Thank you for asking! I have a pretty fundamental understanding of economics.
This link answers your question pretty thoroughly.
But the short answer is: NO. Basic universal income is not the same as “printing money” so to speak, and inflation is not guaranteed. It simply redistributes money that is already in circulation more evenly. In fact, we have REAL WORLD EXAMPLES of places that have Basic Income systems or partial basic income systems that have seen very little, or NO increases in inflation as a result!
In that link I provided, for example, it cites two examples: “In 1982, Alaska began providing a partial basic income annually to all its residents. Until the first dividend, Alaska had a higher rate of inflation than the rest of the United States. But ever since the dividend was introduced, Alaska has had a lower rate of inflation than the rest of the United States. A partial basic income was also provided in Kuwait in 2011, when every citizen was given $4,000. Fears of increasing inflation were rampant, as Kuwait already had high inflation. Instead of bad inflation getting worse, it actually got better, decreasing from record highs to under 4 percent.”
This doesn’t make any sense to me honestly, first off where are you getting this money from. Secondly how can you sit there and hand money to people even if they don’t do anything. And finally wouldn’t that drastically affect the loanable funds market causing weird shit to happen to our banks?
It seems like you don’t know a lot about this. Here are some helpful links!
The wikipedia article on Basic Income.
Thinking Utopian: How about a universal basic income?
The Economic Case for a Universal Basic Income (Part 1 of a series)
How Universal Basic Income Will Save Us From the Robot Uprising
To answer some of your specific questions.
1) Where does the money come from? The money already exists. It comes from a number of places. Firstly, by discontinuing many current welfare systems that would no longer be needed under the new Universal Income System, you could redistribute that revenue into the Basic income fund. Also, taxes.
2) How can we give people money for doing nothing? By just….doing it? Like, just…giving people money. It’s not really a hard concept. Alaska already does it. And in fact, with growing automation in the labor force, human unemployment is going to be an increasing problem without a Basic Income system, so just giving people money is a great way to keep our economy from completely tanking. This video called “Humans Need not Apply” goes into a lot of detail about the future of labor with automation, actually.
3) I’m not an expert on how this would directly impact loanable funds, or if it would have any specific impact on loanable funding. I don’t see a direct correlation there, but it’s possible one of the links I provided can help you answer that question. As I said in my first reply, this system and systems similar to it have been put in place already in some areas with great success. It’s very viable, and in MANY cases it is MORE efficient than the labyrinth of welfare services we have in place now.
When this was tried in a small town in Canada – look up Mincome – it resulted in:
1. An increase in high school graduation rates.
2. A significant decrease in domestic violence.
3. A significant decrease in, believe it or not, traffic accidents.
Only two groups of people left the workforce to “laze around” on basic income. The first group was high school students – see point one – nope, not lazing around. Studying.
And the second was women in their third trimester or within six months of giving birth – they were not lazing around either, but using the system for paid maternity leave.
While there is enough work for people to do, they won’t laze around.
As the labor surplus increases and there ceases to be enough work to go around?
People will find other stuff to do.
As for how you fund it?
Here’s how:
1. It replaces all existing welfare programs except for Medicare/Medicaid (which should also ideally be expanded to cover everyone). This would save tremendous amounts of money currently spent on, for example, denying somebody disability and forcing them to appeal in the court system multiple times. Or establishing who deserves food stamps.
2. Instead of taxing the income of workers, you tax the income of corporations. Remember that as technology replaces more humans, corporate profits will increase. Corporations that have employees will be obliged to pay a basic income tax that essentially covers the basic income paid out to those employees.
And, I firmly believe that we will be looking at a disaster if we do not implement basic income.
The truth is that the amount of labor needed to be done by humans, as opposed to robots, is dropping all the time. The population is stable or rising slightly in the developed world (The rest of the world is rapidly catching up with us). The truth is that a lot of people are already being paid to do makework.
A basic income that is set to ensure survival (food, clothing, shelter, communications) and just a little more will establish a society in which having a job is not required to stay alive. Sure, that’s paying people for “doing nothing.”
Really?
It’s paying them for raising children. It’s paying them for educating themselves. For writing books. For drawing. For, heck, streaming themselves playing video games.
When the robots do all the work, one of two things will happen:
1. We’ll try to continue with capitalism, and end up with a disenfranchised underclass, bound up in hideous restrictions to earn their welfare (or simply allowed to starve). (I touched on this in Saturday Night At The Wonderland Club).
2. We’ll switch to a new system that works on the assumption that robots will be doing most of the work, and that system will free human beings to play.
But, uh, play?
Yes, play.
Play develops intelligence. Human beings freed to play, study, and discover may just discover things that will send us to the next level. Did you know that being broke drops 10 to 20 points off of your effective IQ? Imagine what not having to worry about money for survival does?
Yes, I feel strongly about this. But I’m also afraid that if we do not move to BI or some similar system our world will go down in flames.
Oh, and let me address the last complaint, not mentioned, but often aimed at Basic Income: It’s communism.
Nope.
Basic Income is very much not communism. It is socialistic at some levels, but communism and systemic socialism both involve central planning. If somebody wants to screw their life up by buying booze instead of paying the rent under this system? Their problem. Basic income actually frees people to be closer to the sovereign individuals of libertarianism.
So…yeah.
Well said.
I like this idea
I’ve talked to a few libertarian-leaning friends of mine about this, and they’ve all sort of come around to the idea. By providing everyone with this basic safety net rather than parceling it out only to those who are in need, it eliminates the need for a bureaucracy to establish and investigate who needs it. It also removes the stigma that many people feel – and some states actively enforce – of needing public assistance.
In the libertarian-actually-libertarian circles I follow (as opposed to corporatists, and yes, there really is a difference, guess which one is the smaller group 🙁 ), this idea has gained a lot of currency. As in, they really seem to get it. As in, if even they’re onboard, this might actually be a way forward.
Social conservatives (who mostly rely on “I’m not happy unless someone else is suffering” types) will, as always, be a huge roadblock. That can be leavened with, “Since everyone will get it, you’ll still have exactly as much more money than they do as you have now.” Just not put that bluntly, because they don’t like their motivations being thrown into their faces. (To be fair, that’s true for a lot of people.)
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