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I have been seeing a lot of reels and videos asking why printing more money can't solve poverty. To put it simply, money would just be worth less than before. This would be a direct result of inflation that would follow. For example, if a laptop worth €1000/- becomes accessible
to a wider range of people, now that they all have more money, its demand would increase. And since demand increased, so will the price. Theoretically, this change would be more or less proportionate to that extra money.
Meaning, inflation would make it so that people are in the same position as before. This is not the way to go. There is however a better, a novel, way to tackle poverty, and that's UBI or Universal Basic Income. Under UBI, a basic income is provided to people.
There are various degrees of UBI, but let's talk about the most basic one. Enough money to get people above the poverty line. This is a better approach than welfare schemes because under a lot of welfare schemes, if you make a single buck more than the benefit, the whole thing
is taken away. UBI functions differently. It will be there, no matter what you earn. This provides a basic line for people to rise up from. Won't this cause inflation? No! Since we're not talking about "printing" more money, we will have to adjust these funds from somewhere.
A society with a strong enough UBI structure could get rid of its welfare schemes, freeing up funds. Progressive taxation policies are also a way to generate more funds for UBI. Currently, no countries have a well established UBI.
But Universal Basic Income could ideally be a more efficient way to tackle poverty in the coming years!
