Could a universal basic income cause massive inflation?
- Basic income
Real-world evidence suggests that basic incomes actually decreases inflation.
If basic income leads to increased demand of goods and services, we would only see prices increase for those where supply cannot increase to match the new demand. So rare/luxury items might indeed go up in price, but basic essentials would not.
Basic income should actually be indexed to match or beat inflation.
If a basic income were able to pay for itself through a value added tax, the liquidation of other social services, and a general stimulation of the economy, the money supply circulating in society would not increase substantially. This would produce little to no inflation.
Basic income could actually result in increased wages more than increased prices.