[geoffmunn]

This is what most people miss when they criticise UBI - for most people, it will be immediately spent, taxed, and put back into the economy. As long as the velocity is there, it's not an entirely bad idea as long as inflation can be kept under control.

[hn_throw2025]

> as long as inflation can be kept under control.

Nice trick if you can pull it off.

So for the 1GBP you print, you recoup up to 20p in VAT, or less for foodstuffs.

And more money chasing the same goods and services means…?

[eru]

Are you suggesting that UBI should be paid out of freshly printed money?

I don't think that's how people commonly understand how UBI should be financed.

[hn_throw2025]

I can only speak for the UK. But given the fiscal headroom for the foreseeable, I don’t see where else it would come from? If they don’t have it, they either borrow or print it?

For any meaningful scheme, you would be talking about hundreds of billions.

[surgical_fire]

That's were things such as wealth tax kicks in.

The money that just sits untaxed on the vaults of the extremely wealthy should be taxed to finance this.

This is trickle down economics done right. Remove money from the wealthy and redistribute it to benefit society.

[FergusArgyll]

No one has money "sitting in vaults"

They keep money in bonds (lending money to people, corps, govs that need it), stocks (raise the value of companies that are valuable thus letting them borrow more etc) or they consume which pays for all the poor peoples salaries

The immaturity of people when it comes to economics is a problem

[johnecheck]

You're broadly correct.

Don't let the uneducated messenger distract from UBI itself though. Proposed seriously, it's about reducing asset values and high incomes to redistribute that value to everyone who isn't losing more value than the UBI. The real argument is that it would mean short-term economic costs to build a more robust system with a bigger pool of people with the safety net and risk appetite to start/join companies.

[surgical_fire]

> They keep money in bonds (lending money to people, corps, govs that need it), stocks (raise the value of companies that are valuable thus letting them borrow more etc)

That's wealth that should be taxed.

> The immaturity of people when it comes to economics is a problem

I agree. Just not in the way you imagine.

[eru]

> The money that just sits untaxed on the vaults of the extremely wealthy should be taxed to finance this.

Approximately no one has vaults of gold like Scrooge McDuck. The richest people largely hold their wealth in company shares.

So you are suggesting to raise the cost of capital for companies?

[surgical_fire]

> Approximately no one has vaults of gold like Scrooge McDuck

Yeah, I also like to be pedantically literal when I don't have good counter arguments. I feel your pain, brother.

You can replace my "vaults of gold" analogy for propety, yachts, real estate, company shares, etc. Whatever someone holds in their own name that constitutes wealth above a certain threshold should be taxed.

> So you are suggesting to raise the cost of capital for companies?

Corporations also should contribute to society, as they also benefit from the common infrastructure.

There's this pervasive idea that "if we tax the rich they will stop investing in companies and us filthy peasants will be out of jobs" which is the bullshit of the ages. If there is demand for goods and services, there will be those that supply them.

[hn_throw2025]

I would imagine the extremely wealthy have passports, global homes, and the vaults you mention might well be in Switzerland.

The extremely wealthy will also have an army of lawyers and accountants to mitigate against this, not to mention trusts and holding companies.

It’s a nice idea, but the implementation is tricky.

I’m not arguing for them, just being realistic.

[surgical_fire]

What they actually have is an inordinate power to lobby governments.

No army of lawyers would save them from actually effective regulation.

[eru]

As you've figured out, you can't sustainably raise a lot of money via printing. At least not in real terms when adjusted for inflation. (Of course, in nominal terms you can raise arbitrary amounts by printing.)

Now how to finance a UBI is a good question.

A land value tax would be an interesting choice. Especially since a UBI will probably lead to higher rents.

[eru]

If you have an inflation targeting central bank, velocity of money doesn't really matter.

If velocity speeds up and inflation goes up, the central bank will remove money from circulation to hit their target. If velocity goes down, the central bank will inject money into circulation.

The fiscal multiplier is zero.

(Or rather, any deviation of the fiscal multiplier from zero is evidence of an incompetent central bank.)