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Young parents in Baltimore are getting $1,000 a month, no strings attached, a deal so good some 'thought it was a scam'
(www.businessinsider.com)
this post was submitted on 08 Nov 2023
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Futurology
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Really curious to see the outcome.
Most research up until now seems to point to this as the best way to solve poverty.
Not only that, but it likely significantly stimulates the local economy. People with no money buy nothing, meanwhile people with an excess of money don't buy much extra.
Can confirm. I never buy anything.
I'm worried about companies just raising their prices to absorb the extra money like they did with the covid stimulus.
This has been a common argument made against raising minimum wage.
There is some truth to it, companies absolutely do try to profiteer however in Canada and many states that have raised their minimum wage the quality of life of the average person did increase despite these effects.
Moreover every test of universal basic income not only increased the quality of life of the people but tax revenue as well because it gave citizens the economic mobility to seek more gainful employment and education.
Yeah, in a healthy developed economy inflation is a sign of more economic activity. When people have money, they spend it (duh). This balance between low employment and low inflation is what the Federal Reserve tries to achieve through managing interest rates.
Worrying about a little inflation is missing the forest for the trees. It's more important that quality of life improves and the economy does better.
I'm not worried about a little healthy inflation, I'm terrified about the 10+% annual inflation we've seen the last few of years continuing or worsening. People are watching their income and savings being gobbled up by ridiculous prices, and it hurts. I wasn't trying to state that giving people money would for sure cause additional price increases or even argue against giving the money. I was more or less just expressing concerns over a possible outcome. Since it is indeed a possible outcome, hopefully anyone passing any legislation around a UBI also considers it and either passes accompanying legislation to address the risk, or gives education on money management and supply/demand principles so that everyone doesn't just rush out and throw all their new money at companies, prices be damned.
Studies show that people don't "throw all their new money" at stupid things when they get a small amount of money. They fix their car or buy their kid new shoes, things they needed but couldn't afford.
Inflation was never near 10%, let alone above it. I think you need to do a bit more research on these topics.
Official federal inflation over the last 3 years has been between 6-7%. That's not indicative of local inflation, nor does it account for hyper inflation on specific goods like groceries. I have watched the prices on certain grocery items increase up to 100% in the last couple of years. I've watched some discretionary goods increase between 30-50%. My rent has been increased 22% in the last two years. So the fed not reporting 10% inflation for the year doesn't necessarily mean that people's purchasing power hasn't been reduced by a greater margin.
Studies show that people living below their means will spend additional income on necessities, bills they're behind on, etc. That's fucking fantastic! But we've also seen that people who are current on bills and not in poverty will spend windfall money on luxury goods or entertainment. That's also good because it stimulates the economy. People who are well off will just save or invest windfalls.
Again, I'm not trying to argue against UBI. I'm just expressing concerns over how the extra capital will influence pricing, if at all.
Inflation hasn't been 6-7% for three years. It was only around that level in 2021 and 2022. And no, the BLS is not tracking your individual rent and things you see in the grocery store. They track averages.
People argue about what should be included in CPI, and how accurately it measures inflation. But what you're saying is just wrong, or exaggerated based on your personal experience.
2021: 7%
2022: 6.5%
2023: 6%
Source: https://www.investopedia.com/inflation-rate-by-year-7253832
Okay
You missed this:
So you are looking at an old article that only references the first two months of the year. If you check the actual BLS website, you'll see something very different:
https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
You just went to Google and clicked the first link you saw. That's why I told you to read more.
My only worry about unintended consequences is that if this becomes a broader program (say, everybody gets $1000/mo, not just families that meet aome.kind of criteria), then prices for basic goods like rents will go up (i could see rents going up exactly $1000). Otherwise who could argue how well this kind of cash supplement works?
They gave the exact same reason for why they didn't want to raise minimum wage, and then rents went up anyways. I don't buy it...
Imagine a system where prices didn't magically skyrocket every time the poor catch a break
Yeah that is a concern, however it's one that people studying these systems are well aware of and looking to account for.
I see this same argument peddled around for a lot of different things and it's absolute horse shit. We do nothing to improve society for our citizens because of bullshit misinformation like that and yet? PRICES OF EVERYTHING CONTINUE TO RISE!
I think it's important to acknowledge that there's a big difference between an individual expressing a concern about something in an online conversation, and a specific lobby making an official argument. I don't think OP was making an argument. They seem to just be expressing a concern. It's a valid concern. That doesn't mean it's accurate, or founded in facts or research, it's just a fear.
It depends on the good or service in question. Price elasticity is a pretty well studied field.
Here's my prediction. Poverty crushed, nothing but positives come from the experiment, and then nothing comes from it because "puritan work ethic".
My prediction? CIA sends them more heroin.
The CIA doesn't send heroin. Come on, the cia gives out meth
And crack!
Germany has been doing 500/month per child for the whole country for years now, so we kinda already know it will turn out fine.
Just start printing money ezpz.