A $1,000 per month cash handout would grow the U.S economy by $2.5 trillion, new study says

[DonFerrari]

StuOhQ said:

S.T.A.G.E. said:

The level of inflation would go through the bloody roof. It would only make buying things get worse because their purchasing power would actually decrease. If they could actually account for every dollar given this wouldnt be much of an issue to me but it is quite questionable indeed.

Hate to double-post, but there are WAY too many people saying this will cause inflation not to comment.

Inflation is caused when new money is introduced into the system (printing) without removing old money. In this scenario, extra money wouldn't have to be printed. Here's why:

We spend more than the next seven biggest military spenders in the world combined. If we reduced that to even as much as the next three biggest military spenders we would have our money. Moving to a single-payer health care system would save us billions. Legalizing weed would cut down on the cost of the war on drugs as well as increased revenue from newly taxed products already being sold on the black market. Returning to more sensible tax codes where those individuals (single-persons) that benefit most from our infrastructure (the biggest earners) would pay more than they currently do in taxes towards the economy. Closing loopholes that allow corporations to pay little or no taxes, and hide money overseas, would also lower the deficit.

Doing all of these things together would provide enough revenue to generate a surplus, which could be used for basic universal income -- which would in-turn stimulate the economy. 

One of the causes of inflation may be money printing. But it isn't the only one. Brazil had over 6% inflation without really printing more money.

Inflation also comes from increase of salaries without increase in productivity (mandatory raises) because the companies have to rollback that cost to the price of products. It also comes from increase in costs from taxes or controlled prices.

And people getting money they didn't fight to get propelling expenditures will shift the balance of price x demand, making the products go higher in price.