Well, that didn’t take long.
Just months after the latest of round of stimulus checks went out, inflation has spiked to the highest levels seen in decades.
You don’t need to be an economist or someone who follows the financial news to be aware of it. Every consumer has noticed their food prices going up on an almost weekly basis and the increases show no signs of slowing down.
Of course, all of this shouldn’t really come as a surprise. When you inject trillions of dollars into the economy you end up with a short term economic jump, then years of inflation.
Currently, inflation has hit people so hard the number of Google searches asking about inflation have spiked as well. So the inflation isn’t academic, it’s hitting regular people and they are searching for answers.
But all of this points to another economic issue that has been in the news recently and that’s the argument over UBI, or Universal Basic Income. It has gained traction with out-of-touch elites and progressive pundits. Politically, Andrew Yang has built his whole image on the idea.
The problem is, we just witnessed what happens when you give people free money, even a relatively small amount. The latest rounds of stimulus checks were only $1400 per person, and just that small amount of cash has caused the price of everything to go up. From housing to food, inflation will eat up most of that stimulus in the average household budget.
Now just imagine giving everyone $30K in free money as many UBI proponents have suggested. The inflationary spike would be many times higher.
This is no longer an academic debate, we can see it in the real world right now. When you hand out free money, it doesn’t help anybody and in fact, ends up hurting those it was meant to help. Inflation hurts the poor and middle class the most, exactly the people that were suppose to be helped by the stimulus.
But the problems extend even past inflation. The job market has been upended by the recent stimulus payments as people are choosing to not work and collect government checks instead. This has caused a labor shortage in many sectors of the economy and has forced businesses to compete with the government over wages, something that is totally unnatural in the marketplace.
It should be plain to see for everyone now that the debates over UBI should come to a stop. It simply doesn’t work and now we have real-world proof that shows even small cash handouts can have huge negative impacts on the economy. But most importantly, cash handouts hurt the people they are meant to help, and that’s why UBI is such a dangerous concept that needs to be cast aside for good.