[AnthonyMouse]

I'm trying to understand what your objection is.

Suppose you're right and a $5000 voucher will cause a $1000 increase in tuition for three years, after which new schools will open and the competition causes tuition to fall again.

So as a parent, for the first three years I'm up net $4000/year and $1000/year is going to build new school capacity to meet increased demand, and thereafter I get the whole $5000/year. Am I supposed to be unhappy about this?

[ElComradio]

You are basically saying that what happens in the short term is not relevant, but as taxpayers, a lot of people will be upset by profiteering in the manner I described, even if it is only for 1-3 years.

Or from another angle- what will prevent an ever increasing amount of tuition such as happened with the higher education system? "We need to raise the voucher to $10,000 now…"

[AnthonyMouse]

It's not really profiteering. Expanding capacity costs money. That's where the money is going.

And what you're getting at is one of the reasons that a UBI is better than vouchers.

Suppose you create a $5000 education voucher and there was previously a school with a tuition of $4000. That is now over; they might as well charge $5000. And if there is a higher quality school charging $10,000 and people whine that the voucher doesn't cover it and have the value of the voucher increased, now every school will charge $10,000, because that is the only way to get the whole voucher and there is no reason not to.

But suppose you replace that with $10,000/year in cash like a UBI. Can all schools now raise tuition to the entire amount? Obviously not, because all else equal people will still prefer the $7500/year school so they can spend the remaining $2500 on whatever they want.

[ElComradio]

UBI still will have some short term profiteering effects. A slum lord who knows his tenants are uniformly $1K/mo richer is going to raise the rent short term. You seem to be assuming everyone is automatically acting in their long term best interest. "Oh neat, I'm going to raise the rent $500 and plow it into new apartments and renovations so five years from now I'm still competitive!" Vs. "I'm going to raise it $500 and buy a BMW!" I just don't see it not happening. I agree that long term it will hash out.

[AnthonyMouse]

There is always going to be that one guy who responds to any change by going on a bender and smashing his own property. Tomorrow they won't be competitive. That sounds like self-correction.