It’s a fallacious idea that UBI needs to be funded in some way.  At least what conventional thinkers mean by “funding.”

If done right, a UBI could be phased in to correspond with falling AD due to decreasing employment/increasing automation. Where would the money come from? It’d come from nowhere. Fiat money is cool like dat (with its gangsta stroll).

No, this isn’t some pie-in-the-sky idea. Remember QE I, II, and III? Where do you think that money came from? Where do you think it went? If you can answer that cogently, you’re doing better than most.

The idea that UBI needs to be funded is like saying that the Fed needs to get its money from somewhere. No, it really really doesn’t. Here’s where the Fed gets its money (note: this isn’t completely true but for the sake of brevity and not writing a book….): there is a bank account somewhere. It has $1.0000000000 in it. Someone at the Fed shifts the digital decimal point to this: $100000000.00.

Boom. There is $10 billion that didn’t exist anywhere before. Nevertheless, there it is. It is now real.

This is how you’d fund UBI (note: the Fed wouldn’t be the one to do this — like I said, I don’t want to write a book).

Also note that it’d actually be better if we pretended we needed to fund UBI by taxing the rich heavily. This would lead to a better society for all by reducing inequality. But that is in truth a fiction. The federal government isn’t actually in reality funded by taxes right now (also a convenient fiction).

All money is convenient fiction. But if used right, we can make that fiction do some really cool stuff.

There’s a lot of things that Donald Trump doesn’t understand. Bonds ain’t one of them. What Trump suggested was taking advantage of a core attribute of tradable bonds: When interest rates rise above what they pay, the resale price of the bond goes down.

Yep! It was really horrible but not unexpected that both the left and the right criticized Trump vociferously for something he understood just fine and almost no one in any news venue — including all the financial ones — comprehended at all.

Even the first commenter on the linked post has no clue, stating “But isn’t that like paying off your old debt on a low-interest credit card by borrowing more money on a different high-interest card?”

NO. FUCKING NO. Repeat after me kids: fiat money is not like your checking account or your credit card. The federal budget is not like your bank account. It just isn’t, never will be, can’t be, won’t be. Ever. Yes, ever. Give it up and shut up about it.

In fact, not a single commenter in the post understood at all — and this is not controversial. This is how bond markets work. This is how sovereign debt works. There is no other way. This is just how it is, period. There is no debate. The commenters (and 99% of the financial press and 100% of everyone else) is just plain wrong. And have no clue.

Note: Trump’s plan isn’t actually a good one, precisely, but there is nothing technically wrong with it. He said nothing incorrect. But he doesn’t control the Fed and probably never will (even if president), so it would not likely be put in place.

But Trump understands 100% how bonds and their markets function (and the US monetary system) and almost no one else does. (I’m quite certain from her statements that Hillary Clinton does not, but then again no other presidential candidate including Bernie Sanders does, either.)