7 ms·

I'm a little ambivalent on the entire concept of UBI, specifically in regards using it instead of other social safety nets (e.g. food stamps). I believe this s

I'm a little ambivalent on the entire concept of UBI, specifically in regards using it instead of other social safety nets (e.g. food stamps). I believe this study, and I believe that a vast majority of poor people would spend the money reasonably, but I do think there is a small subset of poor people who will be "perpetually poor." They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and I think giving them raw cash instead of something more or less boxed-in like food stamps can lead to a lot of issues. I think a lot of people see the majority of poor people acting extremely responsibly and just assume that irresponsible people don't exist. The problem is that they do, even if they are a minority, and we do need to help them too. I am much more open to a UBI if we have it in addition to our current welfare programs, a lot of people would definitely benefit from having a guaranteed safety net, but I think we shouldn't forget that "the majority" doesn't mean "everyone". ---- EDIT: It appears that I didn't explain myself very well. I'm not trying to give a Reagan-esque welfare-queen thing, specifically because I actually would prefer we increase welfare/safety-net spending instead of reducing it. I'm not trying to shift a burden of blame on anyone, I'm sure there are socioeconomic reasons to why some people lack financial literacy. I guess what I'm trying to say (and this may come off as hyperbolic) is that I get a little bit of a social-darwinism vibe when people act like people mismanaging money don't need to be addressed in topics of UBI. Obviously not everyone says this, but there is at least a subset of people who pretend that nearly everyone, given enough money, is this hyper-rational actor who always spends their money efficiently and that we shouldn't worry about the 1% of people who aren't. Even if it is just 1%, these are still humans, these are still people we should take care of, and these are people that depend on the current level of social safety nets.

Waterluvian 5y ago
I think people spend WAY too much effort worrying about the "small subset of people" who misuse a social system. To the point that their fixation on this small subset causes more waste than just being okay with the fact that some people will misuse a system. When Covid began, the Ontario Government just handed out cash. You could go to a website and 5 minutes later be set up for a $400 direct deposit into your bank account. You didn't need to prove anything. You just gave them your bank information and personal information and how many kids you have. People got anxious about the hypothetical kind of person who could abuse this. The response was basically: if we try to carefully scrutinize every person, it's going to cost us more, and we're not going to get the money out fast enough. This is for parents who suddenly have to buy Chromebooks and other school supplies for their kids. If you ask me, I think it all stems from a deep feeling all humans have, but that some cultures greatly amplify: the anxiety that someone isn't rowing while you are.
- awillen 5y ago
  There's so much of this thinking that misses the forest for the trees. When you're running a giant government program, fraud and misuse are to be expected. The question "will there be fraud?" is rarely the right one - rather it's "factoring in the cost of fraud, is this still a good program?" There was a fair bit of PPP fraud, but that's okay! It was designed to be relatively easy for businesses to get that money, because getting money into the hands of small businesses was critical. Plenty of the fraud could have been prevented with additional paperwork/validations/etc., but amount saved from fraud by doing that would be completely outweighed by the cost of businesses failing that otherwise could have been saved because they couldn't get the money fast enough.
  - t-writescode 5y ago
    Especially in the United States, we’re so focused on catching fraud, we probably spend more money on the bureaucracy to stop the fraud than the cost the fraud would have, itself.
    - awillen 5y ago
      Yeah, it's this bizarrely shortsighted focus on making it an absolute priority that nobody takes advantage of us as compared to just prioritizing our own well being. We're not even good at being selfish :/
    - dlp211 5y ago
      Worst, we spend so much time trying to prevent fraud, the programs don't reach their full potential to benefit the most amount of people that need it and are qualified to receive it.
  - epicureanideal 5y ago
    Accepting fraud encourages fraud and demoralizes people who are playing by the rules just to watch fraudsters pass them by in life.
    - 5y ago
wikibob 5y ago
I see a lot of I think statements in your post, and no empirical data. What specific issues are you suggesting result from giving cash over food stamps? Are you familiar with the absolutely byzantine rules imposed by many states on food stamp recipients on what they can purchase? It was recently discussed in an article here I believe. It goes down to specifying which specific types of cheddar cheese are permissible. Just removing the mental burden of that alone would be an improvement.
- tombert 5y ago
  > I see a lot of I think statements in your post, and no empirical data. That's totally fair; this is observational anecdata. Something a bit more objective would be to look at lottery winners [1], a case where someone gets literally millions of dollars injected into their bank account. Despite this a majority of lottery winners end up broke relatively quickly. Of course, this is going to be a selection bias; typically financially responsible people are not playing the lottery since it's generally regarded as a bad financial investment, but the fact that the lottery exists proves that there's a large enough audience to justify its existence. > What specific issues are you suggesting result from giving cash over food stamps? I think there's a risk of an increase in the aforementioned lottery tickets, > Are you familiar with the absolutely byzantine rules imposed by many states on food stamp recipients on what they can purchase? > It was recently discussed in an article here I believe. It goes down to specifying which specific types of cheddar cheese are permissible. Yep! I actually looked into the process of applying for them when I was really broke in 2016 [2], and you will get zero arguments from me that it's a draconian system that needs revision. There are a bunch of arbitrary rules about how they can be redeemed and I am somewhat against those, but that doesn't mean that we get rid of food stamps entirely. [1] https://www.lovemoney.com/gallerylist/64958/lottery-winners-who-blew-the-lot https://www.lovemoney.com/gallerylist/64958/lottery-winners-... [2] I actually didn't end up getting them due to an extreme bit of good luck finding a job just in time.
bluedino 5y ago
I doubt that it's a 'small subset' seeing that 54% of Americans, across all income levels, live paycheck to paycheck.
spamizbad 5y ago
> but I do think there is a small subset of poor people who will be "perpetually poor." They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and I think giving them raw cash instead of something more or less boxed-in like food stamps can lead to a lot of issues. I think this phenomena cuts across class lines. There are lots of middle class households that live way beyond their means and basically just use expansive lines of credit - of which poor people don't have access to - to keep themselves afloat. Likewise, there's tons of "Richs to rags" stories of wealthy people who slowly fritter away their wealth with either foolish investing or extravagant purchases.
SavantIdiot 5y ago
> t I do think there is a small subset of poor people who will be "perpetually poor." They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and I think giving them raw cash instead of something more or less boxed-in like food stamps can lead to a lot of issues. So what? You realize the top 1% have stolen >$10T from us overdecades of tax evasion, and you want to punish a few mentally ill people who don't spend money in the "right way" that you've personally determined to gatekeep? This is the problem I have when people say: "the problem I have with UBI is that people won't spend it the way I think they should." It is such a small amount compared to the larger problems, and it would help so many people. Engineers have a term for this: rounding error. You're worried about rounding error.
- tombert 5y ago
  > So what? You realize the top 1% have stolen >$10T from us overdecades of tax evasion, and you want to punish a few mentally ill people who don't spend money in the "right way" that you've personally determined to gatekeep? That's actually not what I said at all, did you finish reading my post? I made it clear that I want continued welfare programs, I just don't want UBI to replace them. I would be much happier if UBI were added.
  - SavantIdiot 5y ago
    Your exact words: "They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and ... can lead to a lot of issues." What issues?
    - tombert 5y ago
      I was typing out a bunch of potential issues but I realized after a few sentences that I would actually like to know what you actually disagree with me on this? If we had a UBI in addition to all the current levels welfare/safety-nets, is this something you actually disagree with? Why?
      - 5y ago
onetimeusename 5y ago
I think that was confirmed in the Ontario UBI study. There was a small but significant minority of people whose lives worsened on UBI. Although a majority reported being better off a significant percentage of people were the same or worse. The study also showed that it basically did not change people's employment status or job training. That was a benefit touted for UBI. If people had income coming in that didn't depend on working they would seek job training and improve their careers. However, that did not appear to be the case generally. It took a lot of effort to find this. It was buried beneath news spam in search results where things were cherry picked out of it. Study is here: https://labourstudies.mcmaster.ca/documents/southern-ontarios-basic-income-experience.pdf https://labourstudies.mcmaster.ca/documents/southern-ontario...
- pseudalopex 5y ago
  Ontario's basic program was a minimum income guarantee. Not UBI. Earned income reduced benefits. And within 10 months a party opposed to the program took over and announced an early end. What do you think confirmed frivolous spending? What ruled out chronic health issues or other factors? Your source said 26.2% started education or training. Where did you see this basically did not change? 71.8% who didn't work during the program cited health issues.
NtochkaNzvanova 5y ago
I think it's pretty unlikely UBI will ever replace other welfare programs. At least in the US, the Rs and Ds are currently locked in a battle to drastically increase welfare. Even though the Ds nominally control congress, they aren't able to just ram it through. While I can see things moving further toward the D / increase welfare side in the future I can't see the Rs ever getting a strong enough majority that they would be able to eliminate other welfare programs in favor of UBI. (Which would be consistent with their platform, in the sense that a true UBI -- send $N per month to literally everyone -- would be able to eliminate a huge amount of government bureaucracy that is currently dedicated to administering all these programs.) In practice, none of the "UBI trials" I've heard about are anything close to UBI, even for a small community. In fact, UBI seems to be getting rebranded as "guaranteed basic income" (GBI), meaning not universal, but "guaranteed for the people we feel like giving it to". All these trials I have heard of still have an income means test, and some are even limited to particular racial groups.
RC_ITR 5y ago
Why is it society's job to prevent poor people from vices, whereas rich people generally get to do whatever they want? No one talks about CEO pay increases in terms of 'if we give them more money, they'll just spend it on drugs, emitting carbon, and other nefarious things'
- rory 5y ago
  The point is not protecting anyone from vices, the point is making sure basic needs are met. When CEOs spend their money in frivolous ways, they generally have enough to not need to fall back on additional public assistance. If UBI were instituted in place of other benefits programs, some poor people would spend the money unwisely (or unluckily) and still be short on food, housing, etc. when the money ran out. Of course this already happens in our current system, but theoretically it could happen more without some degree of government control of where money goes (like how section 8, SNAP, etc. work now).
  - RC_ITR 5y ago
    >When CEOs spend their money in frivolous ways, they generally have enough to not need to fall back on additional public assistance The wealthy receive the lion's share of the wealth created by public subsidies, whihc they then spend as they please. 1. Marillyn Hewson was paid $30mn as a retirement package last year, and 75%+ of her company's revenue comes from the US government. 2. Hugh Grant of Monsanto was paid $20mn and a significant share of his company's revenue is driven by the US's $20bn farm subsidy. 3. Peter Thiel has saved c.$1bn in taxes by using the Roth IRA structure. I'm not trying to judge the morality of the above, but to act as though the wealthy don't receive government support tht they spend exactly as they please is a short-sighted position.
    - rory 5y ago
      I'm not sure if you are mistakenly replying in the wrong place, but that doesn't seem related to the basic-needs argument I (and, in a slightly different way, the thread OP) are making.
deleted 5y ago
[deleted]
cmrdporcupine 5y ago
Both welfare and UBI skirt the fundamental underlying issues of access to capital, voice/control in the workplace, equality of opportunity, concentration of wealth, concentration of power, etc. All of that would just still go on, but people would just probably-not starve. In fact I wonder if UBI were implemented if many of these things could worsen as political pressure from the working classes in the form of unions and political parties and the like would weaken. If you're able to feed yourself via UBI, why vote for a "left wing" party, or go on strike, or go to a demonstration etc in order to push for more workplace rights, etc.? Hence why I think actually there's plenty of support for UBI from people who would not normally be advocates of extensive social programs. Many old school Marxists saw welfare programmes as nothing more than an "escape valve" for the excesses of capitalism. Good as a "transitional demand" but harmful in the long run.
michaelmrose 5y ago
This is a complete misunderstanding about what it is to be poor. Poor people including "perpetually poor" aka most poor people are poor because they are lacking not in financial literacy but rather the necessary skills to make sufficient money to graduate from being poor. It's not that they fritter their money away its that they don't have any. They do jobs that pay them barely enough to afford their shitty lives and invest between commuting and working 50-65 hours doing so in between being parents and spouses and doing not only all the things you do save take time off but doing the paperwork, phone calls, meetings, and leg work to convince people that they are in fact still poor and still need benefits. If were to sit down and spend time optimizing these people's financial lives you would find that the amount "frittered" away is so tiny compared to child care, food, rent, medical costs that it wouldn't make a difference. Taking someone that for example makes and spends 20,800 and helping them not "fritter" away the 800 will not provide them with a means to climb out of poverty. There never was in that scenario enough resources no matter how they are budgeted. The most canonical example of this absurdity used to be complaining about poor people buying TVs with tax return checks as if someone who is $40,000 below a middle class household income would SOMEHOW be doing OK if they hadn't spent that $500. My other favorite example is people complaining about poor people pulling out an EBT card and a smartphone wherein the EBT card signifies that the government has decided that your income is $5000 short of what is required to eat and live and the phone costs $200 once + $20 a month while providing vital utility. Ultimately the benefits you describe as being targeted are pretty much targeted at keeping people from climbing out of poverty. Look at health insurance you can get medicine and care for nothing up until about $2000 a month income and then you have to buy your own insurance. Subsidies are great but they apply only if your employer doesn't offer an "affordable" plan the definition of affordable being if I recall correctly about 12% of your gross salary for the individual plan. There being tax benefits this inspires your employer to offer an "affordable plan" for individuals while jacking up the cost of covering your family. For example with my employers plan the employee + spouse costs 4x as much. Ultimately moving up from substantial poverty to ordinary poor is actually a net loss. You could if you don't ever want to move up or believe you will be able to be better off staying a little poorer working part time and collecting benefits. Think about that! Would you like to work 60 hours to be as well off as you were working 24? How do you think people respond to that sort of incentive structure?

Waterluvian 5y ago

I think people spend WAY too much effort worrying about the "small subset of people" who misuse a social system. To the point that their fixation on this small subset causes more waste than just being okay with the fact that some people will misuse a system. When Covid began, the Ontario Government just handed out cash. You could go to a website and 5 minutes later be set up for a $400 direct deposit into your bank account. You didn't need to prove anything. You just gave them your bank information and personal information and how many kids you have. People got anxious about the hypothetical kind of person who could abuse this. The response was basically: if we try to carefully scrutinize every person, it's going to cost us more, and we're not going to get the money out fast enough. This is for parents who suddenly have to buy Chromebooks and other school supplies for their kids. If you ask me, I think it all stems from a deep feeling all humans have, but that some cultures greatly amplify: the anxiety that someone isn't rowing while you are.

awillen 5y ago
There's so much of this thinking that misses the forest for the trees. When you're running a giant government program, fraud and misuse are to be expected. The question "will there be fraud?" is rarely the right one - rather it's "factoring in the cost of fraud, is this still a good program?" There was a fair bit of PPP fraud, but that's okay! It was designed to be relatively easy for businesses to get that money, because getting money into the hands of small businesses was critical. Plenty of the fraud could have been prevented with additional paperwork/validations/etc., but amount saved from fraud by doing that would be completely outweighed by the cost of businesses failing that otherwise could have been saved because they couldn't get the money fast enough.
- t-writescode 5y ago
  Especially in the United States, we’re so focused on catching fraud, we probably spend more money on the bureaucracy to stop the fraud than the cost the fraud would have, itself.
  - awillen 5y ago
    Yeah, it's this bizarrely shortsighted focus on making it an absolute priority that nobody takes advantage of us as compared to just prioritizing our own well being. We're not even good at being selfish :/
  - dlp211 5y ago
    Worst, we spend so much time trying to prevent fraud, the programs don't reach their full potential to benefit the most amount of people that need it and are qualified to receive it.
- epicureanideal 5y ago
  Accepting fraud encourages fraud and demoralizes people who are playing by the rules just to watch fraudsters pass them by in life.
  - 5y ago

wikibob 5y ago

I see a lot of I think statements in your post, and no empirical data. What specific issues are you suggesting result from giving cash over food stamps? Are you familiar with the absolutely byzantine rules imposed by many states on food stamp recipients on what they can purchase? It was recently discussed in an article here I believe. It goes down to specifying which specific types of cheddar cheese are permissible. Just removing the mental burden of that alone would be an improvement.

tombert 5y ago
> I see a lot of I think statements in your post, and no empirical data. That's totally fair; this is observational anecdata. Something a bit more objective would be to look at lottery winners [1], a case where someone gets literally millions of dollars injected into their bank account. Despite this a majority of lottery winners end up broke relatively quickly. Of course, this is going to be a selection bias; typically financially responsible people are not playing the lottery since it's generally regarded as a bad financial investment, but the fact that the lottery exists proves that there's a large enough audience to justify its existence. > What specific issues are you suggesting result from giving cash over food stamps? I think there's a risk of an increase in the aforementioned lottery tickets, > Are you familiar with the absolutely byzantine rules imposed by many states on food stamp recipients on what they can purchase? > It was recently discussed in an article here I believe. It goes down to specifying which specific types of cheddar cheese are permissible. Yep! I actually looked into the process of applying for them when I was really broke in 2016 [2], and you will get zero arguments from me that it's a draconian system that needs revision. There are a bunch of arbitrary rules about how they can be redeemed and I am somewhat against those, but that doesn't mean that we get rid of food stamps entirely. [1] https://www.lovemoney.com/gallerylist/64958/lottery-winners-who-blew-the-lot https://www.lovemoney.com/gallerylist/64958/lottery-winners-... [2] I actually didn't end up getting them due to an extreme bit of good luck finding a job just in time.

bluedino 5y ago

I doubt that it's a 'small subset' seeing that 54% of Americans, across all income levels, live paycheck to paycheck.

spamizbad 5y ago

> but I do think there is a small subset of poor people who will be "perpetually poor." They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and I think giving them raw cash instead of something more or less boxed-in like food stamps can lead to a lot of issues. I think this phenomena cuts across class lines. There are lots of middle class households that live way beyond their means and basically just use expansive lines of credit - of which poor people don't have access to - to keep themselves afloat. Likewise, there's tons of "Richs to rags" stories of wealthy people who slowly fritter away their wealth with either foolish investing or extravagant purchases.

SavantIdiot 5y ago

> t I do think there is a small subset of poor people who will be "perpetually poor." They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and I think giving them raw cash instead of something more or less boxed-in like food stamps can lead to a lot of issues. So what? You realize the top 1% have stolen >$10T from us overdecades of tax evasion, and you want to punish a few mentally ill people who don't spend money in the "right way" that you've personally determined to gatekeep? This is the problem I have when people say: "the problem I have with UBI is that people won't spend it the way I think they should." It is such a small amount compared to the larger problems, and it would help so many people. Engineers have a term for this: rounding error. You're worried about rounding error.

tombert 5y ago
> So what? You realize the top 1% have stolen >$10T from us overdecades of tax evasion, and you want to punish a few mentally ill people who don't spend money in the "right way" that you've personally determined to gatekeep? That's actually not what I said at all, did you finish reading my post? I made it clear that I want continued welfare programs, I just don't want UBI to replace them. I would be much happier if UBI were added.
- SavantIdiot 5y ago
  Your exact words: "They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and ... can lead to a lot of issues." What issues?
  - tombert 5y ago
    I was typing out a bunch of potential issues but I realized after a few sentences that I would actually like to know what you actually disagree with me on this? If we had a UBI in addition to all the current levels welfare/safety-nets, is this something you actually disagree with? Why?
    - 5y ago

onetimeusename 5y ago

I think that was confirmed in the Ontario UBI study. There was a small but significant minority of people whose lives worsened on UBI. Although a majority reported being better off a significant percentage of people were the same or worse. The study also showed that it basically did not change people's employment status or job training. That was a benefit touted for UBI. If people had income coming in that didn't depend on working they would seek job training and improve their careers. However, that did not appear to be the case generally. It took a lot of effort to find this. It was buried beneath news spam in search results where things were cherry picked out of it. Study is here: https://labourstudies.mcmaster.ca/documents/southern-ontarios-basic-income-experience.pdf https://labourstudies.mcmaster.ca/documents/southern-ontario...

pseudalopex 5y ago
Ontario's basic program was a minimum income guarantee. Not UBI. Earned income reduced benefits. And within 10 months a party opposed to the program took over and announced an early end. What do you think confirmed frivolous spending? What ruled out chronic health issues or other factors? Your source said 26.2% started education or training. Where did you see this basically did not change? 71.8% who didn't work during the program cited health issues.

NtochkaNzvanova 5y ago

I think it's pretty unlikely UBI will ever replace other welfare programs. At least in the US, the Rs and Ds are currently locked in a battle to drastically increase welfare. Even though the Ds nominally control congress, they aren't able to just ram it through. While I can see things moving further toward the D / increase welfare side in the future I can't see the Rs ever getting a strong enough majority that they would be able to eliminate other welfare programs in favor of UBI. (Which would be consistent with their platform, in the sense that a true UBI -- send $N per month to literally everyone -- would be able to eliminate a huge amount of government bureaucracy that is currently dedicated to administering all these programs.) In practice, none of the "UBI trials" I've heard about are anything close to UBI, even for a small community. In fact, UBI seems to be getting rebranded as "guaranteed basic income" (GBI), meaning not universal, but "guaranteed for the people we feel like giving it to". All these trials I have heard of still have an income means test, and some are even limited to particular racial groups.

RC_ITR 5y ago

Why is it society's job to prevent poor people from vices, whereas rich people generally get to do whatever they want? No one talks about CEO pay increases in terms of 'if we give them more money, they'll just spend it on drugs, emitting carbon, and other nefarious things'

rory 5y ago
The point is not protecting anyone from vices, the point is making sure basic needs are met. When CEOs spend their money in frivolous ways, they generally have enough to not need to fall back on additional public assistance. If UBI were instituted in place of other benefits programs, some poor people would spend the money unwisely (or unluckily) and still be short on food, housing, etc. when the money ran out. Of course this already happens in our current system, but theoretically it could happen more without some degree of government control of where money goes (like how section 8, SNAP, etc. work now).
- RC_ITR 5y ago
  >When CEOs spend their money in frivolous ways, they generally have enough to not need to fall back on additional public assistance The wealthy receive the lion's share of the wealth created by public subsidies, whihc they then spend as they please. 1. Marillyn Hewson was paid $30mn as a retirement package last year, and 75%+ of her company's revenue comes from the US government. 2. Hugh Grant of Monsanto was paid $20mn and a significant share of his company's revenue is driven by the US's $20bn farm subsidy. 3. Peter Thiel has saved c.$1bn in taxes by using the Roth IRA structure. I'm not trying to judge the morality of the above, but to act as though the wealthy don't receive government support tht they spend exactly as they please is a short-sighted position.
  - rory 5y ago
    I'm not sure if you are mistakenly replying in the wrong place, but that doesn't seem related to the basic-needs argument I (and, in a slightly different way, the thread OP) are making.

deleted 5y ago

[deleted]

cmrdporcupine 5y ago

Both welfare and UBI skirt the fundamental underlying issues of access to capital, voice/control in the workplace, equality of opportunity, concentration of wealth, concentration of power, etc. All of that would just still go on, but people would just probably-not starve. In fact I wonder if UBI were implemented if many of these things could worsen as political pressure from the working classes in the form of unions and political parties and the like would weaken. If you're able to feed yourself via UBI, why vote for a "left wing" party, or go on strike, or go to a demonstration etc in order to push for more workplace rights, etc.? Hence why I think actually there's plenty of support for UBI from people who would not normally be advocates of extensive social programs. Many old school Marxists saw welfare programmes as nothing more than an "escape valve" for the excesses of capitalism. Good as a "transitional demand" but harmful in the long run.

michaelmrose 5y ago

This is a complete misunderstanding about what it is to be poor. Poor people including "perpetually poor" aka most poor people are poor because they are lacking not in financial literacy but rather the necessary skills to make sufficient money to graduate from being poor. It's not that they fritter their money away its that they don't have any. They do jobs that pay them barely enough to afford their shitty lives and invest between commuting and working 50-65 hours doing so in between being parents and spouses and doing not only all the things you do save take time off but doing the paperwork, phone calls, meetings, and leg work to convince people that they are in fact still poor and still need benefits. If were to sit down and spend time optimizing these people's financial lives you would find that the amount "frittered" away is so tiny compared to child care, food, rent, medical costs that it wouldn't make a difference. Taking someone that for example makes and spends 20,800 and helping them not "fritter" away the 800 will not provide them with a means to climb out of poverty. There never was in that scenario enough resources no matter how they are budgeted. The most canonical example of this absurdity used to be complaining about poor people buying TVs with tax return checks as if someone who is $40,000 below a middle class household income would SOMEHOW be doing OK if they hadn't spent that $500. My other favorite example is people complaining about poor people pulling out an EBT card and a smartphone wherein the EBT card signifies that the government has decided that your income is $5000 short of what is required to eat and live and the phone costs $200 once + $20 a month while providing vital utility. Ultimately the benefits you describe as being targeted are pretty much targeted at keeping people from climbing out of poverty. Look at health insurance you can get medicine and care for nothing up until about $2000 a month income and then you have to buy your own insurance. Subsidies are great but they apply only if your employer doesn't offer an "affordable" plan the definition of affordable being if I recall correctly about 12% of your gross salary for the individual plan. There being tax benefits this inspires your employer to offer an "affordable plan" for individuals while jacking up the cost of covering your family. For example with my employers plan the employee + spouse costs 4x as much. Ultimately moving up from substantial poverty to ordinary poor is actually a net loss. You could if you don't ever want to move up or believe you will be able to be better off staying a little poorer working part time and collecting benefits. Think about that! Would you like to work 60 hours to be as well off as you were working 24? How do you think people respond to that sort of incentive structure?