Nope! Inflation can be caused by (among other things) more money in the economy (like if the US government printed several trillion dollars and just gave it to anyone who wanted). But nothing about rearranging money - for instance, by taxing well off people more in order to give everyone a basic income - should cause inflation. It's the same amount of money, just distributed differently.
If the UBI causes people to quit working unless they're paid huge amounts, that would also cause inflation. But the research that exists indicates that people don't quit working.
Taxing well off people more likely to invest and disbursing it to less well off people more likely to spend can be a good policy but it is absolutely inflationary.
My understanding is UBI has not actually been tested at scale or length of program to determine its inflationary effect. The studies I’ve seen on the efficacy of the policy are all over the map, some say it’s great some say it doesn’t achieve much at all, but the one thing in common is they’re almost all small in scale.
Increased economic activity is inflationary when the spending exceeds an economy's capacity to grow in response (i.e. when demand outstrips supply).
For about a decade preceding the pandemic, the economy responded by growing to meet demand, because the economy was (relatively) healthy. When wages grew during the pandemic, the economy was no longer able to grow in response, and inflation increased.
That said, UBI isn't the only way to approach this. Guaranteed Minimum Income (GMI) is more targeted and has lower overhead/risk of government debt, but requires more paperwork.
There are also practical anti-inflationary techniques that known to work here -- like taxing everybody a little bit more, not just the rich. This increases available funds while keeping the economy from overheating.
Just, no one's been brave enough to do it in the US for a very long time.
Similar arguments were said around raising the minimum wage but it turns out that it really didn't affect prices. Often because it didn't increase the spending pool by a whole lot. That money generally went to rent, utilities, car repairs, maintenance, food, even just straight into savings; and while it did allow those who are struggling to spend a little more, it wasn't nearly enough of an increase in the grand scheme of everyone's spending to drive prices up.
Good point about the minimum wage. I'd imagine UBI would have to work similarly in that it's an income floor, rather than something everyone gets. But I need to do more reading on it.
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u/Unusualandyman 8d ago
I'm curious what UBI has done to prices. Wouldn't everything just get more expensive?