Although I advocate the empowerment of the impoverished, this looks like a very fundamentally flawed idea that would actually harm those it sets out to help. We need a different approach.
When you give everyone in the economy a $10000 basic income you drive demand without driving supply. This graph[1] demonstrates how we estimate the relationship between the two, as well as price. As you'll notice, an increase in demand without an associated increase in supply results in an increase in prices. Essentially we might expect that over time the $10000, with market forces as the causation, will become the new N=0 point. Your basic salary becomes worthless. Any economic freedoms that you have created are fleeting in nature.
A stricter socialist approach seems to be the better one: instead of investing that money into people's pockets, you invest it in job creation in services that assist these people. For example: aggressive funding of soup kitchens. The poorest of the poorest might not have money in their pockets, but it might be possible to provide even advanced (e.g. internet) services to them in such a way that they don't require money. This solution conveys no economic freedom - an ingredient for misery.
Point is: I don't know and honestly, we don't know.
Helping the impoverished is one of the most important goals of our race; but racing into poorly thought out solutions might result in the impoverished being no better off in the long run. I'd love to hear some counterarguments because the basic salary, at least superficially, has the attractive quality of being simple to implement.
What's the net economic difference between giving someone $5, which they then spend on soup, and spending $5 to buy soup on their behalf? None. Same for spending $10000 on someone's behalf via services, versus simply giving them $10000 which they then spend on the same services. Who holds the taxpayer provided money when making the final sale for goods or services is moot.
In both cases you're driving up demand, which is what in turn drives up supply. Supply doesn't magically materialize - either someone pays for it with money, or someone pays for it with time not spent earning money, to provide those services or products. As your own graph demonstrates, quantity goes up regardless. What's your "new N=0 point" on the graph?
My point here is not that there aren't issues with funding demand for services with inelastic supply (where large increases in price only lead to small increases in quantity, meaning little good was done.) There are such issues. Instead, my point is that these are not UBI specific issues. They're valid concerns with housing programs and rent controls today, for example.
The real difference of consideration between UBI vs other social welfare programs (when taken as a whole), is how demand might change (lowering in some places while increasing in others) when the ones actually consuming the services get to direct where the dollars are spent, instead of government policymakers.
In theory, replacing social welfare programs with UBI might drive demand away from elastically supplied goods and services, towards inelasticly supplied goods and services. It's far from a given, though - we have plenty of existing government programs for such inelastic things as housing. If you see some fundamental flaw of UBI that would cause demand to shift this way, I've missed it, so please do share.
I'm more concerned by the other factors:
On the one hand, those in need of services in many cases the ones in the best position to know what they need, so the money for those services may be spent more efficiently - especially if there's less waste in red tape bureaucracy, from government organizations unfettered from the pressures of capitalism.
On the other, if you haven't learned how to manage your money, don't know about the things that could best help your situation, or are in the grips of addiction, it may be difficult for you to spend your money wisely.
My understanding is that direct cash influxes to the poor in 3rd world countries has worked pretty well. It's not perfectly analogous to helping out the poor in 1st world countries via UBI, but I'm fairly hopeful it's analogous enough.
In essence I meant that, in a construed way, the buying power of $10000 would approach the same buying power as the pittance that the impoverished have today. Your argument was very educational so I have to do some more thinking about this and may discard that point. Thanks for the food for thought.
When you give everyone in the economy a $10000 basic income you drive demand without driving supply. This graph[1] demonstrates how we estimate the relationship between the two, as well as price. As you'll notice, an increase in demand without an associated increase in supply results in an increase in prices. Essentially we might expect that over time the $10000, with market forces as the causation, will become the new N=0 point. Your basic salary becomes worthless. Any economic freedoms that you have created are fleeting in nature.
A stricter socialist approach seems to be the better one: instead of investing that money into people's pockets, you invest it in job creation in services that assist these people. For example: aggressive funding of soup kitchens. The poorest of the poorest might not have money in their pockets, but it might be possible to provide even advanced (e.g. internet) services to them in such a way that they don't require money. This solution conveys no economic freedom - an ingredient for misery.
Point is: I don't know and honestly, we don't know.
Helping the impoverished is one of the most important goals of our race; but racing into poorly thought out solutions might result in the impoverished being no better off in the long run. I'd love to hear some counterarguments because the basic salary, at least superficially, has the attractive quality of being simple to implement.
[1]: https://upload.wikimedia.org/wikipedia/commons/thumb/7/7a/Su...