations where rent is less than $1000. There are still lots of those, but they are in locations without jobs. Lots of people are originally from those low rent locations and would like the opportunity to move back. So if UBI makes people more mobile and able to move to find low rent apartments, it limits the ability of landlords to raise rent.

Some people, given $1000 a month, would move to locations where rent is less than $1000.

With all due respect, you don't know that. What's for certain is that it would increase money supply in the economic system. Everything else is pure supposition.

What's for certain is that it would increase money supply

With all due respect, you don't know that. The more well thought out UBI systems are fiscally balanced. They increase taxes enough to pay for UBI. The average taxpayer would receive a tax increase for the same amount as the UBI they receive. People with less than average income would see a smaller tax increase and Bill Gates would see his taxes go up by much more than the UBI he would receive.

You just use the words fiscally balanced when describing the American economy. Specifically handing money out. The country cannot even pass single spending bills, you have no idea if it would be fiscally balanced or not. UBI is like communism, it hasn't worked anywhere it's been tried, and would still require taking money from one group and giving it to another. In the past, when the government hasn't been able to do that, they just print more.

> they just print more.

No they don't. They borrow more. Similar effect, but more accurate and a very different connotation.

But from whom do they borrow more, now you're talking about increasing the national debt. There's no way UBI can actually function or work without harming the system. It's a pipe, dream man, if you want money work for it

But you just a described a scenario where demand increases in these locations. It enhances, not limits, the ability to raise rent prices.

People moving from an expensive city to a poor city do not increase overall demand -- letting go of an apartment in a rich city to rent one in an inexpensive city does not effect overall demand.

But what does have an impact on prices is the elasticity of demand. If you're willing and able to move to get a cheaper apartment you increase elasticity of demand, lowering prices. OTOH, if you're stuck in your apartment because it's the only one close to your job...

Rents are regional, "overall" (by which I assume you mean either national or global) demand is irrelevant. If the government provides a program that incents people to move to low-COL areas (low, because there are no employment opportunities), rents in those areas will increase.

And, more significantly, rents in the high-COL areas will decrease.

net win.

That's simply incorrect. Imagine 5000 people decide to leave Manhattan (1.6 million) to move to beautiful Saratoga Springs (28,000). It will have no noticeable effect on Manhattan rents, but will vastly increase Saratoga rents. It's amplified because people who were forced to share a housing unit in Manhattan due to economics can live alone thanks to lower COL in Saratoga combined with the government subsidy. So total housing demand increases.

This phenomenon is clearly demonstrated every summer when people flood Saratoga during racing season, and every hotel room and Airbnb doubles, maybe triples, in price.

Your entire hypothesis relies on you being blind (by choice, it appears) to some easily-observable realities of the world.

Unrealistic scenario is unrealistic. 5000 people didn't move from Saratoga Springs to NYC. And 5000 people on UBI aren't going to from NYC to Saratoga Springs, it already has expensive rent. No, if you're on a marginal UBI you aren't going to move to attractive places, you're going to move too someplace where you can stretch your money -- aka someplace cheap and someplace where you have support, AKA family.

People moved from tens of thousands of different American towns to NYC, and lots of people in NYC would love to move back to those tens of thousands of different towns. And if you move back to where you came from, it means that you're not going to stretch the capacity of where you're moving to.

5 people moving from NYC to 10,000 different towns is far more realistic than your scenario. And 50,000 moving from NYC is likely going to affect rents there more than 5 people moving elsewhere.

> 50,000 moving from NYC is likely going to affect rents there

You're just making things up. Despite losing 10-20,000 people every 3 months, NYC rent increased steadily. Rents did drop initially at the start of the pandemic when outflows were 40-50,000+ per quarter, but even as the outflows remain greater than 30,000 per quarter, rents have fully recovered and continued increasing to record levels. And you believe that handing out money freely is going to lower the rent? Come on man.

net outflow chart: https://www.crainsnewyork.com/economy/are-people-leaving-new...

rent price chart: https://nypost.com/2023/04/13/manhattan-median-rents-reach-a...

Inflation isn’t simply driven up by supply but also greed.

It is highly important to remember economics is snake oil for the lost part. As short a time as a few years ago, the Nobel Prize was awarded for work proving wage increases did it limit jobs, as was claimed for generations. One would think this had been proven long ago, but that’s not the case. It’s propaganda.

Indeed, a great deal of the economic orthodoxy is little more than propaganda. All economic notions should be considered such until proven beyond a doubt.

And it probably would be a good thing to track how wrong is the nonsense of people like Kudrow and Summers, yet they are trotted out as gospel constantly. Jamie Dimon too.

If you were going to invest your own money in somebody for them to start a business, would you choose somebody who had been living off government handouts, or somebody who had gotten a job, worked a job, and thus learned something about how a company operates? which resume looks better to you? What if they actually worked a job in the field they wanted to start the company in?

If you want to see more such resumes, what incentives should the government offer for resume building?

What makes it basic is that you can earn additional money on top of it. It's the basis of your income.

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