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Most economists probably would be surprised if it could actually work in general. Cash handouts do not cause the behavioral changes necessary for individuals to
by lawnchair_larry 6y ago
Most economists probably would be surprised if it could actually work in general. Cash handouts do not cause the behavioral changes necessary for individuals to develop sustainable habits. Most poor people are not poor because they don’t have access to the market, but because they either don’t know what to do, or they don’t have the discipline to do what they know they should. Cash handouts can make this even worse as people become complacent and dependent on them, and the impetus to work out a sustainable solution dissolves. The implementation of welfare programs in the US during the 60s has a strong negative correlation with progress in lower income (and often minority) communities.
An ideal solution might involve temporary relief for catastrophic events that can help an otherwise mostly sustainable lifestyle, but avoid misaligning incentives in a way that makes the problem even worse.
- antisthenes 6y ago> Cash handouts do not cause the behavioral changes necessary for individuals to develop sustainable habits. That's because cash handouts given are usually not even close to being enough to develop sustainable habits. #1 help in developing a sustainable habit is receiving an education that allows an individual to pursue a better job. Education is very expensive in the US. It is doubly expensive if the adult in question has to take care of dependents. AFAIK, there's not a single program that would come close to let an adult improve their education, while also helping them take care of kids.
- stainforth 6y agoPossibly true, but I'd like to see this thinking applied to the welfare and misaligned incentives we grant big business FIRST before we apply it to the already disenfranchised.
- lawnchair_larry 6y agoThere are no poor businesses that get free cash handouts on a recurring monthly basis.