UBI causes inflation - increases demand

Drawbacks of a Universal Basic Income A UBI system is still a theoretical approach, one that comes with good intentions and noble goals. Still, widespread financial equality and independence offer the potential to cause some serious economic issues. One major issue with a universal basic income, raised by those who oppose such a practice, is inflation. It’s easy to see how the institution of a UBI may fuel inflation. If every individual is granted an unconditional income from the government, then there is money to be spent. Providing massive amounts of money to virtually every individual in the country translates to a massively expanded money supply. It means that there is a higher demand for goods and services that manufacturers and retailers produce and sell. The law of supply and demand dictates that, as demand pressure increases on producers and retailers, they must increase prices on the available supply of goods and services to avoid being overwhelmed by the increased demand. That is inflation. If the end result of a UBI turns out to be uncontrolled inflation, then the cost of living continues to increase. It would necessitate an increase in the level of universal basic income provided to all citizens or allowing the standard of living for UBI recipients to decline, as they are able to purchase fewer goods and services with the amount of UBI they receive. Unless something can be done to manage the situation, there would just be a vicious circle created of higher UBI leading to increased prices, leading to a necessary increase in the UBI amount, leading to still higher prices… you get the idea.