OTTAWA - The government's fiscal watchdog says a guaranteed basic income program at the federal level could cut poverty rates in Canada by up to 40 per cent.
Which is bullshit. People are bad at saving money, they end up spending the surplus anyway so these companies end up selling more stuff, increasing their profits without having to change prices.
Inflation is caused by money velocity. If everyone suddenly has more money, that means more money is chasing the same number of goods and services. This pushes up prices. UBI would absolutely increase inflation if major countermeasures are not taken. Classical countermeasures include significantly raising taxes, significantly raising the central bank lending rate, and significantly lowering government spending. Probably some combination of all three plus more would be required to mitigate inflation.
It gets worse, though, because the types of goods and services that lower socioeconomic groups purchase are different to that of the rich. So to mitigate inflation on specific goods like food staples and rent, measures to remove money velocity must be targeted at the low end. Arguably, these measures should cancel out any UBI benefits, meaning the net gain is moot. So the exercise is a waste of time in aggregate. The solution, then, is to increase supplies of lower end goods and services. Governments are traditionally terrible at command style economic incentives, and I trust the market to fill the gap. It just takes time. Which is to say, food inflation should eventually normalise.
Housing, on the other hand, would not. And this is because of Canada’s (and really most Western country’s) NIMBY laws. Making dense development expensive and impossible close to jobs keeps house prices and rent high. Massive deregulation at the federal level would be required to allow massive housing developments to stave off massive house price and rent inflation should UBI be implemented. It must be done in tandem or the net social damage would be incalculable. I’m not convinced the federal government would have the balls to do this, and home owners are quite self-interested when it comes to their property values.
An alternative (or perhaps parallel solution) is massive reductions in immigration. Net zero for five years at least. This would give the existing (broken) construction sector time to catch up with existing demand and mitigate the worst of property inflation.
I am an advocate for UBI as I think it will become an inevitable requirement in the near future. However it comes with great cost in various obvious and not so obvious ways, and advocates rarely acknowledge these. For example, many UBI advocates are simultaneously open borders activists, and seem perfectly happy to live with that dizzying level of cognitive dissonance.
There is a related solution: land value tax. This has been championed by economists for more than a century. It is considered a “near perfect” tax. It cannot be offshored, hidden, or channeled through shell companies. It aligns social wellbeing with individual incentives (these are currently at odds). It encourages investment in businesses instead of land. It can radically reduce house prices and rent. It incentivises high density housing and productive use of high value land. This makes public transport economically viable for many. LVT can generate huge taxes which can be used to provide UBI, for example. Even if it doesn’t, halving rent for everyone produces a similar or even greater effect on poverty for low socioeconomic groups. They can afford to live close to work, and they have access to cheap public transport. This is compounded by the effect of far greater economic activity. LVT tends to be much more easily stomached by older and conservative voters.
These people would mostly be buying food and that’s mostly what people are scared to see increase in price when it wouldn’t, groceries would just make even more profit.
Apparently you aren’t smart enough to figure it out
We have more than enough arable land to feed everyone on earth.
And to buy more land costs…to ship further costs…to ship more costs…
India buys an unbelievable amount of fertilizer from Russia just so they can grow foods.
Droughts are going to be ever more popular due to climate change
Food prices are only as low as they are due to slavery
And since you don’t get it land and fertilizer are finite. You can’t go to another country and just take it, so if that arable land isn’t within your borders it might as well not exist
We waste about a third of the food we produce.
Irrelevant to the topic
Also, I hope you realize that you’re saying it’s ok to let some people starve, right?
You need to reread because I very clearly said the opposite
100% relevant, we can feed more people that suddenly have the money to buy food they couldn’t before just by wasting less of what we produce, meaning we don’t need to exploit more land than we do now, impact on production is nil, impact on groceries is positive.
Which is bullshit. People are bad at saving money, they end up spending the surplus anyway so these companies end up selling more stuff, increasing their profits without having to change prices.
Inflation is caused by money velocity. If everyone suddenly has more money, that means more money is chasing the same number of goods and services. This pushes up prices. UBI would absolutely increase inflation if major countermeasures are not taken. Classical countermeasures include significantly raising taxes, significantly raising the central bank lending rate, and significantly lowering government spending. Probably some combination of all three plus more would be required to mitigate inflation.
It gets worse, though, because the types of goods and services that lower socioeconomic groups purchase are different to that of the rich. So to mitigate inflation on specific goods like food staples and rent, measures to remove money velocity must be targeted at the low end. Arguably, these measures should cancel out any UBI benefits, meaning the net gain is moot. So the exercise is a waste of time in aggregate. The solution, then, is to increase supplies of lower end goods and services. Governments are traditionally terrible at command style economic incentives, and I trust the market to fill the gap. It just takes time. Which is to say, food inflation should eventually normalise.
Housing, on the other hand, would not. And this is because of Canada’s (and really most Western country’s) NIMBY laws. Making dense development expensive and impossible close to jobs keeps house prices and rent high. Massive deregulation at the federal level would be required to allow massive housing developments to stave off massive house price and rent inflation should UBI be implemented. It must be done in tandem or the net social damage would be incalculable. I’m not convinced the federal government would have the balls to do this, and home owners are quite self-interested when it comes to their property values.
An alternative (or perhaps parallel solution) is massive reductions in immigration. Net zero for five years at least. This would give the existing (broken) construction sector time to catch up with existing demand and mitigate the worst of property inflation.
I am an advocate for UBI as I think it will become an inevitable requirement in the near future. However it comes with great cost in various obvious and not so obvious ways, and advocates rarely acknowledge these. For example, many UBI advocates are simultaneously open borders activists, and seem perfectly happy to live with that dizzying level of cognitive dissonance.
There is a related solution: land value tax. This has been championed by economists for more than a century. It is considered a “near perfect” tax. It cannot be offshored, hidden, or channeled through shell companies. It aligns social wellbeing with individual incentives (these are currently at odds). It encourages investment in businesses instead of land. It can radically reduce house prices and rent. It incentivises high density housing and productive use of high value land. This makes public transport economically viable for many. LVT can generate huge taxes which can be used to provide UBI, for example. Even if it doesn’t, halving rent for everyone produces a similar or even greater effect on poverty for low socioeconomic groups. They can afford to live close to work, and they have access to cheap public transport. This is compounded by the effect of far greater economic activity. LVT tends to be much more easily stomached by older and conservative voters.
as an environmentalist I disagree because resources are finite
But ultimately it’s not an excuse to let billionaires continue exploiting people
These people would mostly be buying food and that’s mostly what people are scared to see increase in price when it wouldn’t, groceries would just make even more profit.
You are still wrong but again, it’s not an excuse to not do this
Funny how when we increase minimum wage that’s exactly what happens though
Imagine you have a garden, you can feed yourself off it
Now add one more person, you can no longer feed everyone off that garden
That’s before we get into soil deterioration, but I am sure you’re smart enough to figure out why you were wrong
We have more than enough arable land to feed everyone on earth. We waste about a third of the food we produce.
Also, I hope you realize that you’re saying it’s ok to let some people starve, right?
Apparently you aren’t smart enough to figure it out
And to buy more land costs…to ship further costs…to ship more costs…
India buys an unbelievable amount of fertilizer from Russia just so they can grow foods.
Droughts are going to be ever more popular due to climate change
Food prices are only as low as they are due to slavery
And since you don’t get it land and fertilizer are finite. You can’t go to another country and just take it, so if that arable land isn’t within your borders it might as well not exist
Irrelevant to the topic
You need to reread because I very clearly said the opposite
100% relevant, we can feed more people that suddenly have the money to buy food they couldn’t before just by wasting less of what we produce, meaning we don’t need to exploit more land than we do now, impact on production is nil, impact on groceries is positive.