inflation what's it about

[rennigade]

But there are significant differences involved, and it's not valid to equate those 2 very different programs.

The UE boost was targeted to people who, by definition, have lost a job & likely there was some measure of shame/fear/panic/stress/overwhelm involved. Those emotions lead to a scarcity mindset that causes people to grab & take anything they can. Plus the program did nothing to change any other social welfare programs. Psychologically, UBI would be the opposite -- it would go to EVERYONE, eliminating the shame component. You get the money regardless of employment status, so you wouldn't have the scarcity mindset & you don't need to seek/horde anything you can get at. The knowledge that it will always be there (doesn't have an expiration date) would similarly reduce the stress & scarcity feeling around that money. BL: UBI would change & normalize the behaviors surrounding receipt of basic government assistance, and that would almost certainly drive different behavioral outcomes. There's even been evidence that UBI encouraged growth of small business, because there was less fear of the consequences for failure ("I'll still be able to eat if my business idea flops"). At least in some limited (city-based) UBI studies that I've seen, all of those factors were observed.

Those are all issues that make UBI appear promising. On the other side of the coin, risks abound. Failure to actually replace the rest of the government welfare system. Potential for persistent inflationary pressure. Misuse of the funds for negative habits vs. providing for basic subsistence (food/shelter). Challenges of properly distributing those funds to the unbanked, homeless, mentally ill, dependent or disabled children & adults, etc. Potential to incentivize not working/not contributing to society (noting the caveat that this would enable more family households to have a parent reliably in the home with kids, a positive). Potential to incentivize having an irresponsibly high number of kids. The list goes on.

It's a sticky policy debate, and could only be successful if implemented very carefully. Could the US government do that? I'd like to believe so, but I'm also cynical about government efficiency & bureaucratic groupthink. Sooooo..... who knows.

I really dont think a single thing would change. Even if my wife and I received this benefit, we would still work. It would just pad our savings and we could potentially retire at an earlier age, depending on the amount given. The people who work will continue, the people who do not work will continue not to work. They wont have to. Food/shelter will be covered. If those two things are taken care of, a large percentage of people will play video games all day. Which would be great. Its not going to encourage those people to come up with new innovative ideas and start companies. Thats the fairy tale story of UBI. It sounds amazing on paper, but the reality will be much different. Kind of like those funny expectation vs reality memes.

Ill go as far to say that it will actually do more damage than good. My god, look at all the "supply chain issues" we keep hearing about. Apparently its already difficult to get people to work. We're not at the AI taking all the jobs scare tactic yet. Mostly likely some day, but not yet.

What other social welfare programs would be eliminated? Food stamps, sure. Public housing? I dont think so. Landlords will start charging more for rent since everyone is guaranteed money. That would cause an even bigger issue. Free health care for poor isnt going to vanish. It will still be free. Not enough money would be given to support that.

We'll see I guess. Money isnt real anyway. The private business of the federal reserve can print all the money they want. Ill take some too if they want to implement UBI. It wont help or hurt me, nothing will change.

[LivingAlmostLarge]

I think using the UBI to provide basic health care for everyone would go a lot further stimulating small business growth. People can leave jobs without fear. They can switch jobs or start businesses or follow a passion rather than worry about how will i have health insurance. That is a bigger driver of people working longer and for less money is "health insurance." Huge amounts of money wasted for crap. Free market healthcare doesn't work and wont' ever work. So why do we keep trying instead of UBI try universal health care step 1

[QuarterMillionMan]

According to CNBC this morning w/ Jeromes Powell's testimony the main reason for the higher inflation is the higher wages in the service sector. I hope all the people who demanded the minimum wage be $18 or $20 an hour are not complaining about the higher inflation we are seeing now.

[terri77]

I thought the push for minimum wage was for $15 an hour. Whatever it was I still see many service jobs paying below that. At least in my area.

[disneysteve]

I thought the push for minimum wage was for $15 an hour. Whatever it was I still see many service jobs paying below that. At least in my area.

It varies by locale and job.

I’ve read two reviews of Powell’s speech and saw no mention of him saying that (but I didn’t read the full transcript).

The fact remains that higher wages are a response to inflation, not the cause. Multiple studies have repeatedly come to the same conclusion.

Powell did say that continued supply chain issues are causing inflation.

We also continue to see record corporate profits so clearly modestly higher wages for the lowest paid workers aren’t the issue.

[rennigade]

I gotta say, its a great time to be in business for yourself. Imagine being able to juice the price of anything just by saying "supply chain issues." Easy money. There is always going to be a supply chain issue if the common folk havent figured that out yet. Why does someone as dumb as myself have to let people know this? sigh

[QuarterMillionMan]

Los Angeles homeless gets $600,000 units. Inflation will keep going higher and higher with crazy government spending like this.

New downtown Los Angeles high-rise building to house homeless in $600,000 units (msn.com)

[LivingAlmostLarge]

The minimum wage if tied like SS to inflation and indexed annually would be higher than $7.25 it is federall right now. I think they should do that, then we would stop arguing about the minimum wage because some places it would be higher. But what would there be to argue if you just did the same thing as SS and did it at the same rate? But people like to pretend they are cutting government spending while the other side likes to pretend they are for the working class.

[QuarterMillionMan]

IHOP will charge .50 cents surcharge per egg now with the shortage. I've been holding off buying eggs due to the higher costs but I guess I lost the battle and will need to buy some on my next trip to the grocery store.

[ua_guy]

Eggs, gas, and the price of goods went up in the last 3 weeks. Great job USA

[EasyMoney00]

In for another thread deterioration.

[disneysteve]

IHOP will charge .50 cents surcharge per egg now with the shortage.

I heard Waffle House was doing that. I hadn't heard that IHOP was too.

Bird flu is wreaking havoc on the industry again.

[disneysteve]

In for another thread deterioration.

Just a reminder that discussing public policy related to financial issues is allowed here. Just keep the political comments out of it. It's fine to discuss how government actions are impacting prices as long as that doesn't include personal attacks on individual politicians.

[QuarterMillionMan]

I heard Waffle House was doing that. I hadn't heard that IHOP was too.

Bird flu is wreaking havoc on the industry again.

Good catch, Waffle House, IHOP, all the same to me.

[disneysteve]

Good catch, Waffle House, IHOP, all the same to me.

Don’t let anyone in the south hear you say that