UBI is implemented tomorrow. Every citizen gets $1000 per month.
Landlord now knows you have an extra $1000 that you never had before. Why wouldn’t the landlord raise prices?
Now you have an extra $1000 a month and instead of eating rice and beans for a few meals you go out to a restaurant. The restaurant owners know everyone is eating out more so why not raise prices and maximize shareholder profit as always. The restaurant/corporation is on TV saying, “well, demand increased and it is a simple Economic principle that prices had to increase. There’s nothing we can do about it”.
Your state/country has toll roads. The state needs money for its deficit. UBI is implemented and the state/country sees it as the perfect time to incrementally raise toll prices.
Next thing you know UBI is effectively gone because everything costs more and billionaires keep hitting higher and higher all time net worth records.
It’s the same argument behind stimulus checks tbh. You give people money so that they can spend it on necessities and that money goes right back into the economy. Since our economy is based on growth and spending, more people spending money overall helps the economy, not hurts it. In addition, you’re spending less money on solving societal issues. Well fed sheltered people cause less problems.
This is different though. If my rent is $2000 a month now, and I get $1000 a month from the government, the landlord can make my rent $3000 a month on renewal. Yes the money is going into the economy but it is enriching the upper class instead of helping the folks that need it.
And you’re still gaining services you didn’t have before. People who couldn’t afford a dentist, for example, now can. You need a whole different set of laws to tackle wealth inequality. We can do both.
And you’re still gaining services you didn’t have before
No, you’re not. In the example they just provided, nothing has fundamentally changed because the money you were given was eaten up by price increases, leaving you exactly where you were before.
Because UBI isn’t like a stimulus check. Stimulus checks are temporary. With UBI, every single buisness, creditor, and landlord knows for a fact everyone’s monthly income just went up across the board, so they know they can safely raise prices without pricing out customers.
That’s the fundamental problem with UBI: it only works if it’s coupled with strong price controls and regulations to prevent price gouging, and can be rapidly adjusted if necessary. Prices can go up overnight, pay raises can be acquired over a pay period, but the UBI payout will not be as flexible.
Look how impossible it was to get the minimum wage raised from $8.
Minimum wage is $15 in my state, so wtf are you talking about?
Landlords pay taxes on their property. Pay utilities. They dont have “every need met” or they wouldn’t need to charge rent in the first place.
You’re just arguing that the system is too broken fix. Which is even more reason why we should instead of shoving our heads in the sand.
But nah, too haaaaaard. Grrrr. Bad people will keep being bad so no point doing good. Grrrr.
Fucking loser.
Not the same, IMO. Stimulus checks are not for everyone, there are rules, which means that they can’t raise prices universally, because not everyone is getting the money.
The point of a stimulus check(giving money to those who need it so they spend it) is the exact same as UBI. Don’t be daft.
Stimulus checks caused one of the best stock booms of this decade then immediately we had inflation. I don’t think stimulus checks are a well understood phenomenon
then immediately we had inflation
Gee, I wonder if there was a massive, global event that could have had a big impact on the economy around the same time…
Much bigger than 2 checks to some people… Can’t put my finger on it…
PPP handouts to the corrupt rich?
The biggest driver of inflation was energy prices.
more people spending money overall helps the economy
The idea behind this only works IF more people are spending. If Rent jumps that money goes to the landlord, who may (but probably won’t) spend the extra money, and it doesn’t benefit everyone.
I forget the term, but there’s an idea that talks about how many people/businesses touch money. So if you create a dollar into an economy (you can’t create money with out causing problems but let’s pretend it’s magic) if that money goes into a person’s bank it’s probably a bad thing. If that money goes through 10 people’s hands, you’re getting taxation on it in every place which is a good thing (for the government). Problem is landlords are usually well off (at least well enough to own more than one property). They might not be “mega rich” but they almost certainly will save that money, rather than spend it.
Besides which stimulus checks are a one time payment… not exactly the same as UBI.
If people aren’t living lay heck to paycheck, afraid of where the next meal comes from, they spend more. You forget that this money will first go to the most needing first. Yes their landlord will pocket some of that. But they will have a reliable place to sleep. They will go out and buy food. Their landlord will pay utilities and taxes… It’s not perfect, but it’s a hell of a lot better than denying those who need it the necessities because “well some people might profit down the line”. Then fix the rental laws. Fix labor laws. It’s not a complete solution, but at least it’s something in the right direction.
And way to miss the point of the analogy by latching on to one trivial difference. “It’s a one time payment” doesn’t change what kind of payment it is and why it’s given. It’s still free money. If you’re gonna be that pedantic, I think your meant to be on Reddit still.
Landlords only have control over you, because you have to find a place where there are good income sources. If you have an UBI, you have a lot less pressure to move to a city with high-paying jobs.
All of a sudden, you have a bunch of new options. You can move to a rural town. You can move to places with lower average incomes. Hell, you can just buy a lot of land in the middle of nowhere and build a house.
With consumer goods, it’s a bit different, because their prices are less about artificial scarcity and more about production costs. However, as noted in some of the other comments, if you just don’t print money but finance it with taxes, it won’t be that much of an issue.
All of a sudden, you have a bunch of new options. You can move to a rural town. You can move to places with lower average incomes. Hell, you can just buy a lot of land in the middle of nowhere and build a house.
sounds nice but I seriously doubt UBI would be more than $1,000 per month. Enough for groceries and a car payment. NOT enough money to move out of town and buy land and build a house.
Long term, why would it be limited to $1000?
This is honestly an issue about the long term prospects of our species. More and more production is becoming automated, resources owned by a small proportion of the population, and complex work likely going to AIs. This causes a fundamental breakdown of our current system - people working is largely “redundant” in a world of automation; people are less and less of a “resource” and capitalism begins to make less and less sense.
We’re playing with the idea of UBI now, but we’re going to need solutions to this problem. Whoever owns the robots, AIs, land/resources owns everything. Either we let this be concentrated in the hands of an arisocratic class of billionaires, or we rebuild the system and accept capitalism is over. If people can’t “sell” their time through work, then how are people going to live. UBI is not a single solution in itself - it could allow a utopia or it could be a dystopia to that enables more control by those who want to own everything.
I know it all sounds very science-fiction but this is the reality our world is sleep walking into. Instead of coming up with plans to face this, our politicians are unsurprisingly pissing about focusing on nonsense and tinkering at the fringes of the problem at best.
Do you honestly think the government is going to pay every citizen a full living wage to sit around and do nothing for the rest of their lives? Keep dreaming.
In a properly regulated functional market they couldn’t. Their renter would move to a place the owner didn’t do that. The same would apply to any other market.
In reality there would be temporary inflation, since there is a bunch of new money to drive demand. But again with a well regulated market working as it should, supply would eventually increase to meet the new demand and everything would reach equilibrium again.
That could be mitigated, by slowly increasing the UBI from 0 to 1000 incrementally. The slower it is, the more time the market has to supply the increasing demand.
I can see that being very possible. You see this when taxes are levied to “improve something” and then that money doesn’t go to that something in a directly helpful way. And then the budget that is the main staple of survivability of that something is kept static because of the “new influx.”
For example, say that you have a toll road increase to help the infrastructure of your roads. Say your Annual Budget for Transportation is $50mil for 2021. In 2022, you requested $60mil. You decide to implement tolls in new ways and increase tolls in other ways (like fines, mileage taxes, and so on) to make up that shortfall. This brings in an additional $10mil, let’s say, in 2022. The revenue is forwarded to 2023. But in 2023, you actually need $80mil because of the two years of shortfalls where it stayed at $50mil, yet costs continued to increase. That $10mil from 2022 now puts you $10 mil behind in 2023. The fact that the previous budget needed steady increases were ignored because “well, we’ll just make things more expensive to make up 2022’s shortfalls of the $60mil request.”
That’s IF that $10mil isn’t siphoned for other things. Fresh money brings fresh ways to spend it. Grifters via backroom contracts to “fix roads” that go over budget with nothing to show for it. So these new fees and increases actually made things worse due to no oversight.
So yeah, I could totally see UBI being siphoned off by similar things.
My understanding is that UBI would benefit the impoverished the most, allowing them to get out of debt, put food on the table, or maybe even put a roof over their head, finally opening the door for them to live a prosperous life. This significant change and opportunity for them outweighs the inflation they may face. Food, water, shelter, and healthcare are a human right and UBI is one way to deliver that, so we should probably commit for that reason alone. With no other changes, worst case scenario, those of us that are better off can begrudgingly cope with the inflation potentially created. But besides the potential price hikes it’s worth mentioning that we will all see a return on investment as a society when our weakest are made stronger.
As for where the money should come from and how to fight the potential inflation so us in the middle class don’t lose the quality of life we’ve become accustomed to, we need to make the ultra wealthy finally pay their fair share, break up monopolies to create competition, and properly punish exploitation.
In your hypothetical, the market just jumping in cost like that creates opportunity for competition in the market. Because everyone who could not establish a biz charging X can get into the game charging between X amd X+Y, undercutting the gougers and driving prices lower over time. Theoretically.
Which is why capitalism only works if it’s paired with strong anti-monopoly regulations.
In the current environment, damn near every good and service is cornered by a small number of companies, sometimes only one. So while all restaurant prices probably won’t go up, all vehicle prices will.
Hell, with this whole “inflation” bullshit we’ve seen that the entire economy is happy to influence public opinion to allow for an orgy of price hiking. Not necessarily in a coordinated way, but not not in a coordinated way.
Yes, but the idea is that UBI money still spends, and there’s still overall much more money than that in the economy, so there should be a floor for the housing and food that a UBI will buy you, even if housing and food use up most or all of it.
Kind of like how increasing a rocket’s size increases its fuel need increases its size some more, anyone implementing UBI needs to make logical guesses about the amount of inflation and knock-on effects and try to accommodate them, but the idea is to make sure no one is flat broke and starving even if it doesn’t really lift people out of poverty directly. SOMEBODY will fill the market niche for people seeking housing and food on UBI, and it will be up to the government to ensure they meet minimum health standards and to incentivize/mandate enough of it. Also, any UBI system probably also needs to have a very graceful downward curve (if you have one at all) as other income increases, so that people will be willing to work to supplement it rather than fearing that they have to choose between UBI and backbreaking labor in exchange for “UBI plus a dollar.”
UBI is not a magic bullet, but it is a sort of quick and dirty social safety net that inserts the government’s money into the system without the political and administrative overhead of running housing etc. programs itself. Theoretically that might mean things happen more efficiently, and if it’s more than the literal bare minimum to live then it also affords a certain amount of agency to the people on it to use their remaining resources how they see fit, but it could go really wrong too. You still need regulation and the power to adjust amounts to ensure that the UBI people receive is adequate for the intended purpose, and a bad UBI program could be run in a way where a government uses it as an excuse to simply abdicate any further responsibility for its people’s well being.
Why don’t we need to do the same level of overthinking for tax breaks?
To a certain extent we do, and frankly if UBI ever comes to the US it will probably be in the form of a Tax Credit. While most of us on Lemmy would probably agree the end result is grossly inadequate, the weird soup of taxes, credits, and deductions is the result of generations of politicians working the most accessible levers to manipulate economic policy, occasionally even with decent intentions.
A tax credit is not UBI. UBI is paid throughout the year as income.
It would be comparable to social security payments in frequency.
This is why you also need government/public housing. When rents went up here the government had more houses built.
OP is arguing for more government involvement in the economy but doesn’t know it. The government can set prices and subsidize certain things, at least they do that here.
If rent everywhere suddenly jumps then the DOJ has a slam dunk case of price collusion.
If there was no external stimulus, they would have a slam dunk case. When every gas station jacks the price up 20 cents because the price of oil goes up, it’s just the market.
Put 1000 dollars in everyone’s pocket, every (smart) landlord will react and change their prices accordingly. That’s not “Collusion”, and the DoJ will never be able to make a case. That’s just landlords paying attention to what happened in the world.
That doesn’t seem to happen when you raise minimum wage, so probably not. Also, it hasn’t happened in the places that have tried UBI.
No because the entire tax system would be rebalanced so the average person is no better off.
The point of UBI is to raise the income of the very bottom of the ladder and take it from those at the top, while simultaneously dismantling all the other benefits systems.
But build more houses anyway because that’s the root of all issues.
If my landlord raises my rent to match the UBI I’m getting then I’m going to move to the Apartment down the street that DIDN’T raise their rents because I FINALLY can afford to do that! Or are you saying that Landlords are ILLEGALLY colluding with one another to ensure Rent remains high? If that’s the case why are you bringing up UBI?
I compare landlords to gas stations, if one increases the cost of gasoline for 0.20 USD overnight, believe me that the one less than a block away will follow suit in less than 6 hours.
Only if the price is actually increasing. Otherwise you’d just sell cheap petrol and put them out of business
You’d go up at least 10 cents. Still worth it to cross the street, but more profit while it’s available.
Because they actually are illegally colluding. UBI is a proposal to address a lot of stuff, not just rent
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.
Some would but then immediately lose the competitive edge to those that don’t, and there’s enough of them that some will break ranks even if they tried to form a trust over it
A better question is, would more houses get built and if so, who would build those houses? If not, and there are more people needing houses than houses available, do you not think that the extra money would mean people would be willing to pay more?
