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Blindly investing money into “the poor” is a foolish endeavor that yields little strength to a country. Herd immunity and preventative health is a quantifiable

Blindly investing money into “the poor” is a foolish endeavor that yields little strength to a country. Herd immunity and preventative health is a quantifiable thing and so I support universal healthcare. But we have to stop this disasterous assumption that the only reason people are poor is their circumstances. The best way to help poor people is to lower the minimum wage so they can get jobs. Subsidizing the poor increases consumption which is bad not only for the first order effect (throwing away money)... but also for the little thought of second order effect: it incentivizes people to build businesses that cater to consumption that was in the first place unsustainable. Smart people that could have been doing something else instead facilitate the creation of businesses that are only funded by inflation and cheap credit. This is the story of the US economy in the past 30 years. The two largest disasters in recent history: the student loan bubble and the housing bubble, were both founded upon the notion that we should “give money away” without any real measurement of whether or not there would be a return on capital. Our government should invest the majority of capital in basic research, healthcare, education and infrastructure... not the creation of a consumption driven bloated welfare state.

coldcode 7y ago
We should force the poor into indentured servitude or slavery as a proper solution, as the South was better off when workers were all unpaid and uncared for. Giving everyone's tax money to wealthy people will result in a better world for everyone. /s Libertarian fantasy must be a pretty dull medium. Always the same story.
- voldacar 7y ago
  This wasnt a very substantive comment... People go to HN to avoid discourse like this :(
SubiculumCode 7y ago
A serious and frequently permanent loss of productivity occurs when people live on a financial cliff where minor unfortunes can propel even smart individuals into unemployment and homelssness, and their children into poorer education outcomes, while minor investments and more equitible distributions of wealth in a society create robust sustainable growth. In the case of student loans, they should have come with restrictions on increases in admin costs at the college as tuition has inordinately increased. In terms of the housing crisis, do not discount the role of predatory lending by institutions that used to engender trust. I find your position to ignore context and subtelty, and to propogate myths about poverty and the impoverished as primarily being the result of a meritocracy.
throwaway34241 7y ago
> The best way to help poor people is to lower the minimum wage so they can get jobs. Raising the minimum wage can have a negative effect on jobs, but unless it's hard to find minimum wage jobs right now, I don't see what lowering the minimum wage will achieve. Also there's labor force participation to consider - if unskilled jobs are too low paying, some people at the margins will choose not to participate (for example, by living with their parents). > Subsidizing the poor increases consumption which is bad not only for the first order effect (throwing away money)... but also for the little thought of second order effect: it incentivizes people to build businesses that cater to consumption that was in the first place unsustainable. > Our government should invest the majority of capital in basic research, healthcare, education and infrastructure Consumption funded by debt may be bad, but I wouldn't suggest that consumption (in other words, having a consumer-driven economy) is throwing away money. Many goods that people spend their own money on (consumer electronics, cars, clothing, etc) have competitive markets with reasonable prices and/or steady improvements. On the contrary to throwing away money, it seems pretty efficient at delivering utility. Especially when compared to recent trends in healthcare, education, and infrastructure. I agree with some of the other comments that productivity determines the long-run living standards of a country, and that consumption is not investment and it may be a bad idea to finance it with debt. But I don't think the answer is to reduce people's ability to consume goods & services, but rather to enable doing it in a sustainable way.
- stanfordkid 7y ago
  The decreases in price for these consumer goods you mention came largely as a result of globalization and offshoring of production. Our economy went upmarket towards services which were largely meant to facilitate this consumption (eg advertising and mass media). The American public became lazy, conditioned to consume and entitled. The modern American consumer is only in debt because debt is so easy to obtain, not because his wages are too low to survive. Visit Latin America or Asia where there throngs of people much happier and healthier on far less. The welfare state makes the familial structure unnecessary in America — I won’t comment on this. But it is a third order effect even more deeply troubling than the economic ones I highlighted earlier.

coldcode 7y ago

We should force the poor into indentured servitude or slavery as a proper solution, as the South was better off when workers were all unpaid and uncared for. Giving everyone's tax money to wealthy people will result in a better world for everyone. /s Libertarian fantasy must be a pretty dull medium. Always the same story.

voldacar 7y ago
This wasnt a very substantive comment... People go to HN to avoid discourse like this :(

SubiculumCode 7y ago

A serious and frequently permanent loss of productivity occurs when people live on a financial cliff where minor unfortunes can propel even smart individuals into unemployment and homelssness, and their children into poorer education outcomes, while minor investments and more equitible distributions of wealth in a society create robust sustainable growth. In the case of student loans, they should have come with restrictions on increases in admin costs at the college as tuition has inordinately increased. In terms of the housing crisis, do not discount the role of predatory lending by institutions that used to engender trust. I find your position to ignore context and subtelty, and to propogate myths about poverty and the impoverished as primarily being the result of a meritocracy.

throwaway34241 7y ago

> The best way to help poor people is to lower the minimum wage so they can get jobs. Raising the minimum wage can have a negative effect on jobs, but unless it's hard to find minimum wage jobs right now, I don't see what lowering the minimum wage will achieve. Also there's labor force participation to consider - if unskilled jobs are too low paying, some people at the margins will choose not to participate (for example, by living with their parents). > Subsidizing the poor increases consumption which is bad not only for the first order effect (throwing away money)... but also for the little thought of second order effect: it incentivizes people to build businesses that cater to consumption that was in the first place unsustainable. > Our government should invest the majority of capital in basic research, healthcare, education and infrastructure Consumption funded by debt may be bad, but I wouldn't suggest that consumption (in other words, having a consumer-driven economy) is throwing away money. Many goods that people spend their own money on (consumer electronics, cars, clothing, etc) have competitive markets with reasonable prices and/or steady improvements. On the contrary to throwing away money, it seems pretty efficient at delivering utility. Especially when compared to recent trends in healthcare, education, and infrastructure. I agree with some of the other comments that productivity determines the long-run living standards of a country, and that consumption is not investment and it may be a bad idea to finance it with debt. But I don't think the answer is to reduce people's ability to consume goods & services, but rather to enable doing it in a sustainable way.

stanfordkid 7y ago
The decreases in price for these consumer goods you mention came largely as a result of globalization and offshoring of production. Our economy went upmarket towards services which were largely meant to facilitate this consumption (eg advertising and mass media). The American public became lazy, conditioned to consume and entitled. The modern American consumer is only in debt because debt is so easy to obtain, not because his wages are too low to survive. Visit Latin America or Asia where there throngs of people much happier and healthier on far less. The welfare state makes the familial structure unnecessary in America — I won’t comment on this. But it is a third order effect even more deeply troubling than the economic ones I highlighted earlier.