The main problem with government poverty programs is that they usually focus on spending money instead of giving money to people who need it. That is, the government spends money on things, but this is a very inefficient or even counterproductive way to help. And a lot of the time it just means that the money is going to whoever is politically connected.
A much more efficient way to help people is just to give them money directly, and then people can spend it on whatever they think they need.
That's the same problem with pretty much all government programs. A recent example that has affected me is the childcare subsidy brought in by the federal government here in Canada. It was supposed to be an extra 300-900 a month to make childcare cost 10 dollars a day. Instead it has became a large bureaucracy directly ruining an ok private system that existed previously by driving up costs substantially everywhere and making the experience much worse for my kids via spurious regulation. Specifically my day home now charges 70 dollars more a month to cover the onerous additional paperwork and filing requirements of the program (I don't blame them, given the extra work I would have expected more of a cost increase), my day home had to remove perfectly fine play equipment from the backyard because it was 1800 dollar Costco play equipment rather than the multi hundred thousand dollar professional public park grade stuff, and there are a substantial number of additional bureaucrats employed by my government making more and more busy work for everyone, which may ruin the much better day home style care system in favor of large institutional day cares (up to six kids, one care giver that stays constant vs 20+ kids and a string of day care workers that can and does change regularly). If they had just given the money to the parents and kept the existing regulatory regime things would have been better, instead the government made it worse.
The daycare my kids go to reduced rates. Maybe it is big enough that the paper work is not a big deal. The new subsidized daycare made things cheaper for everyone I know.
overall my rate is technically reduced because I get 300 subsidy but pay 70 more. The quality of service has gone down too because of the removal of perfectly good amenities.
The quality of service in North America has gone down across nearly every service, whether wholly governmental, or wholly private, since the pandemic.
It’s very likely the quality of service is heavily affected by the same general forces.
In addition to that, any effort which greatly increases access to services to a broader spectrum of people will usually lead to a short term reduction of quality as the supply catches up with the new demand. A logical solution to this would be to phase in the demand, but unfortunately it’s not politically viable at all (politicians of all stripes want to be credited for the changes they make, and phasing it in over a period of time means the costs impact the budget almost immediately, but the benefits take time to filter through, which will likely be a political disaster).
Yah, it's kind of embarrassing that the second half of the 20th century was a story of electing and then recovering from electing a trudeau and we were dumb enough to do it all again making that the main theme of the first half of the 21st century as well.
He gets less than a 1/3 of the actual voters. Way less than a 1/3 of people who are eligible to vote, and less of the popular vote of the conservatives in the last election. The voting system is flawed. He knew that and actually ran on changing it, and then !!surprise!! didn't change a thing.
That’s how the critics of these programs spiked the programs. “Welfare Queens” were supposedly driving around with Cadillacs, so controls had to be in place.
I spent several years working on social services IT. The biggest welfare beneficiaries are companies like IBM, CSC, Accenture, Unisys, Northrup Grumman, etc and their employees.
That’s why some politicians were so terrified of the COVID relief programs. The government efficiently provided direct cash aid to millions of people with minimal fraud while the complex controlled systems like unemployment insurance were just raided by fraudsters. We made people’s lives measurably better, saved the economy from
collapse, etc, and then took it all away.
Sure, now do the tax credits to parents and the pandemic EBT. These are what we're talking about. PPP was a giveaway to moneyed interests because god forbid we pay it directly to workers.
I believe they're referring specifically to the Economic Impact Payments, since those had zero controls from most peoples' perspective. Money just showed up in your bank account.
I was. The government efficiently gave cash to almost everyone. That was pretty close to UBI. The biggest issue with direct payments were due to the way separated couples claim dependents.
UI, which I specifically mentioned, was a fraud carnival.
"At least" $35 billion in pandemic relief money
- $29 billion was in the Pandemic Protection Program
- $6.9 billion was in the Economic Injury Disaster Loan program
IRS has 975 tax and money laundering cases related to pandemic fraud with a total of $3.2 billion in alleged fraud. 236 already sentenced for avg. 37 months in prison. ~100% conviction rate.
From: https://www.gao.gov/assets/gao-23-105523.pdf "the lower bound of this fraud rate (7.6 percent) extrapolated to total spending across all Unemployment Insurance (UI) programs ... suggest over $60 billion in fraudulent UI payments."
- Cases of Proven Fraud: "currently $4.3 billion dollars of fraud based on formal determinations"
From: https://www.gao.gov/products/gao-22-104397 and https://www.asas.org/taking-stock/blog-post/taking-stock/202...
- Coronavirus Food Assistance Program (CFAP) provided producers $31.0 billion for various commodities ... half of the producers that GAO reviewed did not provide full support for their payments. The payments are therefore potentially improper.
- USDA’s Business Center 2021 payment integrity review for CFAP estimated that CFAP had a significant improper payment rate for the fiscal year 2020 ... estimated that that $450M were improper.
UBI will always be the best answer. MLK advocated for it as the best way to alleviate poverty. Even Milton Friedman believed in a pseudo-UBI through his Negative Income Tax.
The price of goods will always rise to what the market will bear.
If you inject money into a market with schemes like UBI, all you do is creating a forcing function for inflation.
Fundamentally, money represents a debt that society owes based on creation/consumption of goods and services.
If you create money (debt symbols) without the corresponding good or service, you devalue the debt. So, an apple that was worth $1 now becomes worth $2 because your symbols that represent debt have been artificially modified.
Then, first order thinking drives yet another "UBI+" solution to give more money, and the cycle continues until an apple is "one billion dollars". World history has many examples of this, but you don't really need to look harder than covid related inflation.
The best solution to human poverty and suffering that we've ever created is economic opportunity. When given the chance, humans will thrive and succeed.
The best way to create economic opportunity is to reduce barriers to success (like onerous income taxation, and excessive regulation) and to invest in infrastructure that enhances and supports economic activity.
Why are you presuming that UBI will be funded through creating more money, instead of redirecting money and/or increasing taxes? Does that change your conclusion?
Reducing taxes will not meaningfully increase economic opportunity for people in poverty, because they are not the causes of most people's poverty. Reducing regulation may help, but only because "regulation" is broad and includes things like onerous means-testing that makes it harder for people in need to get resources. Jobs help, and AFAIK there's not much regulation making it harder to get a job.
No. The basic version goes lowering taxes = more money in pockets but same output = inflationary.
It's not necessarily that simple but in any case you have it completely backwards.
Let's apply the ole reductio absurdum and see how it shakes out.
Bloat an already obese government by cranking taxes up to 100%, society collapses.
Put the government on the fasting cure, starve the beast, and most folks end up with more in their pocket and happier.
How about I add $100 tax to each apple sale? What happens to apple prices? I'd be forced to finally develop a taste for cherry pie.
How much and who to tax have been arm wrestled over since humans figured out that houses are nicer than caves.
Cities need both taxes and sewers to survive, but too much of either will stink enough to drive off anyone who can.
Take a peek at That Which is Seen and That Which is Not Seen [1]. Bastiat had his head screwed on straight for a Frenchman, and had it figured out in 1850.
Sure. Or starve an already cash-strapped government by lowering taxes to 0%, society collapses. What is your point exactly?
Other notable things: America's historic tax rates (pre-Reagan), social democratic leaning countries. Higher happiness, somehow. Top marginal rate doesn't affect the vast majority of people, should go without saying.
But you changed the subject. We were discussing what relative tax changes may or may not do to inflation, not your libertarian dreams.
>If you inject money into a market with schemes like UBI, all you do is creating a forcing function for inflation.
That isn't how negative income taxes work at all. Come on educate yourself on the topic before writing a comment like that. In a negative income tax system a break even point is set where you pay exactly as much as you are getting. For the average person this means nothing changes for them. It is only at the high end where people pay significantly more in than they get and at the bottom end where people get out more than they pay in.
The funding problem for UBI has been solved a long time ago. There is no inflation problem. Yes, the UBI will be small but who exactly expects a large UBI? It's not like you get generous welfare payments today.
Surely you're not just waving out the supply chain issues and reduced productive capacity of the whole world due to lockdowns.
Was inflation in the USA higher than inflation in countries that didn't do direct deposits to people? As far as I know, it wasn't. That seems like a more fair starting point on studying effects of direct deposits.
Consider how much money was given to the people and how much money was removed from circulation by corporations and billionaires taking unchecked ludicrous profits and evading taxes on it.
Clearly giving people two $500 checks over the span of two years is the problem
That's not how any of this works. You're assuming that every single person will spend their UBI payment in exactly the same fashion, and thus that all prices will go up in unison. That is an extremely basic model of the economy (i.e. it's not a good model). It doesn't take into account people saving, people paying off debt (another form of savings), or any sort of second-order effects (how will this effect how people operate in the labor market if they know they can leave a crappy job and not become homeless)?
"First order thinking" is not a euphemism for "I'm right because I said so".
First order thinking means exactly what I intended: a simple model of cause and effect without thinking through consequences entirely.
Society needs that sometimes. It can be paralyzed by Nth order thinking to the point where gross injustice is allowed to survive for much too long.
A response like "just add more regulation and price caps" as a solution to dealing with runaway inflation is definitely first order thinking, as is (in my opinion) "the solution to poverty is to just give people money (UBI)".
1. there is a very monetarist account of inflation that not everyone agrees with
2. UBI can (and should imo) be funded through redistribution (taxation)
You seem to believe in markets. UBI allows us to have most of the benefits of a dynamic market system whilst avoiding the worst aspects - crushing poverty for those whose market value of labour is extremely low.
It's probably (IMO is) better to spend additional money on Infrastructure. Lots of the obvious stuff, but even things that seem like a stretch. Is healthcare infrastructure? Is childcare? How about work benefits management (days off, stock options, etc), pretty much HR, as a centralized national entity? (Not the funding of those benefits, companies would pay their costs into the program and then not need to worry about it anymore.)
The economically desirable things that UBI or any other handout are spent on, should fall into two categories. Things the government pays for itself because it's going to be the only buyer or a major buyer. Things the government has limited debit card systems for (E.G. food stamps) because there's already a market and they won't be a major buyer.
If you create money (debt symbols) without the corresponding good or service, you devalue the debt.
This is the central logical fallacy in your argument: you're equating UBI with inflation. UBI is different because it's funded through taxation, which holds the money supply constant.
The best solution to human poverty and suffering that we've ever created is economic opportunity. When given the chance, humans will thrive and succeed.
This is the central emotional fallacy in your argument: that a person's fate is decided by their actions. You're applying your own belief system, rather than using systems-level thinking to do the work of root cause analysis, meta analysis, epidemiological analysis around the psychological effects of wealth inequality, etc. That's why you feel very strongly about your solution, without having evidence to support it, and why people like me who have a different life experience don't subscribe to it.
If we study history, we see that technology was available after the Green Revolution, post WWII, to feed everyone in the world by the late 1960s. We see that so many measures of poverty like infant mortality are unnecessary symptoms, because modern medicine made birth control pills available and pregnancy safe, again by the late 60s. Same with basic measures of equality like the percentage of the workforce who are women, which was rising substantially by the 60s, but close to parity in the western world by the 1980s.
What's really going on is that a luddite backlash occurs every time that humankind overcomes adversity. For example, Nixon started the War on Drugs as a pretense to put US leftists in prison, by making the plant medicines they use to expand consciousness illegal. The Vietnam War, Oil Embargo, trickle-down economics, loss of unions, Savings and Loan Scandal, first Gulf War, Gramm–Leach–Bliley Act, Dot Com Bubble popping, 9/11, Second Gulf War, Who Killed the Electric Car, outsourcing, Housing Bubble popping, 2016 election, 30% tariff on imported solar panels, and even the COVID-19 pandemic (I could go on forever) are a direct result of that fear-mongering and othering dividing us along ideological lines. Which all stemmed from Nixon's and Goldwater's Southern Strategy to enforce segregation.
Reports like this begin to make sense when one understands the sabotage and corruption that create wealth inequality:
And we see that if we cut taxes on the wealthy further, then wealth inequality increases. One person's definition of opportunity becomes another's definition of subjugation. If we continue on the path we're on, then the National Debt will succeed in finally taking away all self-determination and agency from US workers, forcing them to stay underemployed to survive. Taking away the very opportunity and choice which you so advocate.
With the arrival of AI and sustainable solutions to preserve the environment, we're again at one of these crossroads. We can embrace solutions like UBI and free humanity from forced labor, or we can double down on the failed solutions of the past century and move further into dystopia.
I hope that some of these breadcrumbs help you on your journey of discovery. If your first instinct is to outright reject what I'm suggesting, then I hope you take some time to think upon the events in your life which obfuscated the things I've said. I'll do the same, because your truth is valid to me and if we would listen more, I think that we could solve these longstanding problems and transition to a 21st century economy which works for everyone.
That's certainly the solution that first-order thinking would suggest.
Command economies have never worked in history, though lots of folks have tried [1].
It's good to learn from past mistakes.
It's also sort of a fun thought experiment. When you grant this power to the government, the sorts of things they can do. There's lot of obvious things like "make eggs cheaper!!", but the more fun thought experiment is with something esoteric like the sex industry.
Let's conceive of the correct pricing for a lap dance.
That's a bit complex, it's certainly not fair to charge the same amount for everyone - an attractive, skilled dancer would be forced to charge the same as someone who is unattractive and disinterested. We're going to need a rate table.
Hygiene, attractiveness, skill, friendliness. What else? Age? The body politic has decided that you're not allowed to factor age into a lap dance or to discriminate on what dancer you chose based on age. So we can exclude that from our rate table.
Going to need to create a bureaucracy to develop fair standards for all of those things.
Also, as a footnote, let's create another agency to advertise exotic dancing to the elderly as an excellent career opportunity.
Of course, we'd need to add more regulation that would require the dancers to register their weight and attractiveness with a government agency, and we'd need inspectors to verify that. We'd also probably need to watchers to watch the watchers because the inspectors may be tempted by some "extra services" to inflate their scoring, allowing a dancer to charge more. Probably also going to need to add some undercover officers to make sure that unenlightened customers aren't expressing an opinion on what age of dancer they receive.
Of course, all lap dances aren't created equal - so rates may vary based on how many people are involved, whether the patron is allowed to touch the dancer, and if so the minimum necessary security involved. We'll probably need some secret shoppers to go out and verify that the rates are being charged properly and in-line with dictates.
This would all be pretty costly though, so we'll have to increase taxes on the dancers to pay for it all. But we can't allow them to raise their rates, that would defeat the purpose.
Now we'll need a way to confront the unpatriotic, unwilling masses who have for completely selfish reasons decided that a non-lucrative career in exotic dancing doesn't seem very fun.
Regulation is the answer! Like the Soviet Union, let's decide what profession folks would go into at a young age. Perfect!
Hmm, quality is suffering. Strangely, forcing folks into a profession to meet the needs of our dictated economic constraints resulted in a sub-par experience. There aren't any customers anymore. Fine, mark the whole thing as a loss and outlaw it, certainly can't have an underground economy operating on market forces undermining what our enlightened leaders have decided for us.
(Psst. there's a reason why command economies fail, and freedom matters. Even China understands this.)
The biggest problem is that NIT or even UBI is supported by many on the right as an alternative to the "government knows best" spending programs and as an addition by many on the left. For someone like me who ends up paying the majority of any social program, the former is a good idea and the latter a non-starter, but politically you'll never find an elected (or even electable) politician who will advocate for replacing existing, entrenched programs with direct cash payments.
Other than championing human and civil rights for all, equality, the end of government sanctioned and funded inequality and suppression or minorities, non-violent protest, and overall social reform?
I was trying to show that people on both the "left" (MLK) and the "right" (Friedman) advocate for UBI. But thank you for revealing your thoughts on MLK through your question.
MLK is largely seen as a virtuous, wise person. A lot of moral sentiment enters into people's opinions on social economics. Also, people look to group sentiment to calibrate whether a proposal is more extreme than they want to think of themselves/be thought of.
MLK having expressed a favorable opinion about it makes UBI less susceptible to "that's evil, naive communism"-style attacks.
Close, but the most efficient way to help people is to provide the services they need without depending on the private sector to deliver them. For example, if cash benefits are universally increased by $500, low-end rents will also increase by approximately that same amount, like clock work. UBI would be a catastrophe for many reasons, but this is the most straightforward of them.
That argument about UBI may be true ceteris paribus (all else being equal), though even then it may not. The assumption seems to be that all other money flows and incomes remain the same and demand grows while supply remains the same. UBI (there are many proposals/variants) would likely require taxes that will make it basically zero beyond a certain level of income and negative further up (increase in tax on upper brackets). UBI will also incentivize some people to stop working and rely on UBI, so net effects won’t be a uniform increase in buying power. Rents are not uniform geographically and area usually related to how desirable a place is and how much work there is in the areas. With UBI consumers can choose to move away from jobs centers.
Like I said, this is only the most straightforward problem with UBI. The most damning problem with UBI is that it's still capitalism, i.e. the capitalists will remain in control. As a result, UBI recipients, like the poor in developed countries today, will remain what Karl Marx called a "reserve army of labor." The UBI will always fall short of what is necessary for a healthy or dignified existence. This instrumentalized suffering, just like the permanent unemployed class in the US today, is a crucial component of industrial capitalism. Effectively, under UBI, nothing will fundamentally change.
I do support UBI because it will probably prevent some number of deaths of despair, but capitalists will never let UBI happen for this reason. The reserve army of labor must be trimmed and maintained to prevent a worker uprising, which is the primary function of the opioid crisis.
Sadly, communism worked out even worse. When communists realized that NEP worked too well and peasants started to get out of poverty, they instituted terror to “prune” the population and “remind them why they need” those said communists (a reference to V for Vendetta movie line). Just the best known example, there were also 1920s razkulachivanie and such, https://en.m.wikipedia.org/wiki/Great_Purge
Your narration is so nonsensical and unserious that even the link you yourself shared undermines it, and of course it does. Wikipedia is a well-known liberal anti-communist institution, but at least they do some diligence.
Greed, seemingly fundamental human nature, causes corruption and suffering. I don't think we've yet developed a society or tool that is immune from such issues, though competition among providers does seem to help.
Sounds like a recipe for increase in demand for goods/services, coupled with a simultaneous reduction in productivity. Won't this just make the country as a whole poorer?
First-order, yes: Redistributive policies don't have the sum of the country's wealth as their primary optimization objective. Arguably, their goal is closer (but not quite) to the sum of national utility, which follows from diminishing marginal utility.
That being said, there are also claimed and real second-order effects of policies whose first-order economic effect is deadweight-loss. The entirety of government fits this description! To use the most trite and least controversial example, confiscating resources to build roads is redistribution from heavier taxpayers to heavier road users (incl downstream beneficiaries), but the second-order effects of a functional transportation are enough that we don't consider it to "make the country as a whole poorer"
This redistribution already happens with progressive income tax brackets and tax refunds that don’t depend on amounts paid in. This is US tax code today. Might as well have a better safety net in case things go south.
For your housing example, we just need to produce more housing - but so many people are opposed to it. It's not that the private sector doesn't want to, obviously, they just aren't allowed to. You're making a good argument that we should allow for more housing to be built, but I don't see from your argument why it's better for that to be the government.
I can't think of many examples where the government does a better job producing things than the private sector. Even in countries with, for example, socialized medicine, and assuming you think that works well, the services (I think) are still provided by private companies. Maybe the VA Hospitals in the US - though I'm not sure that's an example of the government doing better or not.
> For your housing example, we just need to produce more housing
Existing property capital owners have a vested interest in not building more housing. Building more housing will negatively impact their profits. Existing property capital owners also have far more power than the petty bourgeoise investors seeking to "build more." This conflict of "NIMBYs vs YIMBYs" exemplifies a core contradiction of capitalism that Karl Marx articulated 150 years ago, except "NIMBYs" are not individual homeowners; they are rather the idols of the petty bourgeoise "YIMBYs." See: contradiction.
Objectively, the working class has no place in this conflict and will not profit from building more housing. Of course we should build more and better housing for working people, but that is not what the petty bourgeoise investors actually want; they want to build more housing for profit. Big difference.
I’ve always thought this same thing about UBI. Like that episode of Futurama where every citizen gets a $300 bill from the government and in the background of the scene right after they announce it, you see the 99 cent store sign being changed to the $299.99 store.
Low end rents are already really high and subsidies set a price floor.
A two bedroom hovel in my city nets about $1200 section 8 voucher. A two bedroom in a nice development in the burbs is about $1300, and includes parking, pool and gym.
Landlords are like oil people, it’s all about extractive value. You want to pump the most cash possible with the minimum overhead possible. Building housing gets attractive only when the government subsidizes construction through low rates and rapid tax depreciation. A relative was the lead on development of a $18M hotel. He probably has $750k in. Most of the money is made with accelerated depreciation. The hotel itself is an afterthought, you couldn’t build it without the backend tax subsidy.
That’s not the entire picture -Builder’s Remedy apperently is working: “ For example, after Santa Monica failed to pass a compliant housing development plan, developers employed the builder's remedy to move forward with the construction of approximately 4,000 new housing units spread across 12 new development sites.” https://en.m.wikipedia.org/wiki/Builder%27s_remedy
It’s “working” insofar as it represents a giveaway to value-extracting development interests, nearly all of which seek to grow the permanent renter class.
It remains to be seen whether that will reduce housing costs.
Santa Monica is one of the most desirable areas in greater Los Angeles. I doubt the demand for it is that shallow. However, this helps more people (who are likely well off) to afford it and reduce pressures elsewhere.
If your goal is a paid off place to live, SM isn’t the best choice unless you are either high income already or are set to receive a windfall somehow.
I don't think you understand what the word efficient means because what you said about it is certainly untrue. The private sector will almost always deliver a better result as long as you mitigate market power abuse. You are basically saying it is more efficient to deliver services through a public system because said public system failed at mitigating market power. In the rent example a lot of that market power is even self inflicted by said public sector via onerous zoning and permitting regulations that make development only plausible via large, oligopolistic systems.
You assume a free market economy that does not exist. Rent is a good example because regulation is driving it small land lords in favor of a few large corporate land lords that collude on rent using common algorithmic models.
In my country there used to be a government-owned airline with a monopoly. Tickets were so expensive that only the wealthy could afford them (yet somehow the airline still lost money). Then the market was thankfully deregulated. Competition substantially lowered the prices, and gave people the freedom to choose which airline to fly on.
No, I assume the free market that does exist, i.e. the one where the outcome of competition is monopoly/oligopoly. On the way to oligopoly you get all these sweet, sweet benefits from competition, so one of the major goals of government has to be breaking up the ologipolists/monopolists or at least regulating them in such a way that they can't exercise market power (i.e. mitigating market power) so we can keep competition fierce and keep benefiting from said fierce competition. Doing the above has mostly been an utter failure in America and Canada since roughly the 1970's.
It's interesting that I said government self inflicted a lot of this in the rent space by over-regulating and you seem to think this is an example of the free market not working rather than the government breaking the market.
Mostly the issue with being a small landlord lies in how the landlord-tenant laws are written to treat you like a large corporate landlord. You have the same legal obligation to go through very lengthy eviction processes and to be very verbose about criteria but you can’t amortize the risk of a bad tenant over even tens of units like a corporation can. If you get one bad tenant they can cost you more than you get from them in rent, and they can destroy the rental house before you get to the eviction hearing.
I’ve had more than one conversation with my wife about just keeping the house empty instead while we’re gone, but I still think I have a moral obligation to rent to someone if I can.
I think short term rental lowers that risk by having more renters but none under contract. Air b&b is a terrible thing but also the local maximum for individuals
"too much material wealth is captured by rent-seeking middlemen controlling access to location" is a problem with your property regime.
yeah, by extension, it is a problem with any action you take under that property regime. but don't let that prevent you from talking about what the solutions to problems must be.
this is only true if everybody needs the same services, thus everyone uses UBI for the same thing. In the case of rent this would point to a systemic issue for which cash payments is not going to correct it, but there are a lot of varied needs for which UBI far more efficient than a government program addressing it directly.
Just replying to myself to make what I hope is an obvious point: Yet, giving money does not in itself create any new stuff to buy. It pushed prices up, and (at least temporarily) profits for those businesses providing the stuff. Nevertheless, it does even things out, and the higher profits will spur more competition in those industries that produce the things poor people are buying (if allowed), which ultimately achieves the desired result.
But any which way you look at it, and even if not perfect, giving money is the best way to help of the available options.
>A much more efficient way to help people is just to give them money directly, and then people can spend it on whatever they think they need.
Capital tends to accrete capital. If you aren't actively hostile to passive capital accretion, eventually you'll end up with a handful of people making most of the capital allocation decisions.
> making most of the capital allocation decisions.
Unfortunately "making the most" sometimes (usually) means manufacturing fidget spinners for direct landfill deposit, instead of allocating resources for housing, healthcare, food, and education.
...or creating transaction opportunities by inserting transaction processing medium where none previously existed.
See the bloody scooter rental people, printer companies trying to funnel people to ink by subscription, Keurig/Juicero. Practically every fintech ever.
I don't believe it works like that when everyone has their needs met, specifically with UBI. Possible losses from breaking the law and getting caught would drive the price of white-collar crime up non-linearly. It would also be easier to unionize, which would help combat inequality.
What he means is that in a system with exponential growth, people who reinvest will eventually become a much bigger part of the economy than those who don't (for whatever reason). People with a disproportionate amount of power may use that power to get rid of UBI.
I strongly believe the opposite. Fighting poverty should focus on things intended to prevent people from becoming poor, including in the next generation, not helping those already poor - more often than not, they have their life choices already made and they are impossible or incredibly difficult to alter, that's not a good allocation of resources.
I really don’t believe it’s impossible. And providing a way out of poverty for someone’s parents also necessarily lifts that child out of poverty. Even a thousand dollars is a life-changing amount, and we shouldn’t overlook the impact that extra resources can have on someone’s life. Buying breathing room to make different choices is one of the most powerful things we can do to lift people out of poverty.
I disagree to an extent. I know people on WIC, TANF, etc. who get subsidized internet, discounted property taxes, etc. Almost all of the ones I know game the system to their advantage one way or another.
I see people stop working because they'd rather not deal with others when they already have their needs met - I have no problem with this.
I see people who continuously pop more kids to keep the gravy train running - this is an issue.
I have seen people sell the products (a lot of it is food) they get for free and people who sell the vouchers because they already have too much; this to me is an issue too.
I see people who lie all of the time to get benefits they wouldn't qualify for otherwise; literally millionaires lying to get free stuff from the government.
I don't have a big social circle but it seems everyone I come into contact with is on the take and sucking hard on the government teat.
I think the approach needs to be more holistic and consider all of the different programs people qualify for - between WIC/TANF most people will get more food than they can consume. I think they should be nontransferable (maybe it already is, I don't understand how people end up selling them) and I don't think they should be progressive. Means-testing should be ended and everybody should qualify for these programs.
I also support a shift to UBI, but your description of TANF/WIC is not grounded in reality. TANF has a 5 year lifetime, and many states actually have lower limits food stamps do not come close to covering the costs of feeding a family People do sell food stamps sometimes, not because they have more than they need, but because they are desperate for cash to pay for other necessities such as utilities.
The idea that people are getting by for years and years based on these as sources of income is a myth.
Thanks, to clarify I don't begrudge TANF/WIC but those two are a short list of benefits that are available. Rent assistance ($), daycare assistance ($), free healthcare that's better than what I can get on the market regardless of $$$$, etc. I explained in other comments how a lot of it works, and I think rather than means testing I would like to see a different form of enforcement for these programs.
> I see people stop working because they'd rather not deal with others when they already have their needs met.
While some folks do get benefits when they could be working many more are denied anything despite obviously being disabled and the money that is paid is a relative pittance that few would choose given any alternative.
> I see people who continuously pop more kids to keep the gravy train running - this is an issue.
This is basically a myth. There are TANF in most states has a lifetime limit of 5 years or less and we are talking about $283 per month for a single parent single child household and it doesn't scale linearly. The next child nets you an additional $44 for instance. Exact figures vary by state.
People effectively sell vouchers or food benefits because they are desperately poor and need other things. As the refrain goes "food stamps don't buy diapers". In the case of WIC the vouchers may be for things that they literally don't need can't eat which will expire and thereby be lost.
This is an example of the inefficiency of buying things for people instead of letting them buy their own things.
> This is basically a myth. There are TANF in most states has a lifetime limit of 5 years or less ....
Because you can't imagine it or haven't seen it that doesn't mean it's a myth. I have known women who continuously have more kids from different fathers. I think many people ignore the fact that people can also qualify for getting their rent paid, free healthcare for the kids, etc. I have seen it in several different states, lived in the same apartments as them and now know about them from their family members who are my acquaintances.
But I agree with you on inefficiency. As I said, I think we need a holistic approach that looks at the overall needs and gets rid of some of the programs and just hands out cash as you said maybe.
If 2+2=4 it doesn't matter if you "witnessed" it being 3. Anyone who has actually interacted with poverty in the past 30 years would know that benefits are miserly, sparse, and limited.
Notable virtually no cash money which is basically required to live and work requirements for other benefits.
Welfare is what poor people rely on in addition to working not what they do instead of working.
This is why virtually everyone on food stamps is either temporarily between jobs, working, retired, disabled.
You can't just keep having kids and actually live indoors because the government will give you more food stamps but not more money.
What part of tanif being a few hundred a month and having a lifetime maximum of 5 years isn't getting through?
More kids = more poverty. The only angle to work is child support not welfare which is obviously the disconnect here.
I don't think I have seen something as disingenuous on HN as trying to negate somebody else's life experience by saying "2+2=4". I won't be engaging the contents of a bad faith argument.
Just because a plurality or even majority of people aren't doing it doesn't mean it doesn't happen. As I've stated, I'm recounting these scenarios from my experience which isn't vast but it tracks in every state/city I have lived in (and I have lived in several).
It's a miserable living experience for their children. Welfare queens do exist even if they don't look like the media portrays them.
As I stated, I'm not against social programs, but I think there's substantial waste and program goals need to be realigned. It needs to be reimagined, and not from ivory towers like the techno-elite that gathers here on HN.
The 100% truth is that you had no idea of any of the detail about whatever you saw. Unless someone has a massive trust with a procreation requirement, there is no free ride for children in America.
I had direct 100% access to every single aspect of one individuals life. Talked directly about the subject dozens to hundreds of times.
I absolutely know both the financial details as well as personal motivations. Others in that sphere I do not have as much intimate knowledge of but they follow the same pattern and social circles.
This topic is something HN (or rather the demographics that tend to post on HN) simply has a giant blind spot on.
It's not so much that each kid is a net benefit. It's that having kids are a requirement to access many government programs in my state. Single folks simply don't get help. I still know people in my past life who have never worked a single day and have had all expenses paid for by the state using such programs. Add some child support in and it's a way to live, even if a pretty crappy one. There is also very little planning for when the benefits end as the kids age out.
I really think every young adult should have to spend a year living in a section 8 complex as an assistant super. It may open many eyes to the state of the US and our social condition.
You've just modified your previous statement. I absolutely believe someone might have a child to get child support or even qualify for benefits.
I don't believe anyone is popping out multiple kids to rake in extra benefits. There is no situation where multiple kids make life easier for the poor in America.
I'm not sure where the disconnect is. You pop out multiple kids so you extend the clock, not so you get multiples on any sort of payments (aside from perhaps child support, but that's a different topic). This is what OP meant by "extend the gravy train". Much subsidized housing is only practically available to women with dependent children.
As stated, I have personally witnessed this exact behavior. The common belief in certain circles seems to be this is unheard of and uncommon but I absolutely do not believe the mainstream statistics on the matter.
It's not just kids. It's a whole way of life. Usually SSDI is involved among other such shenanigans as well. It goes deep - to the point of ensuring your teenage kids show up to school exactly the minimum number of days to not get dinged on benefits.
Having one kids gives one a dependant child for at least 18 years which is virtually all of a woman's child rearing years. There is no clock to reset.
" not just kids. It's a whole way of life. Usually SSDI is involved among other such shenanigans as well. It goes deep - to the point of ensuring your teenage kids show up to school exactly the minimum number of days to not get dinged on benefits."
Adding details isn't making this more plausible. Nobody is denying YOUR life experience just your third hand misunderstanding of other people's.
Now you have them living on child support, fraudulent disability, and neglecting their kids.
Have you considered that maybe you have skeevy family and this is not normal.
I don't know what it's like now, but in the 1980s, we received aid, and you certainly couldn't live on it. It was a horrible existence. Yeah, we'd sometimes game the system. For instance, we knew if we bought something for $4.01, we'd get the $0.99 change back as cash. We'd trade vouchers for cash sometimes (to, say, put kerosene in the heater) But, we're only talking about gaining a few hundred dollars a year. If people in your social circle are living large, I'd love to know their trick.
Yeah as I said in another comment, it's a mostly miserable experience on the kids and yet some garbage humans do decide to live strictly off of it. I'm not sure how we could disincentivize that, but I do think means testing should go.
The people I have seen who really milk the system work for cash, live with their boyfriend/SO and remain unmarried to keep the benefits coming (and just lie saying that the father isn't in the picture). So the burden of healthcare/food/rent is on the state and all of the income is fun money. Trucks/SUVs, jewelry, trips, rental houses, etc. follow. The kids only benefit as far as not starving, but they get free food at school/day care most of the year anyway so most stamps get sold. There's some who do very well and just stop caring about TANF anyway because it's overall pretty low value.
Another I've seen is just lying on the application so they get their benefits (I imagine similar to the others they say their husband/SO isn't in the picture) while they have a steady income stream from renting out their house.
Perhaps overly simplistic, but my suggestion is to spend money where there are true economies of scale, or services that individuals can't manage on their own such as education and health care. And in all other cases, just give money. For instance the food industry is already scaled up.
I'd argue that is the same reason we should simply have vouchers for education, instead of pouring money into a public school system, simply enable the people to spend money on education in how they think is best for their children.
Typically vouchers have the money going to the school, and therefore becoming a price floor. And once again looks like govt spending instead of giving.
Much better would be to give everybody $1000 (or pick your number) per month directly, when they attend a private school. Regardless of how much that school costs. This preserves everybody’s full agency, as well as healthy competition.
This stems from the fundamental conservative beliefs that the system is fair and your station in life is a result of your actions or efforts. Thus a fundamental opposition to actually charity and instead dangling opportunities for people to help themselves.
Running those programs is of course non trivial so the capitalist naturally offer to run them for the government at a modest fee.
> This stems from the fundamental conservative beliefs that the system is fair and your station in life is a result of your actions or efforts.
I don’t think I’ve ever heard a conservative say that life is fair. It’s more common to hear talk about “life isn’t fair” and how people shouldn’t expect every unfair thing to be corrected for them by someone else.
There’s definitely still some who believe in the American dream idea, where anyone who comes to America and works hard can pull themselves up by their bootstraps and become successful.
That often leads to the idea that if you’re poorer than me, you’re probably not working as hard as I am. And giving you handouts is unfair and offensive, because you just need to work for it
> There’s definitely still some who believe in the American dream idea
America is objectively and statistically one of the better places to succeed in this way, despite the shortcomings. If you believe that nobody or very few people think the “American Dream” is real, you’re probably in a bubble. This kind of out of touch cynicism is only really rampant on social media.
Objectively and statistically speaking, it's really not. The Global Social Mobility Index 2020 places it at 27th place. Considering its economic place in the world that's pretty bad. At best you could say it's slightly above-average.
> "There’s definitely still some who believe in the American dream idea, where anyone who comes to America and works hard can pull themselves up by their bootstraps and become successful."
Which, in the case of immigrants coming to the United States, is often exactly what happens, proving that it is still mostly true.
No one said that it was a creation of conservatives, just that it was a belief. People's beliefs are usually impressed upon them by externalities like the community that raised them or traumas they endured.
The government, advocacy groups, etc. need the problem of poverty more than they need the solutions to poverty. This is consistently true for every societal problem: racism, sexism, immigration, etc.
Is it? SNAP, TANF and EITC are very much giving people money. The biggest missing piece by far is universal healthcare followed closely by housing scarcity.
You really don't understand snap if you think it's "giving people money", between the restrictions on what you can buy with it and all confusing red tape to sign up.
Based on the criticism I read about it, I think these clearing up these misconceptions is important if the USA is going to have a working welfare system.
This is the majority of spending on poverty, and it's literally direct transfers.
So I'm really confused by this comment.
The reason we spend money on special programs is because things like job training and drug addiction would never be taken care of by just handing out free money.
Ugh, I completely disagree with this. The government should NOT be handing out money to anyone. I also believe that they should be spending far, far less on public programs (though I do think that public healthcare is worthy of consideration).
Promoting affluence and the individual pursuit of happiness are two essential core values of the USA.
> The government should NOT be handing out money to anyone
Well, then we better get rid of our entire banking, payments, and public debt financing system.
It was a bit of a mind bender to learn that Treasury auctions cannot fail. The Primary Dealers have to make a market, the the Fed has to provide them with whatever additional reserves they require to do so.
That also puts the lie to the nonsense about what happens if China stops buying our debt. Directly of course the answer is absolutely nothing. The Primary Dealers will continue to make a market. We would however notice if China embargoed us. And that’s something a lot of people somehow miss by focusing on the financial shenanigans. At some point economic activity has to be about real production.
And that’s the best argument for UBI. Postulate that the productive side of our economy is running considerably below capacity and then increasing demand via monthly helicopter drops isn’t crazy. I have my doubts about the truth of that postulate though in the real economy.
I don't know if you can identify just one main problem. Another big issue is the all the means testing and second order effects of work requirements, etc. These make it hard to get aid to the people who need it and to allow people to find or train for better jobs.
It's totally systemic. America has socialism for the rich and rugged individualism for everyone else.
> they usually focus on spending money instead of giving money to people who need it
From my perspective, the issue is that a lot of politicians operate as goal-oriented rather than systems-oriented problem solvers.
Many government programs generally operate as "give a man food" rather than "teach that man to fish".
It's no wonder that many problems are far further from being solved despite decades of cash pumped into them.
PS: If you're feeling butt-hurt about a comment, I welcome constructive feedback. Downvotes are fine, but do nothing to enhance mutual understanding. Tell me why goals are better than systems: I'd love to understand what the issue is.
In 2012, the federal government spent $668 billion to fund 126 separate anti‐ poverty programs. State and local governments kicked in another $284 billion, bringing total anti‐ poverty spending to nearly $1 trillion. That amounts to $20,610 for every poor person in America, or $61,830 per poor family of three.
Over, the last 50 years, the government spent more than $16 trillion to fight poverty.
Yet today, 15 percent of Americans still live in poverty. That’s scarcely better than the 19 percent living in poverty at the time of Johnson’s speech. Nearly 22 percent of children live in poverty today. In 1964, it was 23 percent.
I'll include a few here: Pell grants, SSI, and Medicaid. Including healthcare is the only way to reach that number, since it's the source of the vast majority of that total.
Why should healthcare spending be excluded from "anti-poverty" spending? The fact of the matter is that in the US, healthcare is privatized and people have to pay for it directly or indirectly (ie. by their employer). Therefore if the government is helping to pay for it, it's an anti-poverty program. It's not any different than food stamps counting as anti poverty spending.
Private healthcare in US seems to be criminally greedy.
Classifying healthcare spending as "anti-poverty" spending may lead to an inaccurate assessment of the effectiveness of these programs. Including healthcare spending in the evaluation of anti-poverty initiatives, it could potentially mask the true impact of more targeted interventions, such as food stamps, housing assistance, and cash transfers. This could, in turn, hinder the development of more effective policies and programs aimed at reducing poverty.
>This could, in turn, hinder the development of more effective policies and programs aimed at reducing poverty.
I don't buy this. If you want to figure out what the most effective policies/programs are, you'd need to run analysis on each program separately. If you did that, you would be able to separate out which parts had the greatest ROI. Dropping the most expensive component on the basis that it's ineffective is basically cherrypicking, especially when the claim that's being analyzed is whether government anti-poverty programs as a whole are effective or not.
Speaking as someone who’s been trying to help someone stay alive for several years, there is massive inefficiency and bureaucracy standing in the way of people actually getting help, presumably because we’d rather see many people suffer than a few people cheat the system.
Then there's my dad. I had to fight him to apply for benefits when he became disabled. While waiting at the benefits office I overheard one person behind the glass say to the person working with us "you going to get those crackers [a slur for white people] some cheddar [slang for money]?" He was ultimately denied and, of course, didn't appeal - he just identified deeply with the rejection.
It's a particular incidence of racism by someone working in a system, but I wouldn't call it "systemic racism" because there is not a recurring, broad, historical problem of white people not being able to get welfare. In fact, the majority of welfare recipients are white.
Additionally, most of the poverty programs I am familiar with are not a subjective decision process. You either meet the requirements or you don't. If you don't, they tell you why and you either agree or you have to appeal and get whatever incorrect information they have on file corrected.
Beyond the bureaucratic nightmare, stigmatization of government assistance is terrible. When one considers the shape of wealth inequality in the US, the cruelty expressed by the prejudiced employee is likely due to their perception of the novelty and some entitlement to abuse the power dynamic. Not excusing or downplaying the event, marginalized people (including but not limited to those with disabilities) regularly experience indignities built into many institutions. Despite being visibly White, the concept US whiteness since it's inception has always been amorphous, exclusive by design, and generally adjusts definition based on the complicity to harm the 'other'.
I live in Europe and a large part of my (extended) family works in the social sector and for all the good they do I can never shake the impression that the first to benefit from all these social programs is the people that organise them. Same thing with a lot of startup and business accelerators or professional networks they love to talk about how they are helping but I've learned that they do (almost) nothing for you and that it is better to invest your time in executing your own plan.
It is estimated that the state of California paid out more than $30 billion in fraudulent COVID related unemployment benefits. At this point these systems can be massively cheated when made easy (ie., no in-person application required). It has been estimated the 35% of unemployment claims are fraudulent[1]. Not just a few people unfortunately (or maybe just a few doing a huge amount of fraud, but fraud is a big problem).
Unemployment is a completely different beast from all of our other social programs in the US. In a relative sense, it’s brainlessly easy to get on unemployment.
Lumping all social programs together and pointing out the one with the biggest fraud issue is disengenious —- e.g. the SSA reports that our disability programs have a fraud rate of less than 1%.
The right answer to this is to prosecute the offenders, rather than implementing a rigorous means test process and shutting out people who might actually need help. It’s less efficient, but it’s the only humane option.
If it were just a defense against "cheating" this would make sense. Imagine changing the word to "extortion" or "ransom" and the issue is obvious-- when you pay people to do bad things, the problem gets bigger.
However, the systems actually are gatekeeping on the basis of desert or merit. That's a more debatable virtue but the only viable alternative is to instead push out aid through local, flexible, discretionary face-to-face interactions between people who know one another well...... like when you helped a personal friend......
Just lower the amount of means testing for programs like SSDI. I’m not even advocating for getting rid of means testing, just make it less onerous. It’s incredibly difficult to navigate and, ironically, puts a lot of pressure on people who are disabled.
> there is massive inefficiency and bureaucracy standing in the way of people actually getting help,
That's because that bureaucracy isn't there to serve its clients. Its there to serve itself. Those are politically popular jobs that flourish on backs of the underserved and impoverished. There's no incentive to reduce the friction when for the most part poverty is seen as a personal moral failing. It's not the system. It's "them". And the system perpetuates itself and that belief.
That's moving the goalposts though, now it's "yeah, they actually do put in all this money and time and effort to fix it, it's just muddled in bureaucracy so doesn't work well". The original claim was that the effort/resources aren't being put towards it, but they are.
I don't think that is moving goalposts. Some of that bureaucracy exists and consumes money explicitly because certain political party wanted to make access to programs punishing and harder.
They are not money spent to help anyone, they are money spend to prevent access to existing programs.
Yup, what’s more, is that people who are not trying to help have inserted themselves into the money flow.
Take the intensive case management for instance. If you are severely disabled and in need of assistance, the state will pay for a case manager to help you with life.
Case managers are paid $7 an hour when alone, $14 with a client. When they are with a client, they are instructed to do mostly paperwork. The goal here is to not actually help people, but to fill out paperwork in proximity to them to collect state funds, while paying social workers peanuts without benefits. So the case manager helping the impoverished is herself, financially insecure.
So where is all the money going?
A company manages the case managers, and they pocket the bulk of state funds. The management, board, and directors all live in very large houses and drive very expensive cars. Case managers drive 2002 Honda Accords without AC or a radio. Clients live in squalor, just happy to have someone doing their paperwork nearby. This is the American caste system.
So I think you can see, even when we fund social services, the money still ends up in the hands of the wealthy. It’s just what capitalism is designed to do.
Capitalism is simply allowing private citizens to own, in part or full, the means of production such as farms and businesses. I'm not sure that capitalism is responsible for a decision about dispersing government money to create terrible jobs resulting in mismanagement and horrible customer service.
> money still ends up in the hands of the wealthy
I think the definition of wealthy requires money end up in someone's hands.
>simply allowing private citizens to own, in part or full, the means of production such as farms and businesses.
To me this is just free enterprise and private property rights.
Capitalism is more like when the strength of the capital itself gives it a significant or outsized influence compared to the fundamental enterprise and private ownership interest.
Usually when Other People's Money is involved in ways where a chain of resources & debt is built that can influence enterprise and ownership in ways that might not take place otherwise.
Both positive and negative outcomes can be leveraged or exaggerated, for instance in the case of a benevolent capitalist compared to a greedy one.
So you latch on to the outsourced part and complain about capitalism, or we could latch on to the government-funded part and complain about socialism.
I think more than capitalism v. socialism here the problem is that we are governed by filth who are looting public treasuries for themselves and their buddies.
That's not how I read his comment at all: if the government grants are not doled out with oversight, it's entirely rational for greedy actors to minimize the dollars ultimately reaching the intended targets.
> we are governed by filth who are looting public treasuries for themselves and their buddies.
Hence the conservative ideal of smaller government with limited powers, so that there is both less to loot from as well as a lesser ability for those in power to direct those treasures to themselves.
And then it's put into practice and it looks like Alabama, they are running the natural experiment in Alabama since 1901, the 1901 constitution and its impacts on the state are well-known.
To get any kind of local tax raised, the local authority has to go through the oligarch-controlled legislature in Montgomery, where it would be shot down. And like that you end up with county roads on a 70-year replacement schedule.
I'm focusing on the bad actors, who are the ones extracting all of the money from the system as profit. That's what makes this dysfunctional. If they were gone, the people trying to help would have more resources. Notably, these people hold titles associated with the artifices of capitalism. The social worker doesn't need a board of directors. She knows what needs to be done. It's the board of directors who need the social worker -- not to fix anything, but to do the appearance of work while they collect rent checks from the government. It's disgusting.
We can imagine this enterprise organized another way which actually helps people. Fewer Ferrari dealerships would make sales, but that's a sacrifice I'm willing to make.
> In 2012, the federal government spent $668 billion to fund 126 separate anti‐ poverty programs.
This is simply not true or at best, misleading. The 2012 expenditure was $3.6 trillion, and 70% of that was defense, social security, medicare, and interest expense. You're saying more than half of the remaining spending for the entire government was anti-poverty? That makes zero sense.
I assume what you meant was 'authorized', and it was an amount spent over a long period of time. $20k per person, great. What percent actually gets to them? Maybe half at best? Great, so $10k. Over how many years? 5? Ok, so $2k a year at best estimates. Realistically it was less and over a longer period.
Whatever that means - only yesterday (https://news.ycombinator.com/item?id=35391868) the fact that US life expectancy on average is the same as the life expectancy of the citizens of Blackpool, England was discussed here. Blackpool is the most deprived city in the country, and that really says something - England isn't rich and has many post-industrial wastelands.
Your statement is reminiscent of the prophet Ezekiel and his "Defiled Bread" (Ez 4:12-17), as that passage is called. Instead of human feces, Ezekiel got to use cowpats, but unlike you, the prophet still found it disgusting.
First time I hear of that theory, do you have any references into the literature?
I have always interpreted the passage literally, as a reenactment of what the citizens of Jerusalem would have to endure while under siege by the forces of King Nebukadnezar.
Cowpats are what poor people used as fuel. It was a common practice in India till about 20 years ago. Mix cow dung with hay, make it flat, dry it and you can use it as fuel. I am sure it is not India specific thing.
The same cowpat is also used for to burn the offerings in the temples.
That article suggests high taxes are the reason for the increase in poverty from 1964 to 2012 yet taxes on the top tax bracket were cut in half over that period.
It's clear as night and day that the reason why wealth inequality and poverty has been skyrocketing over the last 50 years is due to plummeting tax rates on the wealthy.
I’ve been poor. I deal with chronic pain and, for a long while, it rendered me unable to work.
First: $1717 is a very low amount of money to live on.
I covered my costs in about $1200/mo while I received from room and board from family. It was extremely difficult to get my spending down to that, I had to default on loans and I expect it will take the better part of a decade to build credit again.
Second: how does one obtain this $20,610? I was denied virtually every social program I tried to sign up for. I was only able to cover my costs thanks to the charity of others.
In America, we don’t believe you are unable to work until you bring a lawsuit in front of a judge with evidence. Any social programs to give money to needy citizens is held up in bureaucratic red tape so they can get higher salaries (paid from funds allocated to the program) and waste more money. My son is autistic and is unable to work and it took four court appearances to get his social security benefits approved.
I would argue that the red tape is not so bureaucrats can make more money, it's that Americans have a very, very strong aversion to seeing people benefit from social programs that they think are undeserving. So we put all of these hurdles up to make things 'fair'.
Just look at the difference in outrage between when there's some story of someone on public assistance buying something like smartphone, vs the reaction when we found out about all of the businesses abusing the PPP loan system. Or the fact that many of the PPP loans were forgiven.
It's like as a country we're fine with wealthy people abusing the system. But then we turn around and would rather let 100 deserving people struggle just so maybe one person can't get a free ride.
Americans seem to have a special aversion to weakness. Being poor is a facet of that:
On public assistance and buying a smartphone? “That’s irresponsible and abusing the system!”
Wealthy and taking PPP loans or dodging taxes? “That’s smart and opportunistic thinking!”
In other words, the rationalizations exist to justify beliefs that were conceived long before these examples were discussed: namely, the wealthy are inherently more virtuous and better people all around.
We are unable to think differently on this because digging into it too much risks tearing down most people’s fragile motivational structures around their own striving.
Wasn't the entire point of the PPP scheme to give away money to be used for payroll? I didn't use it, but it seemed to me like from the outset that it was designed to give away money, notionally documented as a loan, but one which would be forgiven if used to provide payroll continuity to employees. (In other words, documented as a loan so they could claw it back legally if you didn't use it for payroll or other approved purpose, but if used for payroll, it was a loan in fictional name only.)
I don't think that was a mis-use of the system, but rather the intended use of it. (We can argue whether it was a good or bad idea, but it plainly seems within the bounds of the program as designed/intended.)
First: I’m sorry about your son’s experience. My impression is that something like a court appearance would be overwhelming for even an autistic individual with lower support needs.
This is pretty much where I left off with social security. Luckily for me, not long after my rejection I found a treatment option that helped me get back to work. The timeline for my first appeal before a judge would’ve been a year or more.
I think there are many (probably most) people who are sympathetic to and willing to open the taxpayers’ coffers to support people who are genuinely and durably unable to work.
I also think there are many (perhaps most) who are reluctant/unwilling to extend those same benefits to those are merely unwilling to work.
So, we use bureaucrats and courts to confirm that a given situation is the former and not the latter.
The government is very good at filtering that money through processes and contractors that extract as much of it as possible. The main benefit of reducing the safety net to a basic income is the elimination of a massive amount of administrative overhead.
As a random example of subsidy of the wealthy, every year, the government loses at least $70B to just the mortgage interest deduction, which is allowed for the first $750K of the value of up to two homes. That is $2,160 for every poor person in America, or $6,480 per poor family of three.
edit:
> Little of the deduction’s benefits go to households that have difficulty affording a home. Data from the Census Bureau’s American Housing Survey show that in 2011, 10.5 million homeowners faced what HUD calls “severe housing cost burdens,” meaning they paid more than half of their income for housing. Some 90 percent of those homeowners (and about 40 percent of all homeowners) had incomes below $50,000, yet JCT estimates for 2012 show that homeowners with incomes below that level received only 3 percent of the benefits from the mortgage interest deduction.
At the same time, 77 percent of the benefits from the mortgage interest deduction went to homeowners with incomes above $100,000, almost none of whom face severe housing cost burdens. Some 35 percent of the benefits went to homeowners with incomes above $200,000; taxpayers in this income group who claimed the deduction received an average subsidy of about $5,000.
Only one home is deductible:
“ The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and isn't deductible. Main home. You can have only one main home at any one time.”
“ Mortgage interest. Many U.S. homeowners can deduct what they paid in mortgage interest when they file their taxes each year. (The rule is that you can deduct a home mortgage's interest on the first $750,000 of debt, or $375,000 if you're married and filing separately.”
The mortgage interest deduction is "qualified residence interest" in the statute. 26 USC §163(h)(3) allows deduction of interest "with respect to any qualified residence of the taxpayer."
"Qualified residence" is itself defined at 26 USC §163(h)(4)(A)(i) as the taxpayer's "principal residence" and "1 other residence of the taxpayer."
> The government is very good at filtering that money through processes and contractors that extract as much of it as possible. The main benefit of reducing the safety net to a basic income is the elimination of a massive amount of administrative overhead.
This isn't really a benefit though, as the administrative overhead costs a lot less than the alternative of giving everyone money.
“There is a Clinton-era welfare programme called Temporary Assistance for Needy Families. In 2020, poor families received just 22 cents in every dollar it disbursed. The rest was used by states to pay for things such as job training and even abstinence-only sex education.”
What an absolute gem! An example of both that there is nothing as permanent as a temporary government program, and a government program whose name only marginally reflects what it actually does.
The program wasn't temporary, the assistance is. TANF was never meant to raise people out of poverty, it is a program designed to help those that fall on hard times to recover quickly, hence the job training.
The recent Last Week Tonight episode about USA welfare TANF funds covered how a lot of the money budgeted for poverty relief might not even be used for it.
Put another way, the government has funded programs, programs that do well to perpetuate the programs, but too little to actually address the problem they were created to address.
It's the Poverty Industrial Complex.
That aside, with regards to the data / statistics you've sited, my understanding is, many experts believe the income levels set by the government to define the poverty line are artificially low. If the line was more realistic the poverty rate would be much higher.
If this is even a slight bit true, then the government's "war on poverty" is another lost war.
The government authorized. Don’t say spend. Spend assumes it went where it was supposed to go. Authorizing and then absconding with funds is what really happened.
This presents a highly complex challenge. It is really not so simple.
Consider San Francisco, for instance. As a city with predominantly liberal and Democratic values, it is surprising that public schools have been closed throughout the year. And we all know how that had significant negative impact on underserved and economically disadvantaged children.
While some fortunate children have responsible and hardworking parents that just take kids with them leave them in the car while they clean houses (first hand experience), this is not the case for the majority: not supervision at all.
Addressing this issue is far from straightforward. When attempted to raise concerns, I was may labeled as anti-science and trumpy. I also mentioned that private schools have managed to remain open, their effor was to close them rather than finding solutions to support public education.
I really do not know and I think nobody who is not poor cares. Regardless what they say.
I'm not an expert on poverty, but I don't think it's as simple as concluding that anti poverty programs are a waste of money. For one, looking at the cumulative amount over time is a pointless metric. Second, we cannot deny that a lot of people were genuinely helped by these measures and managed to climb out of poverty and start giving back to society. Third, poor Americans still have a superior standard of living than most of the world. American poverty is its own league.
"Even if you're stuck in the bottom 5% of the US income distribution your standard of living is about equal to that of the top 5% of Indians. Even if you're in the bottom 10% your standard of living is about the same as that of the bottom 10% in other rich countries (which, so we are told, care so much more and do so much more) like Sweden and Finland. And when we sweep everything together into some sort of quality of life measure the American poor are better off than the French or German poor."
"A groundbreaking study by Just Facts has discovered that after accounting for all income, charity, and non-cash welfare benefits like subsidized housing and food stamps, the poorest 20 percent of Americans consume more goods and services than the national averages for all people in most affluent countries. This includes the majority of countries in the prestigious Organization for Economic Cooperation and Development (OECD), including its European members. In other words, if the US “poor” were a nation, it would be one of the world’s richest."
Also, official data on US poverty may overestimate the problem.
"US low-income households greatly underreport both their income and non-cash benefits"
"There has been “a sharp rise” in the underreporting of government benefits received by low-income households in the United States. This “understatement of incomes” masks “the poverty-reducing effects of government programs” and leads to “an overstatement of poverty and inequality.”"
Comparing us revenues with eu ones is tricky. Yes, in raw dollars those poor are better off in the US. But, and I admit to not having read any of those links, my guess is that if you compensate for things like public transport, healthcare, education and other things, the US doesn't compare favorable when you're poor.
Yeah.
Increasingly entrenched wealth inequality, and failing public services means the USA as a whole is looking more and more like a 2nd world state these days. The 1st world part is increasingly just for the upper classes.
This study could be summarized as "the poorest 20% of USA residents have as much money spent addressing their poverty as the average citizen of a European country".
But once you pick through the details you realize they are looking at expenditure , not outcomes.
Considering this, and given the gross corruption and inefficiency of US welfare, most notably healthcare, it might be more accurate to say that "The poorest 20% of USA residents have as much money wasted on a farcical attempt to support them ..."
It's also notably harder to get to move up the economic ladder, the perception of employment stability, and trust in employment are dead in the American mind. My sister is a teacher who has a background in law, but she loves teaching. Sadly, teaching is what keeps her in poverty. It boggles my mind that those who craft new economic units are of some of the least paid.
Maybe even more perplexing is that wealth inequality is geographic of all things: https://itep.org/the-geographic-distribution-of-extreme-weal... This is in part due to the fact that we continue to tax income rather than wealth, and those of vying for scraps are among the first to champion such policies. That all ties back to the first thing I said, which is that economic fluidity is a long ladder now.
> Yet today, 15 percent of Americans still live in poverty. That’s scarcely better than the 19 percent living in poverty at the time of Johnson’s speech.
The poor then had much more thing poverty than we see today. Probably biggest change is more drug abuse now though.
> bringing total anti‐ poverty spending to nearly $1 trillion
How much of that is spent on administering the programs and paying those administrators? May be more effective to simply consolidate it into a negative income tax.
The dollar amounts aren't really comparable considering that anti-poverty spending is a handout whereas the bailout under TARP was in exchange for assets.
>The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase toxic assets and equity from financial institutions to strengthen its financial sector [...]
>Through the Treasury, the US Government actually booked $15.3 billion in profit, as it earned $441.7 billion on the $426.4 billion invested
Turning $426B in 2009 into $445B in 2014 comes out to an 0.76% ROI, so not exactly a good deal for anyone but the shareholders who didn't lose their shirts.
> In exchange for essentially worthless assets, no?
Clearly not, considering they were able to sell it for a profit later.
>Turning $426B in 2009 into $445B in 2014 comes out to an 0.76% ROI, so not exactly a good deal for anyone but the shareholders who didn't lose their shirts.
I'm not claiming that it's a $0 bailout either. I'm only pointing out that $1 spent on anti‐poverty programs isn't comparable to $1 of TARP spending, so trying to directly compare the two like the parent poster was doing is misleading.
Note the CEO of Columbia/HCA who committed the largest medicare fraud in history is now US Senator Rick Scott of Florida who just so happened to have plead the fifth 75 times during his questioning.
It doesn't cite any sources, and it also omits time scales. It is basically impossible to fact check, which is by design. It looks quantitative, but it is just propaganda.
Likely. Libertarian-right and other right-adjacent sources often cite incomplete or incorrect numbers. The burden is on them to prove accuracy and, of course, good faith effort.
I do feel sometimes we've moved into an era where government thinks the objective is spending money, not solving problems.
You see this with homeless services, high speed rail, etc. The ability to write big checks is seen as a win, and the jobs it produces gets pointed to.
The fact that so many remain unhoused and high speed rail remains unbuilt doesn't ring the alarm bells that it should.
In NYC for example we've gone through some recent periods of spending $300/night to house homeless, migrants, hurricane victims, longterm in hotels. I am talking months to years.
It's unfathomable to me that the feds/state/city are spending $100k/year run rate to house people temporarily where the end state is they get kicked out or moved somewhere worse. All this while other homeless live in communal shelters that are filled with violence and crime.
For that price we could be paying 3 years of rent on a decent apartment anywhere outside Manhattan. We could be putting a down payment on a house for them & then employ them in some sort of works program at $20/hour. These are things that could actually allow them to start building their life back up.
>For that price we could be paying 3 years of rent on a decent apartment anywhere outside Manhattan. We could be putting a down payment on a house for them & then employ them in some sort of works program at $20/hour. These are things that could actually allow them to start building their life back up.
I'm not sure there is any incentive to solve the problem. And there is no accountability for anyone in government it seems, on either side of the aisle, at any level of government.
Societal structures arise to manage contradictions in society on behalf of the ruling class. One example of this is policing in the US: modern day policing arose from slave patrols [0]. This societal structure of slave patrols arose to manage the contradiction in society of slave uprisings or slaves running away on behalf of the slave-owner class.
The government is also a societal structure that arises in society to manage contradictions between classes on behalf of the ruling class. In the US the laws and enforcement benefit the ruling class.
Until a different ruling class takes over, America will continue to subsidize affluence rather than alleviate poverty.
That there might exist other influences behind modern day policing than just slave patrols doesn't free the institution from that stain.
Policing as an institution should be recognized as what it is - one social class being given tremendous resources to support the casual and regular enactment of violence upon other social classes.
I, personally, don't rely on violence, or threats of violence, in my day to day, and don't support anyone else doing the same, even if they think they really really really need violence in their lives.
Whether you consent to policing or not, police exist, and they protect you from people who don't rely on consent.
You can't absolve yourself of that by simply denying it. You'd need to make it clear that anything you temporarily possess is free for the taking and that people are free to assault or kill you without police response (and somehow convince the police to honor your wishes).
You and I have a different mental model of how policing works. I think you are both believing the propaganda about the existence of policing agencies, and projecting your beliefs about them onto me.
Police don't protect people from people.
People don't not assault and kill others because of police.
There's abundant counterfactuals I could list that demonstrate that people generally don't avoid unethical behavior because of the police.
And, police are often the originators of unethical behavior.
I humbly propose that you grow your mental model of policing in America to a more sophisticated level.
Every time I hear about slave patrols becoming police departments it smacks of a genetic fallacy: just because some slave patrols became police departments is that really a good explanation for why the Chicago PD or LA PD are bad?
Sounds like you don't like the assertion and are asking the asserter to do more work to convince you.
What books on policing have you read? What credibility do you bring to disregard the assertion?
And yes, the association between deputized slave patrols and Chicago and la police departments is sufficient to explain the harm these institutions cause.
Policing, as an institution, should be eliminated. Stop the paychecks, eliminate the categorical exception they get for doing violence to others.
> And yes, the association between deputized slave patrols and Chicago and la police departments is sufficient to explain the harm these institutions cause.
People may not understand this, but simply restating a premise without further evidence makes the assertion weaker, not stronger. If there was evidence, it would have been presented.
You were unclear about what happens next and I wanted to give you a chance to explain.
Because I don't think you meant that you would simply eliminate the police and allow murderers to roam free. Or allow private security forces, gangs, and warlords to take over.
So after you eliminate the police, how would you arrange your ideal society?
I would vastly prefer private security forces to provide defense for me than the police. History is full of examples of neighborhoods and ethnic groups organizing their own defenses to manage misbehavior from within and without those groups.
The existence of police dramatically harms the possibility of an ideal society, because they do so much violence with such immunity.
You seem to think that I believe that the status quo is somehow acceptable or tolerable.
This is like saying 'if the US military didn't initiate war against another country, how would it ensure compliance of that population with the wishes of the United States?'
Obviously the answer is to not go to war, and not concern oneself with whether or not another population is sufficiently compliant.
The full and detailed answer to your question is outlined in a book titled 'The problem of political authority: and examination on the right to coerce and the duty to obey'
You would prefer private security groups? I can't argue with your preferences, but Blackwater/Xe/Academi/Constellis roaming the streets enforcing their version of the law sounds much worse to me.
And in your ideal society, to whom could people turn for protection from the private security groups?
What about the murders that police commit? I'm calling at least some police murderers, which isn't a contestable point.
Your question also assumes the point that police are useful for dealing with murderers, which is not a point I'll cede uncontested.
Policing, because it's founded on the initiation of violence, is immoral.
Mature people can solve problems without resorting to violence. We can solve the problem of others being willing to do violence to us, more easily without a police agency, than with a police agency.
If you or I wanted the freedom to do harm to others, the best route for both of us would be to go join a local police force because they have immunity for the crimes that they commit against citizens.
Police don't have immunity for the crimes they commit against citizens. Prosecutions are rare, but not unheard of.
And the problem isn't how to solve disputes between people who can solve problems without resorting to violence. The problem is how to deal with people who can't, or don't want to.
Someone has to use violence to resist violence. If you can think of a better way to govern that group, great, but just proposing to eliminate them entirely is a child's dream.
Even the book you mentioned acknowledges that. In the chapter Individual Security in a Stateless Society, it says:
> The inhabitants of the anarchic society would most likely wish to develop systematic institutions ... [that] serve the function that police serve in governmental systems.
> Landlords in poorer areas earn “basically double” those in more affluent districts — an extra $50 per apartment per month, after expenses. The outperformance, calculated from national surveys, held even when researchers factored in faster price rises in richer areas.
“The reason is that property values, mortgages and taxes are much lower in downmarket neighbourhoods, but rents aren’t that much lower,” says Desmond.
There are caveats: the relationship is not true in a few top cities, such as New York, but does apply to places like Indianapolis and Buffalo, where “most folks live in America”. Landlords in poorer areas do experience greater variability in profits: some take large losses because their tenants default.
So the last sentence acknowledges the greater risk of renting in poorer areas. Now if you have even a basic economic understanding, you realize that higher risk investments need to offer higher returns. If renting in rich areas offered the same return as investing in poor areas with lower risk, you would have a lot fewer rentals in poor areas.
higher risk means that i need to charge more on each client to make up for the losses that i make on others. it doesn't give me higher returns on average.
if landlords earn double over a long period of time then the risk isn't as high as they claim.
You would think that you could arbitrage this problem away by increasing the landlord size (and proportionally undercutting rents).
I.e. if 10% of renters will wreck their house but rents are higher by 30% on the whole, then a large landlord should be able to shrink that gap (i.e. principle of insurance - they can eat the loss) - versus a small landlord who would want extra padding to account for the risk.
I'm extremely wary of any analysis that uses US official poverty measures over time. Highlighting just one obvious problem, this measure doesn't include non-cash benefits like housing assistance or SNAP benefits, and only takes into account pre-tax earnings. So if you're making the argument "government doesn't do enough to fight poverty", I'm not going to pay attention to you if you deliberately exclude some of the most common ways that the government uses to fight poverty.
Winner takes all mentality seems to be everywhere in the US gestalt. From tipping practices to healthcare. The headline isn't really surprising in that light...
You believe this is a pejorative term for supply-side economics and that is why you use it here. In practice, you do not understand economics and default to FUD and political harassment.
> “If the top 1 per cent of income earners just paid the taxes they owed, the country would raise an additional $175bn a year. That’s almost enough money to fill the poverty gap.” But to blame the 1 per cent alone is too easy and too “absolving”, and Desmond has a “reflex against things that absolve us”. He points to the broader chunk of the American population — perhaps the richest quarter, many of them avowed liberals — who hoover up tax credits, demand cheap goods and oppose the construction of affordable housing where they live.
> In other words, if poverty is the result of individual decisions, it is largely decisions by the rich. Desmond wants the wealthy to “take less” in exchange for a safer, fairer, less anxious society. Are they ready to listen?
In graphs across many dimensions, America is an outlier and not an exceptional one. First we have to actually want to fix it. Then we need to figure out a mechanism.
don't worry guys, the interest rate increases necessitated by elevated inflation will eliminate a tremendous amount of affluence, and we can all sit together in the mud.
This is a touchy subject and it's easy to be insensitive. There is true, desperate poverty, then there is is comparative poverty, then there is perceived poverty. Poverty can be hard to define.I could make a comment about a child who gets free lunch at school but also buys a new $1000+ phone every year. But that's an old story -- like the shiny decked out Cadillac parked in front of the shotgun shack.
There is true, desperate poverty in the U.S. I don't mean to dismiss that. But much of what people in the U.S. consider to be poverty today passed as middle-class America 40 years ago. In a sense, the difference between alleviating poverty and subsidizing affluence can often be a state of mind. When a family with a house and a car and three televisions tries to improve their situation so the single parent isn't working three jobs while the 12-year old kid fixes Ramen for the siblings, that's an effort to rise out of poverty. But that family is still a 10-percenter globally.
I'm reminded of a situation I witnessed fairly close up a while back. A family in our community lost everything when their house burned down. They weren't poor before the fire, but I don't think they or anybody else in the community considered them to be rich. Before dinnertime on the day their house burned down, each of their children had a place to sleep, clothes to get by for the next week, and a lot of hope that their circumstances were temporary. Within months, a lot of hard work from the parents, neighbors, and extended community put the family back in their rebuilt home. It probably took years to really replace everything. But today the family is well situated.
I have seen others who have received similar levels of assistance who are much less well situated. The biggest difference I can perceive is a state of mind. One story can be characterized as a case of subsidized affluence. Some others have been efforts to keep their heads above water. But the level of assistance was very similar.
I am not saying that poor people are poor because they choose to be poor. But I can't escape the thought that a poverty rescue program and a wealth management program could cost the same amount of money and target the exact same people and have different outcomes. A casserole delivered to a family in need might do less good than a neighborhood block party that feeds the same family. Granted, a block party might not be appropriate for a family recovering from a funeral. But it illustrates the different mindset.
I think we often simplify individual instances of poverty, or poverty as a whole, to either “not their fault” or “their fault” when in reality it could be any mix of the two for an individual.
Systemically, we do have policies that lead to some guaranteed level of poverty - our economic system requires that there be some optimal level of unemployment, the minimum wage basically determines the minimum standard of living for a fully employed person, and policies like how much SSI/disability pay directly impact the recipients’ standard of living. And then of course there are contributors like cyclical/generational poverty in ghettoes and certain rural areas, the war on drugs (the associated gang/criminal activity, imprisonment affecting careers, children growing up without a parent), an often poorly performing public educational system.
On an individual level you can say “well, if you made XYZ choices maybe you wouldn’t be poor” in a lot of cases, but in aggregate it’s basically guaranteed some people will experience poverty, and that is also a factor for most of those individuals. Some people will always get imprisoned or grow up in unstable households, or not have skills/opportunities for more than minimum wage jobs, or be disabled to the point of not being able to work. There will always be people without savings or who get “broken” by adversity rather than rising above it. If you give people money unconditionally I guarantee you it will always help some people stabilize and lift them up to the point of not needing it, but there will always be at least some people that just spend it all on extra consumption.
That’s what makes poverty a real challenge. Some poverty spending on individuals will be wasted, which no taxpayer wants, but in preventing that we introduce other kinds of waste like bureaucracy and welfare cliffs, and introduce low limits on how much you can receive which then limits how much poverty programs can assist people. And no matter how much we spend, there will be some people who remain “poor” in the sense of being completely reliant on the spending with nothing to fall back on.
Part of me thinks that the "mindset of poor" isn't just in the minds of some poor people. It is in the minds of the wealthier people. I know this sounds strange, but I go back to the block party thought. My neighbors know we have chickens and they've been coming over a lot lately to "borrow" an egg. I'm fine with that. Occasionally I go over and borrow a wrench or something. Neither considers the other poor. Together, we don't lack for much.
Some will call my thinking Polyannish, but it really helps to think this way. My neighbor needs a car for 30 minutes and I don't need to use mine at the moment. Here's the keys. Maybe they kick me $5 for gas and $10 for insurance and $2 for wear and tear. Or maybe they just let me borrow their lawn mower a few times. Or maybe they teach my kid how to play guitar. Maybe we don't keep score. We just know that together we got through the last flood.
If we start getting jealous of each other because she's got a bigger house or I stacked fewer sandbags, we become weaker as a whole. Of course I can't sit around and just mouch. And she can't either. And I'm not trying to justify the rich who exploit the poor. But we can do a lot at the neighbor to neighbor human level that makes life better for us all without government intervention. When it happens in poor neighborhoods we can call it poverty prevention; when it happens in rich neighborhoods we can call it an affluence subsidy. I wish we could just do it a lot more between and across all neighborhoods and call it normal.
I'm pretty right wing. The way I see it, most left wing "solutions" to poverty seem to be sticking plasters rather than actual fixes.
We should build enough normal houses in areas people want to live such that 90%+ can afford them, make owning and operating a car affordable, and make raising a family affordable.
I don't think any of this is about spending money. It's more about defining the problem. As I see it the problem is that a ton of people are in a super precarious position, renting their lives with no real stability.
I think one of the problems is we keep searching for a "miracle cure" rather than getting our hands dirty and putting in the work to fix these problems. Rather than thinking of each as a distinct issue, we should think about these as a complicated web of problems: fixing one may make another worse temporarily, but if we work on several at once, we can make a meaningful difference for a lot of people.
Let's take home values, for example. Homeowners are typically against changes that can decrease their property value because of how important home ownership is for generational wealth here. We've made the assumption that house prices will increase YoY forever, which just isn't feasible - especially considering homes will age and encounter more and more issues as they age.
Naturally, you have NIMBYs who don't want their home values to decrease – honestly, I can't blame them. I think making housing affordable for everyone (or at least _most_ of everyone) will require a significant shift about how we think about home ownership.
There's also the hidden cost of suburban developments to cities[0] which results in chronic underfunding of city services, not to mention the added cost of car ownership typically required to live in a single-family home. I drive rather little, but typically spend ~$150/mo on insurance and gas alone in a given month.
It's a hard problem that will require many people smarter than me to figure out how to get us out of this web. But I think that it can happen if we acknowledge that our cities have problems and actually invest time and money into fixing it.
> We should build enough normal houses in areas people want to live such that 90%+ can afford them, make owning and operating a car affordable, and make raising a family affordable.
That hasn’t really worked anywhere: popular places attract so many people that you literally can’t put supply into synch with demand. San Francisco is already a dense city, would it be as cheap as Manhattan if it had Manhattan like density? Maybe, but Manhattan isn’t cheap.
It might be better to focus more on better intercity and intracity transport like they do in Japan, or allow for smaller cheaper places to live like they do in Tokyo (incidentally, aggressively deprecating the value of structures like they do in Japan might help as well).
By American city standards, San Francisco is dense. Even if they have a lot of SFHs, they are counting Victorian row houses that are placed next to each other.
> You can’t say building density doesn’t work when it hasn’t even been tried in the last 30 years.
What do you mean? I lived in Beijing for 9 years, and it was plenty dense, and plenty expensive to rent for locals.
> Even if they have a lot of SFHs, they are counting Victorian row houses that are placed next to each other
Is that supposed to mean something? Most housing there doesn’t look like a The Painted Ladies anyways, and being denser amongst the most middling cohort possible isn’t an accomplishment.
> I lived in Beijing for 9 years, and it was plenty dense
What’s plenty? Why do you think it’s enough? And idk if you’ve noticed, but China has had an insane urbanization rush for the last 20+ years, so high housing costs in their cities isn’t surprising.
Row house are dense housing. No yards, they don’t take up much space on the ground. If you are comparing it to people who live in apartments sure, not as dense, but the SFHs you think exist in SF don’t really, the neighborhoods are all fairly dense given the land costs involved.
> And idk if you’ve noticed, but China has had an insane urbanization rush for the last 20+ years, so high housing costs in their cities isn’t surprising.
How is that different from “The popular place everyone wants to live should build enough housing to support that affordably”? Consider:
IDK if you’ve noticed, but a lot of people want to live in Seattle in the last 20+ years, so high housing costs in Seattle isn’t surprising.
Are you just using another standard for China, or do you mean the situation is truly different?
Indeed. The only levers government has is to subsidize demand and restrict supply, both of which have the effect of increasing prices and making life less affordable.
Glad to see this getting talked about. The real meaningful wealth gap in our society is between the HN poster income bracket and the poor, not the one between HN poster income bracket and the billionaires. But the latter seems to get all the attention. Can't imagine why.
> The real meaningful wealth gap in our society is between the HN poster income bracket and the poor, not the one between HN poster income bracket and the billionaires.
This is billionaire propaganda[1] to get the middle class to fight thier class war - it is a class war against the poor and middle class . The tax rate of the ultra-rich are at an all time low
1. https://www.youtube.com/watch?v=QPKKQnijnsM shows the gap between people (like you) think the wealth distribution is vs the reality. It was made 10 years ago and has gotten further skewed since then. Start from to 2:40 if you're in a hurry.
My salary is 240k. This is enough to afford me so much luxury as to render any complaints about people having more than me laughable. This is why the upward wealth gap from the upper middle class is not meaningful and the gap below is.
Congratulations, but what does your income level have to do with your opinion/advocacy - or lack thereof - for changing the status quo? Even billionaires like Buffet are saying things are not right on billionaire taxation, how much more laughable are their "complaints"?
I pretty sure what he is saying the the gap upwards is near meaningless. If you drive a Civic or a Ferrari, you still arrive to your destination in about the same amount of time. If you can't afford a car and have to take a bus it takes you 2-4x as long. There is utility in owning a car and almost no further utility in owning a luxury car. Same for moderate-sized house vs mansion. Southwest vs a private jet. Walmart clothes vs designer.
The US has one of the most progressive tax systems. What Buffet is pointing out that at the .1 level it plateaus out (even falls in some cases) when it should still be going up.
We may be having completely different conversations. When people like me say the billionaires ought to be taxed more, we're not complaining that "people richer than us" exist.
> If you drive a Civic or a Ferrari, you still arrive to your destination in about the same amount of time
We're on the same page on the diminishing marginal utility of wealth[1].
> If you can't afford a car and have to take a bus it takes you 2-4x as long.
Perhaps if we taxes the billionaires at the same rate we tax those earning $240k, we could afford to improve bus services so it only takes 2x as long.
1. Incidentally, I hold that to be a strong an argument for higher-than-average tax rates for the ultra wealthy - but that's an argument for another day
I don't hear them complaining, though. But I do hear people making the same money I do. I mean like non stop woe is me can't afford blah blah blah, billionaires have so much more than me upper middle class (lol at the "middle" part) whine. It's all just envy.
> This is billionaire propaganda[1] to get the middle class to fight thier class war
In my opinion, anything that tries to simplify the interests of billions of actors is a form of populist propaganda. It allows bad actors to prove that they're on the "people's side" just because they virtue signal against the "evil side" in order to advance their own interests: for example, crypto-scammers complaining about banks or Hitler complaining about rich Jewish bankers.
> The tax rate of the ultra-rich are at an all time low
Right. The problem is that the taxing the ultra-rich is difficult to do because they have the resources to avoid these taxes, and they don't actually raise that much money. So what happens is that the left always ends up raising taxes on the professional class like California. I personally wouldn't have an issue with this, if were better spent, like in the Nordic countries, but they clearly aren't in the US.
This video just shows that most Americans are bad at math. Even if literally everyone made the exact same amount of income, the wealth distribution would look closest to the last one because older people would have more time to accumulate more wealth.
> Even if literally everyone made the exact same amount of income, the wealth distribution would look closest to the last one because older people would have more time to accumulate more wealth.
There are plenty of other countries
with old people.
I disagree with what I read as your core argument, which is "It's going to happen anyway, so lets not fight it"
> There are plenty of other countries with old people.
And literally all of them have a wealth distribution that looks like that last one. Say you lived in a place where everyone saved $10k a year and worked for 50 years. Then the bottom 10% would have an average of $25k saved, and the top 10% would have $475k saved. If you add a modest 3% rate of return on investment, that brings the top 10% to ~$1 million. Visually this looks closest to the last wealth distribution. Wow much inequality! Time to eat the rich!
> "It's going to happen anyway, so lets not fight it"
This is such a disingenuous interpretation of my comment. Telling you not to volunteer to be a footsoldier of a class crusade isn't saying that we should do nothing. If you have a good argument for why should increase the capital gains tax rate, and why the fears of it disincentivizing investment are overblown, I'm all for it.
> And literally all of them have a wealth distribution that looks like that last one.
Oh, really?! In spite the "high" taxes elsewhere (read Europe)? So why not rescind the billionaire tax-cuts in the US then and beef up the threadbare social safety-nets? Seeing taxes won't impede the "job creators" from accumulating disproportionate wealth.
Yes. It allows everyone of high education to lean into the fallacy that all our problems would be solved "if we just taxed the billionaires more".
In reality, the sheer number of middle/upper middle/upper income and the tax revenue needed for a EU style social welfare would require an increase across a much broader tax base.
So tax the billionaires more too, but we aren't getting a lot more government service from that alone.
It's not just about government services. Wealth = power and speech in America and reducing that to any one, unelected person is another benefit of reducing wealth inequality.
Exactly. All social democratic welfare states, by necessity, place massive tax burdens on the middle class. e.g. Germany hits 42% marginal rate at around $60K income, and on top of that there's a 19% VAT.
Yes the average middle to upper class American underestimates how undertaxed they are for the services they claim to want.
$60k American income person pays marginal income tax of 12% or 22% depending on single or married. And sales tax probably 7%. Even if they live in a high tax state, add another 6% income tax maybe.
It's meaningless to discuss tax in isolation, you have to discuss it holistically. Saudi Arabia, for example, could have a tax rate of 0% and still provide for all of their citizens because of the oil they are sitting on.
USA has some similar advantages in resources and arable land which Europe lacks. So comparing like for like tax rates makes no sense.
Or things like conscription, for example, allows the Government the power to spend arbitrarily, since they can set whatever wage they want for the conscripted citizens, in theory (thereby controlling their own cost). This may not show up in nominal numbers (since they're reporting a cost that they themselves set) - for example, see USSR in WWII. If reported in nominal income, the cost of the war would have been 3x as large as normally reported.
I think it’s because people like offloading blame to an out group, so in this case, the middle and upper class blame the ultra-rich.
My afar observation is that most Americans that supposedly support an European-style welfare state are not ready to pay the required taxes to fund it. For some reason, they want a strong welfare state with their current tax burden, ala, hypocrisy.
Note: This does not mean the ultra-rich won’t pay high taxes too, but taxing them alone won’t fund a strong welfare state.
America subsidizes affluence through central bank interventions. When it buys trillions of dollars of assets, like MBS, bonds, and indexes, guess what, asset prices go up, benefiting asset holders — the rich.
How about a “first, do no harm” discussion about the ways government actively benefits the rich, through the Cantillon effect and regulatory capture, instead of always focusing on confiscatory redistribution.
If taxing the rich and wealth transfers worked California would have some of the lowest poverty, illiteracy, and the most affordable housing! Socialism and Communism would be the gold standard.
But the opposite seems true.
I can't remember the exact number, but here in California, the top 1% pays around 40% of the taxes.
When will we have a discussion on government waste?
I think you have the right facts, wrong (or at least unsubstantiated) conclusion.
Much of California's problems lie in regulatory capture. Housing can't be built because homeowners have experienced great wealth gain and don't want it to be touched (at the detriment of livability for all generations after -- or folks attempting to climb to socioeconomic ladder).
Then you could make a similar argument for social spending on homelessness, which at least from the Bay Area seems wasteful in that it doesn't attack root problems (drug rehab and housing).
Where is the evidence that the government is effective at managing money, as you imply?
I would agree with that last comment. Currently, social spending on homelessness IS wasteful. LA's Prop HHH is a joke, it's only led to the rise of the homelessness industrial complex. It's not the equity built but the red tape...
Many people here support a strong central government. However, I do not.
What would your alternative to government money management be? Corporations have frequently shown themselves to be bad at managing money - just look at our history of bailouts.
Not to say governments are particularly good at it either, but there's at least the opportunity for better alignment of incentives and transparency there, unlike with corporations.
Agreed, we should be doing much more of that. There are still some things that the government would still need to pay for like infrastructure improvements though.
The top 1% of earners (doctors, lawyers, dentists) usually get shafted with income taxes while the top 1% rentiers get taxed very little - especially in California (which has very low property taxes).
The rentiers usually try to rhetorically conflate the two - primarily because the 1% of earners are taxed a lot and there is an obvious societal downside to taxing (e.g. dentists) more (we need their skills) but especially because the only societal downside to taxing a rentier more is by incorrectly identifying/taxing rentier behavior.
The article specifically discussed the income EARNED by the evil landlord. Which is taxable income. The income generated by property value is taxed when sold.
In most states there are annual property taxes based on it's value. Those go to schools, roads, and whatnot.
Here in California we have statewide rent control, in LA there is a seemingly never ending eviction moratorium...
Hell, I sold my house a couple of years ago to RENT in a better area because it's cheaper and easier! Let the evil landlord deal with all of the headaches. It's a pain in the neck I don't need.
Rentiers are taking on great risk and responsibility, especially in socialist states like California. They deserve the reward. Often, rentiers that own large complexes like those discussed in the article are groups. Not single individuals. It's a stressful business. Have you personally dealt with code enforcement actions?
I admire Desmond for being upfront about the fact that his changes would cost the rich more money. I’ve always admired Bernie Sanders (though I don’t disagree with his policies) for being forthright about that as well. It irks me when folks propose wealth redistribution plans and argue that it would not redistribute wealth, and that instead more wealth would appear for the poor.
Still, I think he misses the mark a bit. He says that he “ wants the wealthy to ‘take less’ in exchange for a safer, fairer, less anxious society.” I think it’s a bad pitch. It is safer, but not for the wealthy; they mostly don’t interact with the poor, since they live in secluded upscale neighborhoods. It is fairer, except from the perspective of the people who are paying to make it more fair, while others benefit. Society is less anxious, but not the people who are financing the operation, since they have less money. It’s a net benefit to society, but I don’t believe it’s a benefit to everyone.
There’s also a substantial obstacle to ideas like these: mostly, the rich make the rules, and they are unlikely to make rules that go against their self-interest.
In my opinion, rather than finding ways to redistribute income, we should be looking for ways to predistribute income. Programs and policies like welfare and progressive taxes are, in my opinion, bandaids attempting to cover up that the game is rigged; rather than addressing that some folks are able to amass far more wealth, or earn a far higher income, they attempt to correct for the fact that it happened afterward. I think that’s backwards, and society should make policies that make it harder to have inequality in the first place.
One example would be taxing share buybacks at the same rate as dividends, since they are fundamentally the same mechanism for returning capital to shareholders, except one receives favorable tax treatment. Another example (and my guess is this is the largest) is having reasonable interest rates. Net worths of upper middle class Americans have skyrocketed over the last twenty years (and more) because of very low interest rates which have created asset bubbles in real estate and equities. This has also been a huge boon to the ultra-rich. These increased asset prices also have the effect of depressing returns for all, and raising the cost of housing for all. It also fuels the income gap between rich and poor because folks in high growth industries are able to earn disproportionately more than in low growth ones.
The way forward is to level the playing field, rather than acknowledging or complaining the playing field is not level and then attempting to correct for that after the fact.
And plenty have been so confident of their political position, that instead of trying to find if there is any truth in their opponents arguments, they instead vilify / demonize them so they don’t need to do the harder internal work of seriously challenging and perhaps refining their otherwise flawless world view.
Your most recent comment outside this thread calls DEI a "religious cult [whose] goal is power and control". Did you come to this conclusion about treating different world views with good faith between that comment and these ones?
Because common sense is subjective. Murdoch owned media is good at manipulating it. From where I'm from, there is no "left" and "right" politics in the US. One major party is more conservative and more pro-corporation than anything that would be remotely considered in my country, and the other party is the GOP, which seems like a mad joke at this point. That for some reason ~50% of the country votes for a party that wants to make so many bad things worse, is concerning for to me, but, I gave up on US politics after Hilary got nominated, the writing was so clear on the wall even back then. Any time I hear that Trump is still relevant as anything other than which prison he is at, just confirms it.
Honestly, part of the reason trump is relevant is because the left hates him. He is constantly one the news for seemingly no reason. One way to distract from a recession or bad policy is constantly reminding people of there hatred for the other side.
Also, there is absolutely manipulation on both sides. Look at news headlines about a transgender individual shooting at a Christian school that targeted the pastor. Notice if transgender or Christian is in the news title. If it was a white Christian male shooting a black school, would the identity of the shooter or school be important to put in the title.
We are a bit of a mess in the US, but it’s messy everywhere. Despite the mess, it’s honestly one of the better places to live if you don’t enrage yourself on the news cycle.
> Honestly, part of the reason trump is relevant is because the left hates him.
Isn't that a bit reductive? Americans can run their country as they chose, but, it sets a dangerous precedent to not be accountable for crimes bordering on high treason.
For my own mental health, I stopped caring. But, the bits and pieces I hear, still paints a troubling picture.
I really don’t blame them. The problem is poverty is extremely expensive to deal with. People in poverty barely have anything, and whatever the government does never seems to be enough. It’s like a black hole where money goes to die.
The rich can choose where to live, the poor can't.
If you make it hard to be rich, the rich will just go somewhere else, not abide by your rules.
The wealth redistribution narrative is as dumb as the plot of the "The Purge" franchise. If there's going to be a purge you just travel to a country without purge.
>> If you make it hard to be rich, the rich will just go somewhere else, not abide by your rules.
Yes and no. Rich people don't want to live in California simply because of their tax treatment. Rich people don't want to live in London because of the privileges given to bankers. People don't want to live in Vancouver simply because of the real estate market. Rich people want to live in these places because these places are great places in which to live. Weather, politics, safe streets, your wealthy kids not being kidnapped for ransom money, access to ambulance services, clear air/water, not having legions of poor people at your gate every morning, being able to go for a morning jog without bodyguards, not having to bribe the cops every other day ... Rich people care about things beyond lower taxes. Those things are basically the same as everyone else.
Rich people want their bank account to live in offshore tax havens. They don't want to raise children in such places. There is a reason why every Chinese billionaire has property in Vancouver, why every mega celebrity has an apartment in New York and a house in London.
The tech industry likes places geographically distant from Washington DC. They also like unregulated activities. Like software monopolies, ad-tech, crypto, gigs, the metaverse, etc. (and now, AI).
If it's too new or too abstract to be illegal, you will find a California company for it.
The race for technological advancement is not to make the world a better place, it's a race against legislation to find things that are not yet regulated and profit for them for as long as possible.
1. Enter unregulated market
2. Profit as much as possible
3. Use lobby to keep regulation away
4. Once it's so regulated that it's hard to make money from it, find another unregulated thing to do
Examples: Google's Doubleclick fiasco, Uber, Airbnb, Coinbase, etc.
Some of the tech industry, mostly on the consumer side of the market. The military and financial services tech companies still love the east coast (MIT/Boston, electric boat, NYC etc). Much of California's tech sector also grew from the aviation industry, which came to California because of weather and geography far more than culture or politics.
That's the effect of thousands of tech workers leaving. In terms of relative wealth, tech workers have more in common with restaurant and service workers than they do with billionaires: https://mkorostoff.github.io/1-pixel-wealth/
The presence or absence of a billionaire in a given jurisdiction won't be the deciding factor for those industries as evidenced by every other city without tech billionaires that has a thriving restaurant and service industry.
Do you remember when SF passed a dumb tax law and Stripe had to move their office out of town? Then all the office workers had to go too (or go remote), then the completely obvious effect described above happened?
I remember. My friends in the restaurant industry remember.
Condescension doesn't make your argument more compelling. Your "friends in the restaurant industry" would be better served by curbing income inequality rather than kowtowing to billionaires.
This description always amuses me because it leaves out all these minor details, like the fact that most rich people still need pilots and planes to “just go somewhere else,” and that pilots aren’t all rich, and planes require whole fleets of not rich people to maintain them.
This is not financial advice and I am not a financial advisor.
I've read about airline staff including pilots on poverty wages, but I would be astonished if that included anyone who flies private jets for the very wealthy.
Explain to me exactly how you imagine this going down. You've got, say, a billion dollars, not cash, and you've decided to flee from your tax obligations because you think it will be cheaper.
First example that comes to mind is 'not domiciled for tax purposes' . In the UK, our prime minister's wife benefited from declaring her tax domicile as India. She changed it to the UK when it looked like harming his political career. Either she loves him more than the money, or they have a plan to ensure this remains an economically rational choice.
This is not an argument for your position, it is an argument for the converse. England has crafted laws that allow its wealthy citizens to evade taxes while retaining their citizenship.
Not defending Mr and Mrs Sunak, which is another story, but the UK Domicile thing has been around for many years and no Govt, left or right, has ever attempted to change it.
The Brown administration (ie Labour) did change the rules so that it was no longer possible to somehow be "Not domiciled" in the UK and yet be in Parliament setting rules - including the tax rules - for the country you're supposedly not living in.
Several Tories decided that not paying taxes was better than sitting in Parliament and so they quit as a result of this.
A much more efficient way to help people is just to give them money directly, and then people can spend it on whatever they think they need.