[chimeracoder]

> Theoretically, it will increase wages and employment since there will be a lot more money spent, increasing economic activity.

At a macroeconomic level, that money comes from somewhere (generally taxes), which means that it's also decreasing consumption and/or investment by an equivalent amount. You can make the argument that collecting the taxes to fund a program is still desirable in the end, but it's mathematically incorrect to say that it would have a net increase in economic activity.

To put it another way: what would the money be spent on if it weren't collected as tax revenue? Some portion of it would be spent on consumable goods, and the rest would be saved (invested). Money saved is very important to the economy, because that's how society gets access to capital for long-term investments (whether public works projects or private investments).

[11thEarlOfMar]

> "which means that it's also decreasing consumption and/or investment by an equivalent amount"

I am not sure about this, because the net amount is still new money in the economy, being spent for services, saved, or invested. Yes, a typical person is paying more taxes, but they will have net more money to spend or save: $BI - [Tax on $BI] is still > $0.

As a further example, let's say there is a salon that employs 2 beauticians before BI. After BI, they see an increase in business, and now can employ 3 beauticians, increasing employment by 1. The 3rd beautician is now paying taxes that were not paid before. Those taxes in part can help fund the BI.

[chimeracoder]

> I am not sure about this, because the net amount is still new money in the economy

No, the net amount is zero. Unless you're talking about literally printing money (in which case the costs are spread about in the form of inflation). There is no 'new money'.

> Yes, a typical person is paying more taxes, but they will have net more money to spend or save: $BI - [Tax on $BI] is still > $0.

You're ignoring the number of people who will be paying more in taxes than they will recieve. Even if you make the moral argument for taking their money and giving it to others, you can't ignore the fact that, without the additional tax, the money would literally be used in some other way, either as consumption or as investment.

As a ballpark, if the payout is $5,000/person/year * 300,000,000 people = $150,000,000,000/year, that's $150,000,000,000/year that needs to be raised in taxes in order to cover the program. Every dollar that gets paid out has to be funded through money that would otherwise be in someone's bank account, and which they either would spend or would save (invest).

[orlandob]

Money supply increase does not necessarily lead to inflation.

[11thEarlOfMar]

Got it. Thanks.