[dTal]

It only triggers inflation if the money supply goes up. If you pay for UBI with taxes, it has no effect on inflation.

In theory.

The problem is that this amounts to taxing the super-rich to a much greater extent than we do now. The super-rich tend to hoard their money (that's part of the problem!) so even if you manage to do that successfully, you do end probably end up increasing the effective money supply. But not to the extent that the income becomes worthless.

[collyw]

How about just creating money and giving the same amount to everyone?

It would have the effect that the value of each individual dollar would go down to a small extent, but everyone would have say 10,000 dollars extra. The effect would be negative for the rich, but positive for the poor.

Quantitative easing seemed similar, but the money was given to the banks who just kept asset prices high - not great for the poor but good for the rich.

Anyone want to "explain it like I am 5" to to why thats such a bad idea?

[OscarCunningham]

During QE they didn't just give the money to the banks, they bought stuff from the banks. This introduced new money into the system without being unduly unfair (although by the nature of buying a lot of things at once the price was lower than it would otherwise have been).

This means that when the BoE wants to contract the money suply (as it's doing now) it has assets to sell off.

If it printed money and then gave it away then it would be in a sticky situation if it wanted to shrink the money supply again.

Also producing that much extra cash every year would produce a high rate of inflation. This would have very weird effects and would probably be highly unpleasant for everyone.

[collyw]

I don't really see it as especially fair. I had done my calculations and worked out that a house price correction was well overdue. Instead my taxpayer money was used to keep the prices artificially high, while the bankers kept their huge bonuses and I got next to no interest on the money II had saved for a deposit. How exactly was that fair?

I agree that it would probably cause innflation, but why not just repeat every ten years? As I say it would devalue money for everyone. It would also give a lump some to everyone. That is going to be positive for the people who need it the most and worst for the people that need it the least.

[rayiner]

You don’t need to tax the rich more. The US could pay for UBI by raising taxes to the level of Germany. It could do that by simply adopting German tax rates, which don’t really tax the rich more but tax the middle class a lot more.