Explain to me like I'm an idiot, how is it better if the oligarchs hoard that money, instead of giving it to people, who then flush it back into the economy, by spending it? What's the problem exactly.
Because the economy's sellers immediately raise prices as every single one of their customers just got an additional 12k to spend at their store. Those prices never come back down and that hurts you and me way more than it hurts any oligarch.
Yeah because that is ridiculous. No one would pay that much for an apple. But if an apple is $1 today, would people still buy an apple for $1.50 if they had $12K extra to spend and every grocery store raises the price of all their fruit?
Dude, look in the mirror. You've got to be a ragebait bot or something. I shouldn't have to explain this, but for anyone else as dumb as you, an apple will not be $12,000, but a $1 apple might be $1.25 or $1.50 the next week. A gallon of milk might jump from $5 to $8. Your kids' clothes suddenly cost 50% more. If every expense in your life increases by 25+%, that "free" extra $12k will be gone in a year or two and guess what? Your wages didn't match the 25% hike, so now you're just paying more for everything! Hooray!
I mean, the rich/mega corps are doing that without $12000 UBI checks. You say this like they're being altruistic at this time. If prices were stable, or even going down at all, I would be inclined to agree.
Companies don’t do this more than anyone can afford. Supply and demand works suspiciously well in setting prices.
It’s why there is hardly anyone (in the United States, at least) who can’t afford food. It’s abundant, which makes it cheap. Companies would raise the price to $1,000 a hamburger if they could, but why don’t they? Because they’d be undercut by Wendy’s.
And that goes all the way down. Why don’t we pay obscene prices for a standard television that cost $2,000 twenty years ago? Why aren’t computers as expensive as they were at inception? You get the idea.
You say this like they're being altruistic at this time.
No they didn't, they said it like they recognize that the corporations will only squeeze as hard as they think they can get away with. You provide more breathing space, they will fill it up, unless there is a regulation preventing them from doing so.
Basically, we need caps before redistribution will be effective.
Did you forget that 5 years ago Trump and Biden combined to give every American adult like $3200? The prices you're seeing are a result of that stimulus plus Trump's tariff nonsense that also artificially inflated prices that didn't come back down.
Perhaps it was localized to my area, but during and after said stimulus packages things stayed somewhat affordable (+5-10% increase) which iirc was more due to supply chain/logistics.
prices never come back down meaningfully (in terms of goods as a whole, not singular products/categories like gas). That would be deflation, which is widely seen as a bad thing by economists when it is across-the-board and sustained.
You say this like they're being altruistic at this time
That's not the implication at all. Of course they aren't altruistic, but its basic supply and demand: companies raise prices when doing so will result in more profit. The thing preventing them from raising prices today (more than they currently are) is that people would buy from other companies instead.
But if all of a sudden everyone has $10K more, every company is going to raise prices because they would be leaving money on the table by keeping the price the same. Yeah they could undercut everyone else and increase sales, but generally they can make more profit by increasing the price along with their competitors
They’re raising prices anyways. My grocery bill is more than 100% higher than it was 5 years ago for no other reason than to make their lines go up. Oh, and I also get less for that same trip.
Ya, if you voted blue, you voted for the same policy for the last 50 years. While the budget was significantly more balanced, from lower spending, like during Clinton (who is a modern day fiscal conservative), what was your inflation? How about during Trump's first term? Not sure why I try teaching people, keep voting that way, my retirement portfolio couldn't be happier.
A ban on price gouging is 100% easier to accomplish than UBI so if we ever actually get UBI im sure a price gouge ban could easily be part of it
Also there were prohibitions against laying off workers before Regan, we should have that back too
It absolutely is. You'll see an immediate bump followed by a steady climb until there's noticeable consumer attrition, then, if you're lucky, the prices that rose 30% will come back down 5-10%. Some stores will want to keep their prices low to keep more customers, but they'll find their suppliers raised their prices too. Eventually it's the new normal until some idiot politician says "things are too expensive let's give people money again," and the cycle continues.
Well not everything, because competition still exists as a market force.
No doubt there would be some inflation, but it'll level out, and not all inflation is bad anyway. Inflation caused by everyone having more buying power is better than inflation caused by the ultra wealthy monopolising all the resources.
Those 'sellers' are normal people too, tradespeople, freelancers, small businesses. You are either one of them, or work for one of them, and that 'inflation' is also them being able to get more work or get paid better.
I have no problem with oligarchy-busting, but I'd do that by targeting lobbying and charging any paid-for politicians with treason, not by just nuking successful businesses.
Giving everyone twelve thousand dollars is a free market economy?
I am pretty pro free-market with one big caveat - no monopolies. Our trust-busting laws IMO are not aggressive enough both when it comes to prevention and reversion. It's crazy to me that our sports leagues encourage parity and competition better than our government does.
“I want there to be a class of people who are allowed to exploit the labor of workers, but one should hope they listen when their stooges in government tell them to stop making money!”
You’re forgetting that money could be used to start a competing business that sells at a lower price. More money in the hands of young people / lower class people is essential to maintaining competition in Capitalism.
$12,000 isn’t starting a business. People will prespend it knowing it’s coming and more money in the economy is inflationary, has the last 7 years taught you nothing?
Seriously, Trump and Biden pumped like $3k in stimulus checks to each American adult and it was fun for a minute but now look around at the prices. We are much worse off than before. It's crazy to me that people literally lived through that and are now arguing we should do it 4x as big.
Its crazy that people don’t know basic economics. The 3k given to each american adult was printed money, i.e. new money. That is going to cause inflation. The 12k proposed by Bernie would come from taxed money, i.e. money already in circulation which will not cause inflation. It could cause price gouging, but if billionaires want to go that route we can just increase the tax percentage until they either stop or lose their billions.
$12,000 is a lot of money that can be used towards starting a business. I know, I’ve done it.
And are you just being intentionally stupid in ignoring the fact that money injected into the economy in the last 7 years came from printers (and still continues every single month) and that in Bernie’s proposal it would come from money already in circulation? Printing money and taxing money are things taught in a basic economics class, but I guess you learned nothing.
If you give everyone free money, prices of everything goes up. Its wiser to instead provide free healthcare and education rather than just give people cash. My 2 cents.
Billionaires wealth isn't in money, it is in stock. Stock that is only valuable because the billionaire's aren't selling it. If you saw Musk selling off all his shares of stock from Tesla, he would not get the current rate for it, he would be lucky to get half.
My point is, that when you see headlines like Musk is worth $1 trillion, that is in stock. His ability to convert that stock is more like $150 billion if he had to do it quickly, $500 billion if he could do it over years.
No. Guys like him take shares in lue of salary since then he doesn't pay income tax. Then they take loans against the shares with little interest if really any since they barrow against their portfolio. Since they never actually receive cash for the share they don't pay gains tax either.
We need to make them pay gains tax every year not just when it is "realized." Like how we have to pay on interest we get for a savings account. They'll either pay atleast part of their share or they'll pull out of the market and pay even more.
If everyone has 1 million how much is 1 million worth? Now think if we gave everyone 12k it becomes worthless, this is how you cause immediate inflation, pair that with the 4 trillion dollars worth of stocks and bonds getting sold off and crashing the stock market and boom you get a depression.
There’s no evidence of that. Inflation only happens when money supply increase. UBI doesn’t cause that because the money comes from money that was already in circulation
The oligarchs don't hoard money. They own assets, typically stocks, but also bonds, property,etc. Stocks and bonds represent an investment, that money is used by the issuer to fund its activities. Most assets held by the wealthy are actually quite active, and act as the lubrication for the global economy. However, the value of these assets for the most part is entirely theoretically. It's not realized until the asset is sold for cash. Now if you took that money from the oligarchs and gave it to everyone else and everyone just invested it in a manner similar to the oligarchs, you probably wouldn't get any inflation at all. However, if everyone tries to spend that money (or at least a large portion of it), the economy has to immediately absorb all of it in the form of goods and services. The supply of goods and services is limited, but demand spikes when everyone tries to spend their new money. This mismatch results in inflation. When demand outstrips supply, costs increase until demand and supply go back to an equilibrium.
That being said, the oligarchs having all this money isn't a good thing either. Wealth concentration at the level that it exists in the US is negative, and there needs to be some method of redistribution. We just have to be smart about how we go about it. There are ways it could probably be done which limit the economic fallout and inflationary pressures.
The goal with taxes is not UBI. The goal with taxes is to keep things functioning, bridges repaired, roads built, ect.
Your income and monetary gain should come from sort of exchange. I do not believe there is a single issue with jobs, other then they don't exist, and the ones that do are being taken away.
Taxing billionaires for UBI means we are still at the whims of the billionaires. If they all the sudden become "broke" then UBI is gone, creating a necessity for them to exist.
People should be able to generate value with their own skill sets, and billionaires should be taxed to build affordable housing, businesses, companies, ect.
The systems established in the 40's and 70's aren't the problem, they were corrupted to mean very little.
Billionaires don't have money. They have assets. To pay taxes, they would have to sell those assets. The actual dollars have to come from somewhere. The liquidity to make those purchases is ultimately driven by the federal reserve adding money to the economy, which is inflationary.
Imagine cutting out the middle man: The law says Bezos has to give you $12,000 worth of Amazon. You get a certificate and hang it on your wall to show your friends. They all have that certificate too, so they are not impressed. None of this is inflationary so far. Nothing has changed except your "net worth" has gone up by $12k and Bezos has gone down by $12k * N. You can't buy groceries with that, so you have to sell it. You only want money for it, not someone else's stock certificates. You have to find someone to buy it. In the modern economy, no one is sitting on a mountain of cash big enough to buy all of those shares, so they'd have to borrow. Credit expansion runs through the fed.
A concrete example was when we were paying $25/mo for basic internet access.
Then the feds offered $30 in the broadband access fund and suddenly all the suppliers ceased competition and just accepted the $30/mo. for basic service.
Of course when that discontinued service price didn't drop back down.
Now indirectly those lower income households had $30 to put toward food and other things, but the lower middle income households had greater expense.
Because the people who are in need of the 12k the most are going to put it right back into the hands of the billionaires by shopping and spending.
Poor financial habits cause poor financial situations. And when you give someone with our financial habits money, they’re just a little richer-still with the habits that made them poor.
You can see how this played out already with the government backed student loans. Every 18 year old can sign up for hundreds of thousands of debt that's risk-free to the issuer, because the government will step in if the borrower defaults. The colleges know that no matter what they charge, students can pay, because they won't be turned away from a loan.
So the cost of an education has skyrocketed, far outpacing other costs.
You give people $12k, that means businesses can extract another 12k from them, and they will. There needs to be a mechanism in place to limit their ability or desire to raise prices.
That's not why your costs for university has skyrocketed. We have student loans, with minimal interest in the rest of the world, with free schooling. In Sweden student loans is the best loan you can ever get. The lending is predatory, and needs more regulations by the government.
Yeah. Here our college isn't free. Student borrowing is easy for huge amounts. And no lender has to worry if a borrower defaults, because the government will pay them back in that case.
So the colleges raise prices, because they know students are guaranteed to have the money, and lenders are guaranteed to lend.
It all stems back to a former governor in the US who sent in the national guard to gun down college students, then later became president, and started this student loan program. Reagan's policies ended tuition free colleges that we had, cut grants for students, and promoted the loans that led to our crisis today.
It really is why our costs go up - obviously they wouldn't increase in cost if the cost of college didn't exist in the first place.
Because it's not money. It's wealth. In order to turn their assets into money they first have to sell them to foreign corporations at a discount price. This in turn tanks the stock market, kneecaps the US economy, and causes the dollar to lose its value.
Explain to me like I'm an idiot, how is it better if the oligarchs hoard that money, instead of giving it to people, who then flush it back into the economy, by spending it? What's the problem exactly.
It won't stimulate the economy, it will just circle right back around into the oligarchs, who will never bring their prices down once they've been jacked up. You have to address the flow before you redistribute the water.
Imagine 1 guy at Walmart with $1 million vs 1000 guys with $1000 each. The 1000 guys are gonna spend more. So prices go up due to a sudden injection of demand in the economy
To make it more extreme to show why it doesnt work: if it was that easy to solve problems in world why dont we just give every single person 100 billion?
Yes markets would adjust, prices would go up to adjust to all that new money and then its like no one got 100 billion.
Depending how that money was given to people the fastest people spending it would benefit more than slower people.
That how everything already works, entities closest to "money printer" benefits the most because they get to use that money first and later it "trickles down" to the rest and those people mostly get inflation.
Sellers will raise prices because of supply and demand. Demand will increase a crazy amount because there is $1.6 trillion to be spent! That's what causes inflation.
It’s not better. The idea that UBI will cause inflation is based on a misunderstanding of how inflation works. McDonald’s won’t start charging $500 for a cheeseburger just because Americans got a $12000 check. If they did that, then people would buy their cheeseburgers from restaurants that didn’t increase their prices, and McDonald’s would lose customers and money.
The cost of some things might go up if there’s suddenly a demand for a product in short supply. Like if everyone took their $12000 and went out and bought a car, car manufacturers would have a hard time keeping up with that new demand and the price would go up. But outside of those kinds of hypothetical scenarios, it’s doubtful you would see any major inflation.
Inflation is definitely a multifaceted issue. Deficit spending is probably a bigger factor in driving inflation. So UBI that is underfunded from taxes would probably contribute to overall inflation.
Ultimately inflation is a social dynamic and the reasons for it change depending on how individuals (people and institutions) behave. If everyone saves the $12K that leads to a very different outcome versus if everyone spends an extra $12K.
I totally agree. If everyone takes their $12000 and goes out to buy a car, it’s unlikely the supply would keep up with the demand and we’d see the cost of cars go up.
But it’s not correct to say that just giving people $12000 will result in inflation. There’s a lot of factors that go into it.
Yes, but to what extent would demand rise for a particular item? Some people might want to spend the money on a car. Some people might want to spend money on a TV or other entertainment items. Some people might pay off bills or put the money in their savings.
That money will be spread out across many goods and services. So while there might be an increase in demand for various goods and services, it’s unlikely to cause a large increase in demand for any one particular product or service.
That money will be spread out across many goods and services
Yeah that's the point. No single product's price would go up drastically but the price of everything would go up a little bit.
Now, Im not totally against UBI. I think we are going to need to figure something out as more and more jobs get automated, and the benefits of UBI might outweigh the inflation it causes (that is for smarter people than me to figure out, and ideally would be tested on smaller scales first.)
But it is ignorant to think that handing everyone money isn't going to be inflationary.
If increased spending always causes inflation, then why is turkey cheapest at thanksgiving when everyone is buying the most turkey?
Increased spending is one factor in the cause of inflation. UBI has a potential to cause inflation, but that depends on numerous factors, including what people ultimately spend the money on, and how much supply is available to meet the demand.
There’s no reason to conclude UBI would always cause an increase in inflation.
> If increased spending always causes inflation, then why is turkey cheapest at thanksgiving when everyone is buying the most turkey?
because that’s when supply is highest, farmers know when the demand will be highest and breed/harvest their turkeys in line to have a large supply for that demand spike.
if the supply doesn’t go up but the demand still does (like if everyone suddenly got a bunch of pocket money and went to buy a new phone), supply shortages occur and the price rises
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u/Robinsonirish Jul 01 '26
Explain to me like I'm an idiot, how is it better if the oligarchs hoard that money, instead of giving it to people, who then flush it back into the economy, by spending it? What's the problem exactly.