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> as explained by President Obama’s former chief economist Lawrence Summers, “government assistance programs” provide people with “an incentive, and the means,
by mumblemumble 7y ago
> as explained by President Obama’s former chief economist Lawrence Summers, “government assistance programs” provide people with “an incentive, and the means, not to work.”
In the interest of pre-empting one obvious way to interpret that quote, this has a lot to do with the way that social welfare programs tend to be structured, and not necessarily a lot to do with laziness.
To take one concrete anecdote, many years ago a bartender at a neighborhood bar I used to frequent had to quit because she got a promotion at her day job. She didn't want to. She was actually kind of pissed off about it. The problem was, the pay raise pushed her combined income just above the cutoff point for eligibility for the state's Medicaid program, but still got her nowhere near what it would have taken to get health care on the private market. So, in order to advance her career while also retaining access to health care, she had to quit her side gig.
- thehappypm 7y agoThis type of program is why a lot of folks are suspicious of socialist policies. The bartender in this case is somewhat abusing the system. Instead of working and paying for her own health care, she is choosing to not to work in order for other taxpayers to pay for her health care.
- ksdale 7y agoIf benefits aren't graduated, then you can have a hypothetical situation where you can earn $25,000, and receive $5,000 of benefits, or earn $25,001 and receive $0 of benefits. In this hypothetical situation, every dollar you earn between $25,000 and $30,000 is extra work you have to do that doesn't net you any additional dollars. There's a whole separate discussion to be had about what taxes should pay for, but I don't think it's abusing the system. I think there's no question the bartender would work full time at a job that paid enough to pay for all of the living expenses and the healthcare, but that's not one of her options. Her options, according to the anecdote, were to work X hours for X money, or to work X + Y hours for X money.
- qntty 7y agoWell designed programs don't have the feature that making more money means you get less.
- pitaj 7y agoThese programs have been designed this way for many decades. Given that track record, why would anyone trust politicians to implement single-payer healthcare or other "socialist" policies?
- Jare 7y agoYeah this is outrageous! I only trust them to design "capitalist" tax policies for large companies and billionaires.
- Joeri 7y agoWell, distrust in the political system has been that way in the U.S. for decades. Single payer systems have been implemented auccesfully in many countries, all it would take is to copy from any one of those countries wholesale. For example, with the current money going into medicare and medicaid it would be possible to fund a universal healthcare system that was a copy of canada’s. They’re nice people, I’m sure they’d be willing to help set it up.
- Excel_Wizard 7y ago"Subsidy Cliffs" are a real problem. I implore everyone to help get rid of the insane situations they create. Plug in some numbers for yourself with this Obamacare calculator. If you are, for example, a married couple, both 55 years old, you lose many of thousands of dollars of benefits from an additional $1 of income when your income crosses 400% of the poverty line. To put some real numbers on the table: if this couple made $65800 of income, they get a $1098 per month subsidy. If they made $65900 of income, they get a $0 subsidy. https://www.kff.org/interactive/subsidy-calculator/ https://www.kff.org/interactive/subsidy-calculator/
- HarryHirsch 7y agoThe trouble with well-designed programs is that they just work, they don't allow politicians to grandstand. The fact that politicians can and will use "welfare-grifting barmaids" to score points is designed into the program, proof is that they passed the democratic process!
- dsfyu404ed 7y agoOne man's "abusing the system" is another mans "responding to incentives in the way that makes the most sense but happens to not create a flattering depiction of the system."
- thehappypm 7y agoI agree with this completely. Welfare is not supposed to create incentives for people to earn less money, it's supposed to help the legitimately poor. But those incentives certainly exist, and happen commonly enough that many people are distrustful of the welfare system as a whole.
- EpicEng 7y ago>Instead of working and paying for her own health care There was no choice. She couldn't afford to pay for healthcare with the new job. What would you have done?
- thehappypm 7y agoI probably would have made the same choice.
- cameronbrown 7y agoCan you really blame her when the result of the system is being given these choices: 1) Don't take the pay rise (career stagnation) 2) Keep health care and advance her career (abusing the system, technically, yes) 3) Keep both jobs and advance her career (lose health care) You don't need to be an expert on game theory to realise what the best decision to make in this situation is. I agree with you in principle that it shouldn't be right to do this, but the system is, well.. shit. What else could she have done?
- thehappypm 7y agoI don't blame her and probably would have made the same choice.
- duxup 7y ago>The bartender in this case is somewhat abusing the system. She's choosing to get healthcare, a reasonable choice, 100% legally. The other poster made it clear she could not afford the jump from medicare to the open market. If you're worried about the policies I suggest you take a closer look as to who wants to limit how those systems work... time and again it's NOT people pushing "socialist policies".
- thehappypm 7y agoIt is legal, for sure. I said "somewhat abusing" because she is choosing to suppress her income in order to qualify for benefits. Nothing illegal about that, but perhaps it's a bit unethical to make less money on purpose to qualify for government aid?
- steverb 7y agoI think the issue is that there seems to be some sort of health coverage cliff, where if you make too much money you aren't covered by government programs, but you still might not be making enough to pay for health coverage yourself. 15 years ago, we just did without health coverage, but we were young and healthy. Not everyone is as blessed.
- trey-jones 7y agoIsn't the system broken if getting a raise is actually the opposite? I'm in the same situation in Georgia: We actually have a pretty great program through Medicaid that provides free health insurance for kids 6 and under and a very low rate for kids older than that. All 3 of my kids are on it. My salary is just under the limit for a household of 5. I would love to make more money, but it would have to be a raise of about 20% to cover the difference in premium for my kids to be on my private insurance plan. I'm thankful for the program. Without it, I was forking over 20% of my salary to the health insurance company. It seems stupid to allow myself to fall in that margin, no?
- thehappypm 7y agoIt's clearly a flawed system when a person is incentivized to be a tax burden on other taxpayers instead of making more income.
- reagank 7y agoIt’s a flawed system when human individuals are treated like “tax burdens”
- mumblemumble 7y agoIt seems like exactly the kind of system you get when people are more worried about who to blame for X than they are about how to make X better.
- trey-jones 7y agoHmm, but I also pay Georgia income tax. Indeed there are a lot of government programs funded by income tax that I do not take advantage of. I'm not sure if you're trying to make me feel like a tax burden or not, but... I don't feel bad.
- pitaj 7y agoDon't forget public housing programs that concentrate poverty and crime ("The Projects"). It's as if assistance programs were designed to maintain a permanent underclass of dependents.
- alfromspace 7y agoOn the other hand, nobody wants public housing projects being set up in their nice neighborhoods...often for good reason. The once-safe neighborhood where I grew up once had a grocery store - the lot was bought out by neighborhood housing, a low-income development was planned, locals complained, locals were called racists and NIMBYs, development was built anyway - and now there's no grocery store, no parking, shootings and burglaries are regular occurrences, and kids don't play outside. The problem isn't solved by spreading poverty and dysfunction around rather than concentrating it - it just makes it everyone's (read: your) problem.
- phil248 7y agoTo be fair, many states stopped building this kind of housing in the 90's. For a few decades now, any affordable housing built in NY or CA or dozens of other states is almost always mixed-income.
- JAlexoid 7y agoIt doesn't help. The 80/20 rule for affordable housing in NY(or is it NYC) has screwed up the market... Middle class gets to pay for it, while some places are now getting "poor entrances".
- phil248 7y agoThat's one stupendously negative way to look at it. Obviously it varies project to project. In California, where I've worked up close with many old and new projects, the new ones are almost always far better off than the old-school projects in terms of safety, cleanliness, community activity, etc. And they provide a lot of market-rate and middle-income housing in addition to low-income and senior housing.
- alfromspace 7y agoSimilar thing happened to a good friend of mine. I don't recall the exact numbers, but she got a raise from something like $11.50 to $13/hr. Suddenly no longer qualified for the pretty nice state Medicaid plan, and had to pick up some godawful high deductible, high premium plan that covers virtually nothing from the Obamacare marketplace. She pays at least $150/month for it in premiums, is nowhere near the deductible, and so far it's refused to cover an MRI two doctors have ordered for her. Plus she lost dental and vision coverage - just had to pay $300 out of pocket for a cleaning and x-rays. Something's very wrong when making more money makes you poorer and less healthy.
- dragonwriter 7y ago> Something's very wrong when making more money makes you poorer and less healthy. Yes, what's wrong is cut-off thresholds (or just phaseouts that, when totalled across programs, exceed $1 lost benefits for each $1 of additional income.) It's one of the things motivating UBI, since then all the phaseout happens in one place, by way of progressive marginal tax rates.
- sieabahlpark 7y agoWhy not tackle the origin of the issue instead of subsidizing it? That just gives more money to the people who are now able to charge more. It's the same argument to raise minimum wage that'll apply to increasing UBI. I don't see it being the correct avenue to have long-standing progress.
- dragonwriter 7y ago> Why not tackle the origin of the issue instead of subsidizing it? UBI is addressing the root of the issue I pointed to, with healthcare specifically, though, for the same avoiding thresholding reason that UBI serves for aid generally, public baseline healthcare should be universal and not income qualified.
- deleted 7y ago[deleted]