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human
CMV: basic universal income is useless, due to supply and demand and inflation

The idea of basic universal income (BUI) is floated as a solution for the increased automation and socio-economical differences in many Western countries.  While I support measures to address this issue, I fail to see how BUI will help. 

Imagine a simplified scenario in which the only thing people buy is tomatoes.  Supply and demand (and other factors) set the price for a tomato at 1$.  Now say we want to help the poor and give all the people 100$ BUI.  Very quickly the price of tomatoes will adjust to reflect the higher income, to say 101$. 

Two possible rebuttals are that different "classes" buy different things (yachts vs food) and that different people need different things (tomatoes vs cucumbers).

However I believe that there exits a most basic service that is prolific and significant enough to overcome these rebuttals - housing.  In particular - rent. 

In a sense my view is that potential services, and particularly rent, would be priced higher to reflect the new demand / purchase ability, thus rendering the effects of BUI to a minimum.

Would be very happy to hear a different opinion!

EDIT:  I'm adding a few points to clarify my view, as it seems a lot of the comments are similar.

A.  First let me say that if by BUI we actually mean wealth distribution I'm all for it.  The BUI propositions I've seen are more similar to subsidies for the entire population.  In fact, if we just mean wealth distribution I don't think its BUI at all, its just taxes. It is clear the funding for BUI comes from taxes but it is not the same.  

B.  Inflation is a complicated issue and is not solely a result of printing money, but rather the amorphous concept of the VALUE of money.  Certainly printing money would reduce its value but it is not the only thing that leads to inflation (as a side note think of countries that go bankrupt.)  

In this issue BUI, especially types of BUI that would only or mostly benefit the most poor,  would lead to an influx of money to a very specific population.  That population have similar needs, and if they can pay more - I believe they will be charged more.

C.  A related issue is the supply and demand.  I should not have brought this up as this muddies the water but for the sake of clarity let me say this: It's true that people will always buy food because the must (it is very rigid demand), but the price of products is based not only on supply and demand but also on ability to pay.  In other words, the fact that the supply and demand will not change as a result of more money DOES NOT mean the prices wont change - again see point B.

D.  I do agree that there will be a net benefit for the very poor, especially if they are the only benefactor of BUI, but I think it would be limited to products that they share with the rest of the population, and I think the benefit would be rather small.

Thanks for your opinions so far!
gpt
Mathematically, poor people will still be better off.

The price-increasing effects of UBI won't all go to the things poor people want/need. Only some of the price-increasing effect will affect those things. That means that while poor people may get an extra $1000, their cost of living would only go up by a smaller amount, for example by $500. They're still $500 ahead than they were before, and so it's a net benefit for those that are poor. 

Inflation won't technically occur, because the amount of money in the system would stay the same. You're not printing new money, you're taking money from the rich and giving it to the poor. It's a net change of $0.