The federal government recently printed $4 trillion for the bank bailouts in its quantitative easing program with no inflation. Our plan for a Universal Basic Income uses mostly money already in the economy. In monetary economics, leading theory states that inflation is based on changes in the supply of money. Our UBI plan has minimal changes in the supply of money because it is funded by a Value-added Tax.
It is likely that some companies will increase their prices in response to people having more buying power, and a VAT would also increase prices marginally. However, there will still be competition between firms that will keep prices in check. Over time, technology will continue to decrease the prices of most goods where it is allowed to do so (e.g., clothing, media, consumer electronics, etc.). The main inflation we currently experience is in sectors where automation has not been applied due to government regulation or inapplicability – primarily housing, education, and healthcare. The real issue isn’t Universal Basic Income, it’s whether technology and automation will be allowed to reduce prices in different sectors.See more FAQs