Andrew Yang answers Will the Freedom Dividend cause inflation or cause landlords to raise rent?

[redqueen]

[wasupaloopa]

1. If the base is zero and everyone gets $1,000 the base

becomes zero + $1,000.

All costs will rise with the rise in the base.

People will spend the $1,000 causing more demand. Supplies will have to catch up since they lag demand. Increased demand causes prices to rise because they can be raised.

To think that giving everyone $1,000 and everything else remains stationary is naive.

When government wants to stimulate the economy they give money to everyone. Governments know people will spend causing demand which is the stimulus to the economy.

Of course prices go up!

I think this is the problem with many “progressive” ideas. Their authors act as if the change lives in a vacuum where only benefits flow from the change.

[Cuthbert Allgood]

2. He's not saying we need the $1000 to stimulate the economy

He has very different economic reasons. He makes a compelling case.

[wasupaloopa]

8. I never said he did. It will have the same effect!

Why on earth do you think the government giving money to people can have two distinct effects?

[Cuthbert Allgood]

14. Because when you understand his reasoning, it points to a need for the money.

We aren't going to have that money in the economy for reasons he discusses, so the complete opposite of what you discuss will happen (being overly simplistic for a discussion post, of course). The money he wants to put into the economy, if he is correct, will stabilize things and not tailspin us like you indicate.

So, know his reasons for why he is doing it impacts the economic impact of the plan.

[redqueen]

3. He never said everything remains stationary.

Many economists support this idea.

[wasupaloopa]

9. So what? Nothing I said is refuted.

I heard him say that if you give money to a truck driver and that truck driver gets laid off he will have the $1,000 a month he saved to fall back on.

That is one of the dumbest things I ever heard a candidate say.

The truck driver will have spent the $1,000 a month as if it was a raise! People who are not wealthy raise their standard of living to match their income.

[redqueen]

10. I've never seen an economist say that consumer spending

is bad for the economy.

I'm not an economist, but I'm gonna go ahead and take the word of the ones who are supporting the idea of UBI.

[wasupaloopa]

11. Who said it was? I am saying based on the economics

I was taught in college by economists, that giving money to people raises prices!

The outcome is the same as if no money is given.

People will be in the same economic position as they were without the UBI.

Yang says it doesn’t.

[redqueen]

12. Well, again, economists are supporting the idea,

and Yang has a degree in economics as well, so...

[wasupaloopa]

13. Can't we use critical thinking to analyze this or

do we take the word of the portion of economists that support it without us thinking?

[Cuthbert Allgood]

15. I'm just going to throw Dunning-Kruger into the mix here.

I mean, yeah, you took a whole college econ class (so did I), so why should we just listen to people that are economists when you think something is true.

[redqueen]

21. This made me chuckle :)

Thanks

[TreasonousBastard]

4. He's got some pretty good answers, but...

I'm trying to find some numbers where Italy tried this maybe 10-20 years ago (I think it was a "Christmas Bonus&quot and prices spiked.

If he's right about those three primary drivers of inflation (and he probably is) then concentrate on reducing those costs. None of them actually respond to the microeconomic forces increasing incomes should affect. All three of them have very restrictive limits, most of which we would probably not want to eliminate.

He is a bit off the wall on housing, though-- "communal housing". Yeah right.

[redqueen]

5. Yeah I was surprised to hear that about communal housing

normally he talks about zoning, which I find very refreshing, because that does need to be addressed.

[Cuthbert Allgood]

16. Do we see that in Alaska?

They all just got their $1700 dollars a while ago. Their prices are higher but that has more to do with location, I think.

[TreasonousBastard]

17. Prices are higher because of costs, but that 1700 bucks isn't...

12,000 bucks. And, if it makes any difference, that $1700 is supposedly income from oil royalties, not from general revenues.

I don't have time today to look into it any further, though.

[Cuthbert Allgood]

18. I don't think it matters where it's from to look at the impact.

And, sure, it isn't the same amount of money, but if it is correct about what that will do the economy, we should see that at a smaller level with this money getting pumped into the economy.

[TreasonousBastard]

19. Maybe, but it's too complicated for me to think about today.

[Cuthbert Allgood]

20. I don't know that I have the skill set to actually, correctly thing about it :)

I do know that my son who moved to Alaska said the day after the checks came out is not the day to go to Costco.

[dsc]

6. His education answer leaves out an immense driver of public university cost

states have stopped funding them like they used to. States used to pay close to 2/3 of the cost of public universities with students and parents paying 1/3 that has flipped or worse. That is a huge part of the story.

[redqueen]

7. Yes that is definitely a factor.

If I'm not mistaken, it was Reagan who first started cutting back on those investments as governor of California, and other state governments followed his lead.