> That doesn't happen in the real world -- raising taxes doesn't cause runaway inflation. (How could you possibly think that it does?)
I agree that it doesn't cause runaway inflation (which we can see empirically), but it does cause economic contraction, which has many of the same effects as inflation. There's a good reason that one of a government's first relief measures in a recession is to ease taxes.
> Say that each year you set aside 20% of the GDP for basic income. Then your basic income plan already automatically increases with inflation.
It's important that we not conflate "inflation" with "consumer price index" here. The GDP is not fixed to the CPI - they have an inverse relationship. This means that if the GDP contracts significantly (reducing BI), the CPI could well expand outside of the bounds of what BI provides, necessitating the need for a greater BI contribution. Setting aside 20% of the GDP works until it doesn't.
I agree that it doesn't cause runaway inflation (which we can see empirically), but it does cause economic contraction, which has many of the same effects as inflation. There's a good reason that one of a government's first relief measures in a recession is to ease taxes.
> Say that each year you set aside 20% of the GDP for basic income. Then your basic income plan already automatically increases with inflation.
It's important that we not conflate "inflation" with "consumer price index" here. The GDP is not fixed to the CPI - they have an inverse relationship. This means that if the GDP contracts significantly (reducing BI), the CPI could well expand outside of the bounds of what BI provides, necessitating the need for a greater BI contribution. Setting aside 20% of the GDP works until it doesn't.