UBI will cycle in the bottom of the economy.
When you give a rich person more money they buy assets and increase their wealth, it does not impact their spending activity and has no measurable impact on economic activity.
When you give a middle income person more money they buy something new or pay down debts. Buying something new stimulates economic activity, but paying down debts is really just another wealth transfer to the banks which are owned by rich people.
When you give money to low income people they spend it. They have unmet needs and always have something they can spend that money on. That money then generates economic activity.
Increasing economic activity is what all of the interest rate and inflation talk is about. If you get people spending money that generates activity which increases wages, increases income, and decreases wealth inequality.
A good example is during the GFC the Australian government gave low income people $750AUD, about $350USD. The prime minister asked people to spend this money rather than save it. People bought a bunch of things, in the people I knew it was mostly TVs and new clothes, things you can put off for ages but benefit from whenever you buy them. All of this purchasing stimulated the economy, leading to Australia being less impacted than almost any other G7 nation. We recovered very quickly and boomed from there.
If you want a more long term example look at any welfare. If you have extremely poor people they just die. They are underfed, have weak immune systems, and they face imminent death. They can’t access housing so they end up on the street. They have tonnes of inteactions with police and end up in the criminal justice system. They end up having their lives ruined and being purely a drain economically. They suffer.
If you give them enough money to have housing and food they are not going to be as costly to manage. They won’t require policing, they won’t get sick as often, and they will suffer less. Will this increase the competition for the lowest cost housing? Yes, but the answer to that is to build more housing. Even with the impact to housing cost this will not result in 100% of that payment going to landlords. People don’t pay their whole income for rent, they will buy food and other needs first, so if they are faced with too high a rent cost they will remain unhoused but at least tbey will eat.
mipadaitu@lemmy.world 7 months ago
You’d increase taxes along with UBI, so most middle class people would end up neutral (or slightly positive). You can’t just dump tons of money into the economy without turning other dials to keep it stable.
A wealth tax would essentially be redirecting money from the top 1% and guarantee a stable monetary floor for everyone.
Probably there’s a dozen other changes, along with bankruptcy protections, interest rates, and anti scam protection would also need to be implemented.
You identified an obvious problem, which has been considered by intelligent UBI advocates that have studied this for a long time.
treadful@lemmy.zip 7 months ago
I think this is kind of the big problem with the messaging. I know plenty of economists say it would work, but it’s non-intuitive to most of us.
snooggums@midwest.social 7 months ago
Do people understand that rent and other necessity prices are skyrocketing right now without income increasing? They are not intertwined in the way the myth of raising rent to match UBI is presented.
Lmaydev@programming.dev 7 months ago
This seems like it’s the only way it would work.
Everyone gets a certain amount a month.
You get taxed a certain amount back depending how much you make above some threshold. The average wage could be good.
So now the high earners are funding the system. But if they get sick and can’t work the tax goes away but they’re still getting that base payment automatically.
Low earners get help and high earners get a safety net.
dandroid@sh.itjust.works 7 months ago
I have found that economy experts say that things are counterintuitive more often that any other field. I think at this point I have just accepted that the economy is some black magic that I’ll never understand. So I’m gonna smile, nod, and let the experts do their thing.
z00s@lemmy.world 7 months ago
Public messaging is difficult for economics because of its complex nature. Even when you simplify it, the interconnected nature of seemingly unrelated things and unforseen consequences often escape people. Then there’s the human element which sometimes produces baffling outcomes.
But all that most people think is “Why do I have to pay so much for petrol? That’s bad.”
xantoxis@lemmy.world 7 months ago
Don’t forget price controls, strong anti-collusion legislation and strong antitrust.
Toes@ani.social 7 months ago
I’d like to see any income above 2k / month get redistributed globally.
SeeJayEmm@lemmy.procrastinati.org 7 months ago
Where do you live that 24k/yr is a livable wage?
kobra@lemm.ee 7 months ago
Huh? Does that mean $2k/month is your cap for what anyone should ever need/want? It just seems incredibly low to me so I’m confused.
lvxferre@mander.xyz 7 months ago
People are focusing too much on your number, and too little on your take.
I think that a strong progressive tax works better than just two brackets (no taxation vs. full taxation). Specially when coupled with universal basic income - the idea is to eat the rich, not the slightly less poorer, on those you just nibble.
TokenBoomer@lemmy.world 7 months ago
Radical. I like it. Maybe $4000/month to keep it above the poverty line (so it’s not a such a shock to the system). Lol
BlindFrog@lemmy.world 7 months ago
Like taxes on luxury goods?
ColeSloth@discuss.tchncs.de 7 months ago
This doesn’t answer ops question at all, aside from “I’m sure ubi advocates have thought about this”.