A basic income would only drive inflation – increases aggregate demand while constraining the labor supply

This massive influx in additional dollars has made the dollars already in our paychecks, pocketbooks and bank accounts worth less. As Milton Friedman explained, “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” In a recent study, the Federal Reserve Bank of San Francisco demonstrated how the American Rescue Plan directly pushed up prices in the economy. This painful inflation should put a nail in the coffin of Modern Monetary Theory, the belief held (at least in practice) by many Democrats that deficits don’t matter because money grows on trees via Federal Reserve printing. The inflation cost of MMT is proving high and painful. This philosophy also is responsible for the federal debt hitting $30 trillion, the net interest on which threatens to be a massive drag on the economy moving forward. High inflation also should drive a stake through the heart of the crackpot Democratic idea of universal basic income. Direct government payouts artificially boosted aggregate demand while at the same time contributing to the worst labor shortage in American history, reducing supply. Economists at The Committee to Unleash Prosperity estimate that most recipients of supplemental unemployment benefits made more than at their old jobs. The consequence: rapidly rising prices. Americans may think they are getting ahead when they receive a stimulus check. Certainly, that’s what the Democrats who support these basic income policies expect. But the higher incomes are ephemeral because they cause prices to rise, eliminating any real pocketbook gains. Support for universal basic income among some of America’s smartest technology innovators is proof that high intelligence doesn’t translate to sound public policy.