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That sounds like asking for trouble. Like payday loans - starts as a good idea that can help people, ends up as a system with the effect of luring people into m
by RangerScience 10y ago
That sounds like asking for trouble. Like payday loans - starts as a good idea that can help people, ends up as a system with the effect of luring people into massive dept.
- ncallaway 10y agoSure. The problem with a PayDay loan is that it replaces future capital with capital today. For the small percent of people who have serial problems managing their capital, giving them capital is the worst thing you can do. This causes people to get trapped in a cycle. The key difference here is you replace future-capital with the goods or services directly. It's much harder to turn food and/or rent back into capital, and then mismanage it.
- RangerScience 10y agoI see what you're saying, although... Based on that explanation, I'd expect to see a much more diminished frequency / intensity of the PayDay loan issue, but... ...if Something Happens and you run out of cash this month, why would you expect to a) not have Something Happen next month or b) have enough surplus next month to repay the "loan"? Well, I guess you'd want to peg the BI at "average cost of living plus buffer", so that the person always has enough liquidity to cover, say, a standard deviation of Oh Shit over the course of N months. Or, keep safety nets as nets (rather than traps) so that Oh Shit, Something Happened events don't cause this issue. Hmmm.