Universal Basic Income vs Deflation

I am a supporter of a form of Universal Basic Income — UBI. I concur with some of Bill Stinson’s arguments and not others.

I am a C# .Net contract programmer and I see what is happening first hand. I am working on a cloud based system at the moment which could put 1 million people out of a job. I also have a reasonable grasp of economics and understand how money is created by Reserve Banks and major banks by Fractional Banking.

I believe deflation is the biggest issue of our time because it is so hard to stop and UBI represents an opportunity ease the money supply is such a way that the money is spent.

Quantitative Easing has been a complete failure at stemming deflation just as all “trickle down” economics have always failed because nothing ever trickles down. UBI eases the money supply directly to the bottom.

UBI replaces welfare and saves the State the enormous cost of administering welfare. All those departments can be shut down. People can make better decisions about what to spend the money on than the State and the vast majority will use it wisely.

Humans have basic needs that they give top priority to before any creative activity can happen. The two top basic needs are “safety and security” and “food and shelter”. UBI can create a security level around these basic needs freeing the person to pursue activities that improve their life.

UBI should not come from taxation or borrowing, it should be printed by the central bank with no government involvement and should represent about 5% of GDP.

Lastly deflation is not going away anytime soon and UBI is a positive force against deflation. I believe deflation is here to stay because we have a global ageing population and this group do not spend. Simply look at Japan!

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