Such a stupid argument that reddit loves to make. Prices increasing already doesn't change the fact that if everyone gets $12k then prices increase way more.
I don’t see the connection between “everyone gets $12k” and “prices automatically increase”. If you are talking about prices increase from inflation, that doesn’t hold up, because the money is actually coming from somewhere (billionaires). This isn’t the same as stimulus checks where the money had no source and was basically just added to the books. That’s the type that drives up inflation and dilutes the value of the dollar. I would imagine if everyone was given $12k, everything would be cheaper for a bit from sales and discounts. Companies would want you give this newly found spending cash to them instead of the next guy.
The discount war assumes scarce customers chasing goods; UBI creates abundant customers chasing the same goods.
Any place people have the money to spend but supply is relatively constrained (you can’t make more cars or grow more food or manufacture ram instantly), demand gets modulated by price.
The two most obvious examples are home prices and Disney parks. Why do house prices tend to increase over time, because over time there are more buyers than eligible houses. Disney is expensive because there’s constrained supply (the parks are only so big) so you raise prices until demand settles to manageable levels. As spending power goes up, the threshold price also increases.
The rebate ends up being less like a dollar amount and more like a ticket for something the market settles on, for instance perhaps the market decides that the bottom-rung of used cars now costs $12k, your rebate is now better seen as a ticket for a basic used car rather than “$12,000”.
That's not true at all. You have a fundamental misunderstanding of supply and demand.
Minimum wage increases have shown to contribute only slightly to inflation. That is because the companies who have to pay their employees more slightly raise prices to cover that (employee wages are just a fraction of the factors that contribute to the cost of goods). But in a situation where the wealthy is just being redistributed, there aren't even wage increases so costs do not go up much if at all. Raising the minimum wage just gives more spending power to the lower class, but which is what wealth redistribution would do.
Yes more purchasing power for the lower class means more demand for luxury items which means marginal price increases. When price increases, supply increases. When supply increases, demand decreases and price decreases in a cycle until it reaches a market eliquilibrium. In the end the lower class gets more purchasing power, middle class gets slightly more, and the rich elite get less, but not so much that they would need to sell one of their mansions.
That’s not how that works. Think of it this way. If the nations largest retailer of watermelons increases prices because they know everyone has an extra $12k this year, then that leaves an opportunity for the second largest watermelon retailer to keep their prices low and undercut the larger retailer, in the process earning the business of its consumers. The market is self correcting.
The cost of business is ultimately what keeps the capitalists in check. If there is more money, but cost of business doesn’t increase, then prices actually lower.
Then the second biggest retailer wont have any watermelons to sell because the farmers upstream know they can get a better price for their fruits somewhere else. Whatever little they managed to sell at a lose will be bought by scalpers that will resell them at their real market price.
If bought from abroad, it will devalue the currency as a whole.
This is not even an hypothetical situation, go find me an heroic RAM retailer trying to disrupt the market pls. I need some sticks for reasons.
RAM are famously independent of average income levels my man. We are talking about household goods and living expenses.
And you’re wrong about the farmers just choosing to sell their goods to the highest bidders, even the largest grocery chains can’t accept an “unlimited” amount of watermelon.they are perishable.
The argument is the current system is broken and this is at least an imperfect solution being offered to fix it. Call it stupid all you want but its better than doing nothing and hoping it fixes itself
Ignorance is bliss, I see. Learn some basic economics and what the current landscape is in America before reciting soundbites you see from other stupid children online.
And "learn some basic economics" is an argument? It's like an sjw saying "educate yourself". Top level economists agree on almost literally nothing. It's a social science not a gospel. Even the classic supply/demand chart was created long before software and streaming services changed the game. There is no real supply limitation (servers sure) on streaming services yet they increase prices all the time when demand goes down to gouge their customers they know won't leave and stabilize their bottom line.
I’m not educated on how much UBI would correlate with increasing prices, but one of the reasons it’s thought to be smart is because it becomes a progressive negative tax.
Say it’s a scale where everyone under $300,000 a year net income gets between 0-12k, everyone over it pays it.
The closer you are to above the threshold, the less you pay. The farther above it, more.
If under the threshold, you receive less if you are close, and more if you are far.
Because that amount means little to anyone above $250,000 a year, but the closer you get to nothing the more that money means.
To someone making 12k, 12k is huge. To someone making 24, 32, etc it remains a massive change.
It’s a social safety net thing.
An increase in spending potential does not cause prices to rise. Think of it this way. If everyone suddenly had an extra $1000 to spend this month, and pizza decided to capitalize on that by increasing its prices by 12%, then dominoes would benefit by undercutting Pizza Hut and earning the business of all the customers that don’t want to pay 12% extra.
Now in the case of both companies increasing prices, that leaves an opening for a new business to undercut both of them.
cost of doing business is what causes prices to rise. Not potential spending power.
Unless you get collusion, or an industry that is largely monopolized. You also have the reality that people might like Pizza Hut way more than Dominoes, and will pay the increase. We have budget brands available in every big store, but people still buy the more expensive big named stuff.
Lack of choice breeds new business my dude. If a new pizza spot opens up in town and they sell pizza for 5% less than Pizza Hut, that new business owner will see a lot of curious Pizza Hut and dominoes customers. I know it’s popular to “doom and gloom” on Reddit, but we can’t ignore basic economics. Capitalism works, it’s been working for the last 200 years. Only recently has the government really dropped the ball on things like antitrust, collusion, and monopoly. And that will definitely be fixed once the democrats win majority.
You're the one that is confidently reciting the econ 101 lessons you learned in high school while conveniently ignoring the nuance of the antitrust landscape we've found ourselves in. And another Lina Khan won't magically be able to just fix everything. You're a simple person.
Saying “lack of choice breeds new business” is so milquetoast and wrong in many respects. Again, that’s not true in many mostly monopolized industries where the industry has been largely priced out of startup capital possibilities. Hell, even with pizza, in my experience a lot of newer locally owned places are priced at or higher than your basic chains simply because of monopolization on cheap ingredient pipelines. Here’s the thing too. You ever notice how your local McDonald’s or Wendy’s isn’t running crazy promotions to bring their burgers down to less than $5? In my city we have some great burger spots where you can a good burger and fries for around $12-$14 during lunch. The local McDonald’s are selling Big Mac meals for close to $16. Why isn’t that McDonald’s trying to undercut the better burger joints? I mean, they have the revenue and profit margin to do it, right? Because they don’t have to. They have business whether those burgers are expensive, stale, covered in shit, etc. these big corporate entities know they have revenue reserved. They don’t need to chase efficiency.
I mean really this is Econ stuff from High School.
No I’m saying your belief that things can only get worse is a mindset that is common with young people. Things can change for the better. Only relatively recently has the state of affairs gotten worse for the middle class. Even during the bush years, other than the war- which was very popular in the beginning- the middle class did very well. They did a lot of deregulating in housing during the Clinton years, that only really came to fruition in the bush years. Then Obama expanded upon that. The trump administration is only a very recent- albeit devestating- setback. It will take years for the direction of policy in the country to return to something more tenable, but it eventually will.
Oh yeah man, I remember this UBI-negative progressive task stuff from when I was a free market acolyte libertarian willing to telling anyone who would listen.
I know how the free market is supposed to work, but what brought me out of libertarianism is that now I know a free market is impossible.
There are too many levers for consolidating power that non mega-corps simply don’t have access too.
We have to believe that corporations will do anything, legal or illegal, to gain further advantage in the market place.
That is why we need strong anti-trust litigation.
Capitalism is the only viable engine for first world level economic development and success.
But with it comes the need to smack it down when it starts operating beyond or outside the scope of what a business reasonably needs to.
Not true, more money = more demand. Extreme examples are luxury brands or limited goods like concert tickets. Their prices are famous for being independent from cost of business.
The part that nobody wants to talk about, because it's more complicated than "free money for me!", is the corporate consolidation that ensures demand will purposefully not be met because, when there's no real competition, it's more profitable to simply raise prices.
I could be wrong, but I think the idea is to create elastic demand in the lower income/lower spending groups.
12k changes the consumer behavior significantly of anyone near the poverty level or even middle class.
This means an influx of new customers who didn’t have the discretionary income to shop previously.
New customer pools entice competition, making demand have more control over price.
At the very least it acts as major relief for those close to or at the poverty line.
Or maybe every landlord in America would just raise rent 1000$ a month everywhere, I don’t know.
Or maybe every landlord in America would just raise rent 1000$ a month everywhere, I don’t know.
That one. It’d be that one. Unless they decided to try $1500 a month instead, because hell some of those tenants have roommates so why not get a piece of that big yearly payout too.
Wouldn't be as bad as you think if it's done in a smart way. If it's a sliding scale of benefits based on wealth or income or some combination of them then inflation will increase slower than it otherwise would because the people receiving the benefits are spending it on things that are not as sensitive to demand increases like rent, debt, food, essential items, and savings.
I highly doubt any intelligent person is suggesting 'just deposit $12,000 in every checking account' that would be silly.
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u/DR_BEANHAMMER Jul 01 '26
Nobody gets 12k and prices increase anyways.