
Four Reasons a Guaranteed Income Won't Work - yummyfajitas
https://www.bloomberg.com/view/articles/2013-12-04/four-reasons-a-guaranteed-income-won-t-work
======
jcslzr
wont work? the only thing people has to do with that money is spend it...how
difficult could that be?

~~~
DougN7
I don't see how it can. Let's say we give out $1 trillion worth of basic
income to everyone. Is there $1 trillion more goods and services available to
spend that on? No. In fact, depending on how many spend their time on non-
productive work, there might be a lot less. So a lot more money chasing fewer
goods and services. Classical price inflation will quickly make that basic
income have no purchasing power.

~~~
ivcha
This is a weak argument. First of all, it seems as a strawman argument, since
you assume a trillion dollars get somehow injected while the amount of goods
and services stay the same. Secondly, you assume people will suddenly stop
being productive, which probably might be true in cases where people earn so
little that it is much less than the basic income (which is one of the
problems basic income tries to solve).

~~~
DougN7
I picked $1 trillion because I've read that as an estimate (actually read $3
trillion, so was trying to be conservative).

Where the money comes from is important though which you point out probably
wouldn't just be printed (injected from nowhere), but pulled from somewhere
else. So where DOES it come from? I'm assuming one way or another it comes
from the rich or from companies -- where else would we come up with that kind
of money? But that doesn't change the idea that 330 million (I'm using USA
numbers) people suddenly have significant more money than they had before.
What will they spend it on? Everyone can't upgrade their housing -- the
housing available is finite, and supply pretty much meets demand. Giving
everyone money increases demand, but how will supply change to meet that? Go
through the same thought process on cars, food, electronics, toys, clothing,
transportation, energy, raw materials, etc. Increased demand on everything
will increase prices pretty much across the board. It's Econ 101.

~~~
ivcha
The number is fine; I take it's reasonable since we are talking about ensuring
BI for a lot of people. Yes, it makes sense that the money comes from the
richest, where we assume the government is actually capable to achieve it in
some way.

So you are essentially saying that the money that was hoarded by rich, now
would not be spent at all, and in addition, this would raise prices across the
market. This does not make any sense to me, since the assumptions that need to
hold for that kind of result seem invalid: firstly, you need scarsity of goods
in the existing situation for this to happen which is clearly not the case
(especially when we talk about demands of the lower and middle class);
secondly, demands would go higher yes, but only proportionally to existing
division of classes of consumers -- thus, we would essentially have a
situation in which all classes get promoted in their "buying power" except the
very rich (and therefore, no big disruption to the market overall).

