Comment Re:UBI - the perennial liberal dream (Score 1) 459
That's not really how that works. Inflation is controlled by many factors, notably wage and loanable funds. When inflation increases, unemployment decreases because of additional hiring; this is destructive (it leads to more inflation), so central banks sell bonds to decrease the loanable funds supply and reduce business growth. When inflation decreases, central banks buy bonds to increase the loanable funds supply, spurring investment to create jobs, which increases inflation.
Fiscal policy plays a part, too. Increased deficit spending increases inflation, but too much causes crowding out: the government borrows a lot, reducing the loanable funds supply, thus reducing investment. Surplus slows things down: taxes aren't balanced by spending, so there's less spending available.
Interestingly, if the government taxes $1Bn and spends $1Bn, the impact is +$1Bn in economic activity: the tax multiplier is smaller in magnitude than the spending multiplier. Theoretically that doesn't apply to transfers; however, transfers move from low MPC to high MPC, which creates a differential in spending and impact. That differential tends to drive GDP growth rather than inflation: areas of higher income concentration are the baseline, and lower-income areas can only be lifted that high in the theoretical case, and not nearly as much in practice, so they're only normalizing toward existing outputs and prices.