Very few people are actively starving. A lot of people have food stamps already, and UBI eliminates them. With a UBI, and the hopeful cultural normalization of utilizing resources over being "poor", you can better optimize the use of excess foodstuffs that end up in food trucks and banks that not enough people can use all the time.
Food prices are always in a balancing act. Premium goods like beef and lobster fluctuate based both on the amount of money in the market for them, that can spur investment in increasing supply, or in the amount available, that can vary significantly depending on seasonal yield (moreso in lobster than cows). If a UBI increases the food spending budgets of the poor, they start buying more lobster and sirloin, and the prices go up. Then the market is up on those goods and more will be produced because the cost of manufacture probably didn't go up - the poor weren't suddenly demanding tractors or rural farmland or grain feed - meaning you still have the same net cost to manufacture, so the supply side pressure is there to increase the supply to meet the demand. Prices normalize again as a result of that, and they would not be dramatically higher. It depends on the total sum of social desire for these products relative to their competitors. If people start eating more beef, the price of chicken might drop in response and pressure people into maintaining the natural balances and optimizations around what the market can best provide at the cheapest prices.
> Rents will go up... about work income as much.
Housing is in balance now between rural and urban, and it would be after UBI. If rents get too high in cities (or just more generally, wherever the poor want to be) there is a cost ceiling where they will start inhabiting the dirt cheap rural towns that have been abandoned for decades because it is infeasible to live there without an income. Overnight, millions of unoccupied and unlivable houses become usable again.
> Alcohol and tobacco will likely get more expensive as well.
Luxury goods go up in price. The world isn't hurt at all for this.
> you'll still have higher prices in the long term
UBI has an economic effect you can see in food stamps now. The market treats food stamps as a price floor - they know that the worst their customers can be is on food stamps, so they price accordingly because the amount of money in the food stamps system is huge. As long as they can make any profit at the prices food stamp recipients can afford, they will compete in the market for their money.
The exact same would happen with UBI. Suddenly even the poorest person has a market voice, and there are still enough poor people - the median US income right now is only about 4k a year over the poverty line - to influence markets with their size, if not their density of money per person.
Inflation is not magic. The inflation in the US right now is from expanding the monetary base. If the federal reserve stopped printing money entirely, inflation would slow or stop. You would certainly see inflation immediately after instituting UBI - because suddenly billions of dollars effectively frozen in the stock market and trading in economic circles outside of the general consumer market are moved back into it - but it would not cause sustained inflation if you are just moving around funds in the economy that already had velocity. And even then, it would not be a severe jolt - billionaires don't just hoard benjamins under their mattresses. They invest them in companies that spend the money. Unless you are Apple or hoard billions overseas, but those are generally the exception to the standard rule of money in your pocket is money lost. The velocity would go up, but not tremendously, in ways that can destabilize an economy.
And that price floor that UBI sets puts tremendous pressure on businesses to meet demand at the price level. Properties would be built and refurbished to accommodate that income bracket. Food production would insure that food is available at that bracket. And of course vice and luxury will try to price themselves into that bracket. Because it would be billions of dollars of demand - you can't just ignore it - but because the UBI income puts an effective ceiling on costs that people can pay if they have no other income, that pressure fixes prices to that income threshold. It wouldn't respond instantaneously - you could and would see examples of people not being able to afford living off UBI in isolated years - but those are from market variability. The prices will either drop to get their money, or they will move where they can. And the US is big enough that we won't have a shortage of places to go, like we do right now where the limiter is a drying up pool of job offers.
Very few people are actively starving. A lot of people have food stamps already, and UBI eliminates them. With a UBI, and the hopeful cultural normalization of utilizing resources over being "poor", you can better optimize the use of excess foodstuffs that end up in food trucks and banks that not enough people can use all the time.
Food prices are always in a balancing act. Premium goods like beef and lobster fluctuate based both on the amount of money in the market for them, that can spur investment in increasing supply, or in the amount available, that can vary significantly depending on seasonal yield (moreso in lobster than cows). If a UBI increases the food spending budgets of the poor, they start buying more lobster and sirloin, and the prices go up. Then the market is up on those goods and more will be produced because the cost of manufacture probably didn't go up - the poor weren't suddenly demanding tractors or rural farmland or grain feed - meaning you still have the same net cost to manufacture, so the supply side pressure is there to increase the supply to meet the demand. Prices normalize again as a result of that, and they would not be dramatically higher. It depends on the total sum of social desire for these products relative to their competitors. If people start eating more beef, the price of chicken might drop in response and pressure people into maintaining the natural balances and optimizations around what the market can best provide at the cheapest prices.
> Rents will go up... about work income as much.
Housing is in balance now between rural and urban, and it would be after UBI. If rents get too high in cities (or just more generally, wherever the poor want to be) there is a cost ceiling where they will start inhabiting the dirt cheap rural towns that have been abandoned for decades because it is infeasible to live there without an income. Overnight, millions of unoccupied and unlivable houses become usable again.
> Alcohol and tobacco will likely get more expensive as well.
Luxury goods go up in price. The world isn't hurt at all for this.
> you'll still have higher prices in the long term
UBI has an economic effect you can see in food stamps now. The market treats food stamps as a price floor - they know that the worst their customers can be is on food stamps, so they price accordingly because the amount of money in the food stamps system is huge. As long as they can make any profit at the prices food stamp recipients can afford, they will compete in the market for their money.
The exact same would happen with UBI. Suddenly even the poorest person has a market voice, and there are still enough poor people - the median US income right now is only about 4k a year over the poverty line - to influence markets with their size, if not their density of money per person.
Inflation is not magic. The inflation in the US right now is from expanding the monetary base. If the federal reserve stopped printing money entirely, inflation would slow or stop. You would certainly see inflation immediately after instituting UBI - because suddenly billions of dollars effectively frozen in the stock market and trading in economic circles outside of the general consumer market are moved back into it - but it would not cause sustained inflation if you are just moving around funds in the economy that already had velocity. And even then, it would not be a severe jolt - billionaires don't just hoard benjamins under their mattresses. They invest them in companies that spend the money. Unless you are Apple or hoard billions overseas, but those are generally the exception to the standard rule of money in your pocket is money lost. The velocity would go up, but not tremendously, in ways that can destabilize an economy.
And that price floor that UBI sets puts tremendous pressure on businesses to meet demand at the price level. Properties would be built and refurbished to accommodate that income bracket. Food production would insure that food is available at that bracket. And of course vice and luxury will try to price themselves into that bracket. Because it would be billions of dollars of demand - you can't just ignore it - but because the UBI income puts an effective ceiling on costs that people can pay if they have no other income, that pressure fixes prices to that income threshold. It wouldn't respond instantaneously - you could and would see examples of people not being able to afford living off UBI in isolated years - but those are from market variability. The prices will either drop to get their money, or they will move where they can. And the US is big enough that we won't have a shortage of places to go, like we do right now where the limiter is a drying up pool of job offers.