I have no quarrel with the concept of seeing everyone’s basic needs are met, but we don’t have to send Bill Gates a check in order to move grams to a better quality cat food. With a sovereign fiat currency not restrained by revenue we can “afford” it without even raising taxes as long as we use taxation to control inflation, but that is the weakness of UBI.
Inflation will always remain ahead of taxation because no additional productivity results from the “large” amount of additional money pumped into the economy and taxation, by accounting identity, must follow spending/money creation. In most models productivity actually falls initially, accelerating this inflationary pressure. It is not possible to “pre-fund” such a large investment with taxation as the money must exist in the economy before it can be collected.
This is not possible to predict from small study groups, but many computer models my economist friends use have shown it to be true every time they are run with any substantial UBI benefit. The successes with small studies are only due to the fact that they exist in a larger non-UBI environment where making a subset of the population richer will naturally improve their relative position.
Very little about economics is actually about money. Money is just a unit of measure we use to give universal context to transactions in commerce. As such, it is never in short supply unless its production is artificially limited like it was when we did that gold standard nonsense. The real limitation to spending, on UBI or anything else, is available resources and labor, not money. The increased demand for goods and services from UBI would almost immediately take us to full employment and resource utilization. After that, it’s all inflationary except whatever ends up in savings.
If we assume the UBI will require the elimination of most safety nets in a futile attempt to “pay for” the benefit via political choices it would soon become a nightmare for anyone who can’t work, or even those whose lack of marketable skills keeps them in the bottom of the wage range. What appears, on the surface, to be an attempt to raise their condition would be the source of many more problems for them without a workable solution short of ending the program and letting the economy adjust to the new inflated level of base money.
If the program created an eventual cut back of employment, which is likely, those who are made unemployed would be much worse off without the safety nets and supply chains would be threatened without a countercyclical injection of federal money. Monetary inflation + cascading job losses + decreased productivity = depression in every model known.
