I think the usual assumption is that UBI is financed by an increase in taxes (which means for people with more than a certain amount of other income, they come out behind when you subtract the extra taxes they pay from the UBI they receive).  If so, there is no direct effect on inflation - some people get more money, some get less.  There is a less direct effect in that there may be less incentive for people to work (and hence produce goods), as well as some administrative cost, but this is true for numerous other government programs as well.  There's nothing special about UBI, except maybe quantitatively.

Another possibility is that UBI is financed by just printing money. This will certainly result in higher inflation than would otherwise obtain.  But many governments print money for other reasons, so again, this is at most quantitatively different from the current situation. When the economy is expanding, one should be able to print a certain amount of money while keeping inflation at zero, since more money is needed to facilitate transactions in a bigger economy. The flaw here is quantitative: a UBI financed in this way wouldn't be very large.

Printing money to finance UBI was a basic tenant of the "Social Credit" ideology due to Major Douglas, most prominant in the 1930s.

None of this says that UBI is either morally or practically justified. But it isn't infeasible for the reason you give.

Due to money neutrality^[1], increases in the supply of money that's in circulation (either because the government is printing money to fund UBI or, to a lesser extent, because they are taxing ultra-rich people, whose wealth generally has a lower velocity than that of the lower-income recipients that save a smaller percentage of their income) do not modify real variables, such as real GDP.

This means that the total supply of goods and services in a country does not change, and the increase in people's disposable income and thus capacity to buy is, on the whole, captured entirely by inflation and rent-seeking. Note that rent alone does not go up by exactly the value of the UBI, but since other goods and services increase in price as well, the total real effect is zero. Of course, many answers have already mentioned that the rent-seeking part can be addressed (at least in part) by Land Value Taxes (LVT).

While LVT seems to me like a good idea on the whole, it still has some serious implementation issues. Firstly, on the federal level, it is almost certainly a non-income direct tax and thus covered by Article I, Section 9, Clause 4 of the Constitution, which requires apportionment among the states^[2] (and it's likely not covered by the 16th Amendment, which generates a exemption from this). Secondly, there are other practical problems, such as accurately assessing the value of (unimproved) land separately from whatever is built on top of it. Moreover, most Georgists support a tax rate of below 100%, which would reduce but not eliminate land rent-seeking. There are other arguments that have been brought against LVT, of course, but they don't ultimately seem to hold up, in my view.

Of course, there is also the additional issue that land is not the only area in which sustained economic rent-seeking happens. What makes land easier to tackle in this regard, at least conceptually, is that, in practice, it is almost perfectly inelastic, so taxation of it does not generate productivity-destroying Deadweight Loss the way any other non-Pigouvian taxes do. Other areas in which we have rent-seeking likely do not benefit from the same feature, so taxation would need to be implemented very carefully, so as to generate the roughly estimated the social benefit and thus socially desirable quantity of some area of the economy.

In any case, even though the aggregate real effect of UBI would be approximately zero, this does not mean that there would not be people who benefit. On the contrary, it seems sensible to expect lower-income consumers to benefit the most: for illustrative purposes, an extreme example is someone who starts of with a disposable income of $0. They cannot buy anything at the beginning, but if they receive $2k in UBI, let's say, they can now afford more goods and services than before, even if those goods and services get more expensive. Less extremely, a hypothetical scenario in which each citizen/resident has the same consumption demand curves and receives the same lump sum of money from the government simply results in the value of money decreasing by a factor of $\frac{\text{total old money}+\text{total new money}}{\text{total old money}}$, so the total value stays the same, but it is more evenly distributed (poorer people get richer in real terms and richer people get poorer in real terms).

This doesn't quite match reality because rich people and poor people do have measurable differences in consumption preferences and demand curves. But I think we have good reason to suspect that the overall effects generated by this are small and should not change our conclusion (that UBI generally has a progressive aspect) too much.

1. ^{^}

   Which is basically correct in the medium-to-long-term

2. ^{^}

   Apportionment has been described by scholars as "an absurd requirement, almost always impossible or else so perverse in effect that no democracy, indeed no rational government, could adopt it"

First, UBI is not a magical solution to all humanity's problems ever. For example, it won't cure malaria. Also, what happens if we adopt UBI and literally every single human on this planet decides to quit their job and do nothing (before things get fully automated)? Then we will starve and die.

So, expecting UBI to magically solve everything would be wrong. It is also be wrong to reject UBI just because it is unable to magically solve everything. Things that solve some problems and do not solve other problems can still be improvements.

*

The allocation of money determines not just how much stuff is produced, but also which stuff is produced. It is true that UBI will not result in more stuff being produced. But it may result in different stuff being produced. Fewer yachts, more anti-malaria nets? That would be the most optimistic result, but maybe something like that. I mean, if the people who need the anti-malaria nets get the UBI, they may spend a part of money on that, and a part on something else.

Worrying about the rent makes sense. But consider that one of the reasons why rents are so high is that people need to live close to well-paying jobs. Yes, a part of UBI will get captured by the rent-seekers (unless it is financed by a Georgist reform), but the power of the rent-seekers will be somehow reduced by the fact that people are now under smaller pressure to live at the most expensive locations. No idea what would be the new balance, but it doesn't seem obvious to me that it would be the same as the old balance.

Shortly, your analysis is missing the part where people with UBI would be allowed to make different choices than they make now. If you get extra X dollars, and someone increases your rent by X dollars... yes, one possible choice is to stay. But another possible choice (that you didn't previously have) is to leave and take the X dollars with you. So people will probably split between these two options.

A UBI in the US might cause what you're suggesting, since there tend to be more restrictions on needs vs wants. i.e. no one will stop you from building a superyacht if you want, but there's a lot of artificial barriers to building cheap apartments. So if you shift demand from things rich people want to things poor people want, you might get a lot of the money transferred to the owners of the last few cheap apartments that were allowed to be built.

This seems like more of an argument against that kind of law that outlaws anything that rich people don't want though, not an argument against UBI.

Is this a generalized argument about all redistribution schemes?  

UBI doesn't fix everything, but inflation doesn't do as much harm to the impoverished as it does to the cash-heavy.  In fact, it's a form of redistribution in itself.  So a near-zero-starting UBI recipient does see some of their UBI purchasing power reduced, it's still better than without UBI.  The well-off are taxed more than they receive in UBI, either via actual taxes or inflation.

If you raise someone's cash position from 0 to nonzero, then no percentage reduction brings it back to 0.  

As to the rent-seeking (aka "poor people make poor money decisions"), it's probably not solvable, but having UBI be non-attachable (future payments not assignable or collectable for debts, and excluded from bankruptcy proceedings) makes it a little harder for legible systems to take it away.  Private corruption and human trafficking probably don't get solved by UBI, but they're probably not made worse.

If I am a lending shark, I will lend more predatorily to people under a UBI regime, even if that income is protected.  It changes the risk management calculations towards "they now have more ways to figure out a way to pay before going bankrupt" and "after bankruptcy pool of money I can extract is higher."  Again, maybe you've technically protected UBI, but I can surely garnish wages in either case, pressuring them to give me as much as they can.  People can miraculously make money appear when you squeeze them, and now I know there's more there to squeeze them for in every case.

People with protected savings often raid that.  I will count on the "raid the IRA" effect, but with people for whom that money wasn't earned, and they don't culturally have the tendency to want to protect it.  And anyway, you can only file bankruptcy once in seven years, and I can get more blood in the interim.  In essence, I'll redo all my risk management calculations on how far I press this because now you have two choices, you're either going to be dirt poor -- nothing but UBI and quit your job and live in the gutter, or else you're going to "magically make some money happen" to get me off your back.

My guess is this dynamic screws over people just above the poorest, and deep into the middle.

Look, I personally find all that distasteful.  I won't even buy Altria stock.  But I expect a flourishing of those businesses in a UBI regime, and they will prey upon many who UBI is trying to help.  That and the increased inflation, I think the middle poor and the lower middle classes will get really screwed by the whole thing in the end.  Basically the people who work and struggle, whom UBI most wishes to help.

Kind of adjacent:  Add in investment scams targeting the undereducated, and lots of toys to decorate trailers.  I would expect Sony, Nintendo, etc stock to go up (GME, LOL), and Altria as well due to the additional pot sales.  The "Video games and drugs" class will expand fast, because UBI will not likely be enough to do anything actually interesting.

I think it's a step that has to happen and will happen.  The writing is probably on the wall that we're going to enter a very redistributive regime in the USA.  But I am not optimistic about it until we're at near Star Trek levels of Universal Wealth.

I'm not sure where you get the assumption that a UBI is funded by printing money. Most proposals I've seen are funded by taxation. The UBI proposed by Charles Murray (in https://www.amazon.com/Our-Hands-Replace-Welfare-State/dp/0844742236 ) is entirely funded by existing welfare and social spending (by redirecting them to a UBI).