| > 2. There's no economic mechanism that guarantees we'll have enough money to fund it every month. This isn't true, since the state can always just create more money. The real limitation is in real resources and production capacity, and if a UBI was implemented by creating more money than the existing production capacity can sustain, it would likely drive up the rate of inflation. If the UBI is set to a fixed nominal value, this would eventually balance out, possibly resulting in a corresponding UBI real value that is insufficient for people to live on. (What level of real value is sustainable is an empirical question.) I agree with you that creating demand for labor is a better approach if done well. Ideally, you'd create a conceptually infinite demand for labor to ensure there's no involuntary unemployment. Of course, there's then the risk of increasing the rate of inflation via that labor demand, which you can fix by fixing the price at which the labor demand becomes infinite. That's the direction that the "employer of last resort / job guarantee" proposals go in, though those also get flack from some people for being like workfare. |
UBI, guaranteed jobs, seems all these solutions fundamentally require sufficient money flow to work. People spending slowly (rich or poor) means low tax/biz revenue causing program failure. I think the key problem is how we can guarantee the economy to sustain X velocity of money.