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Matt Ventre


What are your thoughts on universal basic income?

We need to think beyond the dollar to address the UBI question.

What are your thoughts on universal basic income?

    1. UBI seems good on paper, but is radically inflationary.

    Compare it to the stimulus packages over the past 3 years. Yes, they alone are not responsible for inflation. It was a confluence of scenarios that created that result; however, more dollars chasing the same amount of goods will create inflationary pressure.

    2. Inflation will cause a payment hike spiral.

    As the cost of living increases, so too will UBI payments. This tracks regardless of the positive feedback loop caused by UBI payments, but will happen at a greater rate. COL/CPI goes up, UBI goes up forever.

    3. Inflation could be offset by equal measures of deflation through automation.

    One argument for UBI is that AI or automation will take jobs of human workers, putting them out of the labor market for good. Automation produces deflation, so even if prices were to rise in some sectors as a result of UBI, automation might make other goods and services so cheap as to counteract the pressure of constant dollars flooding the marketplace.

    4. UBI might promote a class of lazy, unmotivated people.

    The bad news is this already exists. I don't think this changes the rate at which people choose to live mindless lives chasing the next dopamine hit. It would just create an antiseptic for the painful reality of having to "get a job" to pay for Netflix.

    5. UBI might increase workplace happiness and productivity.

    Imagine a workplace where the people who are showing up for a paycheck who do no real work or produce misery for you aren't there anymore. The only people around are the people who want to be there and do a good job. Might be a huge win for workplace happiness.

    6. UBI might unleash the true creativity of minds that are otherwise preoccupied with survival instead of creating world-changing art, business, science, thought, spirituality, and progress.

    There's a spark of the infinite divine of creativity within all humans. The trick is nurturing that into a raging inferno that promulgates across all of humanity into something that brings us closer to our collective purpose. This is impossible for people who by luck of the draw or by circumstance might be less able to harness that power because they're constantly struggling to survive. Will it be universal? No, probably not. But if we create 1% more beauty and progress, that compounds.

    7. UBI is just another political baton to beat the other team with.

    Yes. And...

    8. UBI doesn't need to be paid in dollars.

    A secondary currency (blockchain based) shelters UBI from the dollar market and allows the administration to curtail spending on dangerous goods and services. Yes, this sounds like the SNAP program. Yes, this is nanny state stuff. Hear me out: UBI needs guardrails. Free money for anything makes all markets explode, including black markets, drug markets, prostitution markets, human trafficking, markets, and vice markets. If you say UBI can only be used for housing, food, clothes, transportation, and limited forms of entertainment (Disney, Netflix, HBO will all lobby to have UBI currency allowable as payment for their services and they'll win - okay, I'm okay with this) then you have a chance to keep taxpayer money out of the hands of criminals and promote somewhat reasonable behavior. Want to gamble? Want cigarettes? Well, get a job or....

    9. UBI currency can be sold and traded openly on a marketplace.

    Businesses that accept UBI can directly redeem currency from the treasury for a set market value (like the Fed sets the rate of redemption, and you accept that) OR you can sell the currency on an open marketplace. Why would you do that? What if the UBI currency could be traded and held, used to cash in when rates go up (some institutions would gobble up huge buckets of currency waiting for rates to go up and sell for profit) or UBI could be transferred to time-deferred bonds with guaranteed payouts (like you buy a 5 year UBI bond with a guaranteed payout of % in dollars based on the current rates). That means...

    10. UBI makes for another investment vehicle for smart businesses.

    Imagine you're a landlord. You can choose to accept UBI from any or all of your tenants (maybe there are restrictions for Section 8 housing, etc.) You decide that you want to accept 50% of your income as UBI and 50% as market-rate rentals in dollars. You now have the ability to play in two markets with one operation (technically 3). 1) You can compete in the rental market for renters who want to live in your building- this forces landlords to be competitive and rent only better properties because hey, you could just take 100% UBI and be done with it and so can other places, but if you want highe rrates and better tenants, renting in dollars means you have to compete with UBI and other landlords. This is a boon for renters and for landlords.

    11. Continued...

    2) You decide you want to cash in 50% of your UBI at Fed rates. Let's say 1 UBIbuck = $2 (I have no idea why it wouldn't be pegged, but whatever go with it). You price your units competitively on the UBI market and they fill up immediately. You can cash in your UBIbucks at $2 a piece and that's great. The other 50% you decide you can play with a little

    3) If you can afford to, you HODL those UBIbucks waiting for Fed rates to go up (they could go down, so this might be risky) OR you can put them on the open market and try to sell them at a higher rate from people who are going to HODL them until fed rates go up later. You might get a profit from this. You also don't have to - you figure out your risk tolerance for UBIbucks holding and go from there. You might decide you want to only accept UBI certain years - that's cool because you know all of your tenants are getting UBIbucks anyway, so they might want to spend them on rent instead of food or whatever. Your high value renters, entrepreneurs, investors - they're probably using their UBI to cover base expenditures and then using the rest as investment vehicles themselves.

    12. The new marketplace introduced by interweaving UBI with dollars creates new industry and financial innovation.

    And people who just want to watch Netflix and sleep all day can do so without having to bother the go-getters who are building the next generation of financial technology.

    13. One more human behavior safeguard...

    You might think: yeah, so if UBI on the open market goes up won't everybody just want to sell their UBIbucks to the highest bidder? Of course, BUT if you create friction to do so, the people who would otherwise want to spend their dollars on bad stuff probably aren't going to go out of their way to create an account, submit paperwork, verify their identity, place their UBI on a market, make a transaction, confirm it, cash it out and THEN PAY TAXES ON IT.

    They're going to go: "Uh, I think I'll just auto re-up my Netflix account and order Doordash - I don't have the energy to go to all that trouble to sell this for cash so I can buy cigarettes. I like my 8 hour a week job at the grocery store and that's enough to buy the smokes. No need to be a daytrader."

    This, of course, produces more avenues for fraud or a secondary UBI-flipping industry, but again, if you make it impossible to transfer your UBI to other people (unlike crypto currently, where you can send anything to any address) - you can only transfer it to authorized and vetted vendors or businesses (and those shady dealers wouldn't become authorized in the first place) then you can't just give your local flipper your UBI for dollars like a dirty predatory Checks Cashed Here shop. And that friction is super important.

    14. States and localities can use UBI law to compete with each other.

    Instead of the Fed having all the power, which is a bad thing, states can enact and control their local UBI regulations to a degree to compete for people and resources. Example:

    The state of North Borkia says, "All landlords must accept UBI from 100% of their tenants, but they are free to set rates at their discretion in dollars." That is: a landlord has to accept 100% UBI from anyone who wants to rent from them as payment for the rental, but they can also price their units above UBI + dollar pricing for a sum total that costs 100% of someone's UBI payment + a portion of dollars.

    Bills' Apartment Complex 2BR Unit: 1000 UBIbucks + $1000 / mo. (which equals, based on today's rate $2000 + $1000 = $3000 /mo)

    Assume the current maximum UBI payment is 1000 UBIbucks a month.

    Bill can price his units in a way that makes it so people who are just coasting on UBI can't live there. Is it discriminatory? No, because every person can choose to get a job or not (or participate in a job program, etc.) Now, there would be activism that says this is wrong, but, that's how North Borkia wrote the law and their landlords tend to like it.

    Let's go to the state of Parkland: their legislature says you may only "overprice" your UBI rentals on 25% of your total units.

    So Jim's Condos Inc. rents most of his units for 1000 UBIbucks, but 25% of them he is allowed to price like North Borkia's.

    Well, he's competing for North Borkia's renters, and probably losing somewhat. He might lobby their government to overturn this legislatino because he wants the better business.

    It's an oversimplified example, because real estate is about location and local economies as well, but it allows UBI to be used by those who want to just lay low and live without fear of destitution and it allows other locations to compete for higher quality renters without shutting out people who just want to live their lives.

    15. UBI as a complex system is robust or even antifragile.

    Go read Kevin Kelley's "Out of Control" from 1994 to get a feel for what complex systems do when they're given room to operate. A simple UBI system would break immediately. It would also threaten to break the rest of the systems around it as a result. A more complex, but still useful, UBI system could introduce compelling forces into the marketplace and also have the benefit of caring for those who can least adapt or overcome their disposition.

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