Using basic income to increase debt is an example of how this can turn into a trap. People would spend until the interest on the debt matched the basic income.
You couldn't even force people to use the basic income for food or rent because money is fungible.
Technically it's possible the federal reserve can produce a digital currency and go completely cashless so in theory maybe under certain scenarios people can be restricted in how they can spend their money. Of course this would go against libertarian principles but most people don't seem to care about that.
That's the equilibrium. You're right.