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The fact that this article even needed to be written says a lot about the state of politics in America. I don't think I will ever wrap my head around the fact

The fact that this article even needed to be written says a lot about the state of politics in America. I don't think I will ever wrap my head around the fact that there are politicians who seem to sincerely believe that the best way to decrease poverty is to give tax cuts to the rich and huge corporations, instead of actions like what's described in the article.

RALaBarge 5y ago
They don’t actually believe it though - they get paid either directly or indirectly by the rich they are giving tax breaks to.
- heavyset_go 5y ago
  Many of politicians are significant asset owners, and asset owners' interests typically align with those whose absurd wealth is derived from asset ownership.
ip26 5y ago
I think you are straw-man'ing a bit. Of course giving people money results in them having more money. News at 11. But it's reasonable to question whether that's a good solution, a band-aid, or perhaps a short-term hack with future blowback, etc. Direct cash transfers are not exactly some foolproof, no-brainer solution to poverty. We've made a real mess in some third world countries with the cash spigot.
- sofixa 5y ago
  > We've made a real mess in some third world countries with the cash spigot. Has there been a comparable scenario of direct cash transfers to poor people?
  - zozbot234 5y ago
    GiveDirectly has studied this, and it's absolutely not making a "mess". What makes a mess is foreign aid directed at corrupt, large-scale, government- or NGO-driven "development" schemes. Giving cash just leaves the choice as to how to use the money to those who are best equipped to make it.
    - dado3212 5y ago
      I agree with the former (GiveDirectly and other institutions like J-PAL have been huge in putting together randomized trials around aid effectiveness, [1] for a specific example). The latter I think is more up for debate. There are papers showing that aid is still effective in areas with high government corruption. Definitely a pretty debated area though in terms of effectiveness of foreign aid. [1]. https://www.povertyactionlab.org/case-study/giving-directly-support-poor-households https://www.povertyactionlab.org/case-study/giving-directly-...
- User23 5y ago
  The real issue is that the ledger game is a dynamic system. Just because the currency issuer credits certain persons’ accounts in one round doesn’t mean that those accounts won’t sooner or later be depleted in future rounds. The obvious example is how a UBI will assuredly drive up rents as landlords move to capture the additional capacity to pay. Frankly, the day that UBI passes Congress will be the day the rentier class realizes this. To use Taleb’s terminology, the rentier class have made themselves antifragile. Look how they’ve benefited from political chaos be it financial crises or pandemics.
  - zozbot234 5y ago
    Rents are set at the margin. If UBI recipients can move to lower-rent/lower-cost areas while keeping their UBI, there's no reason for rents to rise.
  - CasperDern 5y ago
    This can argument can be made for all essential products/services, what you are arguing seems to be effectively UBI causes additional inflation, which may or may not be true.
- kevin__ 5y ago
  The thing is, we have actual data on a lot of these policies. And we know what works and doesn't work. 1 dollar spent on increasing food stamps increases GDP by something like $1.75. For something like an expanded child tax credit, it's more like $1.25. And for tax cuts for top earners, it's around $0.30. Even just looking at it from a purely economic standpoint, one policy is drastically better than the other. But more importantly, the first two policies also have enormous positive and direct benefits - they drastically decrease things like child poverty. These are some of the most obvious public policy choices for any wealthy country, and for whatever reason we just refuse to take action until there's a massive recession or a global pandemic, and even then it's for like 6 months or a year.
  - throwaway98211 5y ago
    >The thing is, we have actual data on a lot of these policies. And we know what works and doesn't work. Can you cite the 'actual data' -- has it held up to broad peer review? Can you provide examples of critique of these policies, and explain why detractors have concerns, and how we could address them? This isn't global warming (science is clear) -- social policy is inherently messy, with lots of tradeoffs, and is hard to prove empirically. There are lots of reasons why expanding the welfare state might be beneficial for society, but please stop with the moral grandstanding -- it does nothing to further real dialogue.
  - rsj_hn 5y ago
    > The thing is, we have actual data on a lot of these policies. I am very skeptical of this - not that we have data, but that the data suggests such a clear and simple relationship that is open to exploitation via policy. There is a long history of people trying to exploit correlations and realizing that the correlation breaks down whenever they try to turn this into a policy lever. There is also the issue that foodstamps might be beneficial up to a point, but when you flood the system with foodstamps they are no longer beneficial and can be harmful -- there are regimes of effectiveness.
- heavyset_go 5y ago
  > Direct cash transfers are not exactly some foolproof, no-brainer solution to poverty. We've made a real mess in some third world countries with the cash spigot. There's a huge difference between giving poor people some money with no strings attached, versus giving governments and ruling classes money with or without expectations, or IMF and World Bank-style economic imperialism.
- mensetmanusman 5y ago
  Actually, we made a real mess of things in other countries by attempting everything except direct cash payments. There is really interesting history around the food rationing program from the Red Cross that actually just increased human trafficking. It may turn out that direct cash payments are the most efficient means because then you parallelize the distribution of decisions.
bluedino 5y ago
Expanding income tax credits to people who don't earn income is just as strange to me
- zozbot234 5y ago
  Milton Friedman came up with that idea. The EITC was a compromise solution because Friedman's approach seemed too radical.
colechristensen 5y ago
Yes, if you draw a line in the sand as to what does and doesn't count as poverty and then give away a marginal sum of money, suddenly many people cross from nearby one side of that line to nearby the other. Surely this makes a difference in the lives of these people but on large scales, how much of a difference have you actually made? Effectively what you've erected is a subsidy for high rent and low wages which target the poor, there must be better solutions than solidifying the systematic problems which capture this segment of the population.
- frgtpsswrdlame 5y ago
  >Surely this makes a difference in the lives of these people but on large scales, how much of a difference have you actually made? Judging by the article, quite a large difference. >there must be better solutions than solidifying the systematic problems which capture this segment of the population. We're talking about poor children here. The systemic problem of this segment of the population is that they are poor. It's easy to talk about poor adults and prescribe behavioral adjustments, it's a way of assigning desert. It's much harder to talk about poor children because it's obvious that no child deserves to be poor.
- zozbot234 5y ago
  > on large scales, how much of a difference have you actually made? Giving cash to liquidity- and asset-constrained folks with high-value spending needs (like raising a kid) makes a huge difference if you can even roughly target the intervention to them. It's almost impossible to theoretically bound the benefit, it could be very large indeed. Even if some money were wasted on "bad" spending, and even though redistributing it is inherently costly, it's the kind of thing that's absolutely worth trying. It has all the well-known benefits of UBI, except on an even larger scale.
rr808 5y ago
You're over simplifying but yes, many people believe strong and profitable companies and entrepreneurs create a wealthier society that creates benefits for just about everyone. Compare that to communism which does spread wealth more fairly but ends up running the economy into the ground. In the end people move from the "fair" communist countries to the "unfair" capitalist ones.
- rootusrootus 5y ago
  Talk about over simplifying. We could move a very long ways to the left in economic policy and still be nowhere even remotely approaching communism.
MaxMoney 5y ago
devwastaken 5y ago
Economics theory as taught in U.S. universities literally says that tax cuts to the rich are overall beneficial, that welfare is bad and unemployment is bad, it actually states that equality is opposite of economic efficiency. Capitalism is a religion, they believe because they grew up told to believe it. We have found out that the theory is almost entirely made up and rarely reflects reality.

RALaBarge 5y ago

They don’t actually believe it though - they get paid either directly or indirectly by the rich they are giving tax breaks to.

heavyset_go 5y ago
Many of politicians are significant asset owners, and asset owners' interests typically align with those whose absurd wealth is derived from asset ownership.

ip26 5y ago

I think you are straw-man'ing a bit. Of course giving people money results in them having more money. News at 11. But it's reasonable to question whether that's a good solution, a band-aid, or perhaps a short-term hack with future blowback, etc. Direct cash transfers are not exactly some foolproof, no-brainer solution to poverty. We've made a real mess in some third world countries with the cash spigot.

sofixa 5y ago
> We've made a real mess in some third world countries with the cash spigot. Has there been a comparable scenario of direct cash transfers to poor people?
- zozbot234 5y ago
  GiveDirectly has studied this, and it's absolutely not making a "mess". What makes a mess is foreign aid directed at corrupt, large-scale, government- or NGO-driven "development" schemes. Giving cash just leaves the choice as to how to use the money to those who are best equipped to make it.
  - dado3212 5y ago
    I agree with the former (GiveDirectly and other institutions like J-PAL have been huge in putting together randomized trials around aid effectiveness, [1] for a specific example). The latter I think is more up for debate. There are papers showing that aid is still effective in areas with high government corruption. Definitely a pretty debated area though in terms of effectiveness of foreign aid. [1]. https://www.povertyactionlab.org/case-study/giving-directly-support-poor-households https://www.povertyactionlab.org/case-study/giving-directly-...
User23 5y ago
The real issue is that the ledger game is a dynamic system. Just because the currency issuer credits certain persons’ accounts in one round doesn’t mean that those accounts won’t sooner or later be depleted in future rounds. The obvious example is how a UBI will assuredly drive up rents as landlords move to capture the additional capacity to pay. Frankly, the day that UBI passes Congress will be the day the rentier class realizes this. To use Taleb’s terminology, the rentier class have made themselves antifragile. Look how they’ve benefited from political chaos be it financial crises or pandemics.
- zozbot234 5y ago
  Rents are set at the margin. If UBI recipients can move to lower-rent/lower-cost areas while keeping their UBI, there's no reason for rents to rise.
- CasperDern 5y ago
  This can argument can be made for all essential products/services, what you are arguing seems to be effectively UBI causes additional inflation, which may or may not be true.
kevin__ 5y ago
The thing is, we have actual data on a lot of these policies. And we know what works and doesn't work. 1 dollar spent on increasing food stamps increases GDP by something like $1.75. For something like an expanded child tax credit, it's more like $1.25. And for tax cuts for top earners, it's around $0.30. Even just looking at it from a purely economic standpoint, one policy is drastically better than the other. But more importantly, the first two policies also have enormous positive and direct benefits - they drastically decrease things like child poverty. These are some of the most obvious public policy choices for any wealthy country, and for whatever reason we just refuse to take action until there's a massive recession or a global pandemic, and even then it's for like 6 months or a year.
- throwaway98211 5y ago
  >The thing is, we have actual data on a lot of these policies. And we know what works and doesn't work. Can you cite the 'actual data' -- has it held up to broad peer review? Can you provide examples of critique of these policies, and explain why detractors have concerns, and how we could address them? This isn't global warming (science is clear) -- social policy is inherently messy, with lots of tradeoffs, and is hard to prove empirically. There are lots of reasons why expanding the welfare state might be beneficial for society, but please stop with the moral grandstanding -- it does nothing to further real dialogue.
- rsj_hn 5y ago
  > The thing is, we have actual data on a lot of these policies. I am very skeptical of this - not that we have data, but that the data suggests such a clear and simple relationship that is open to exploitation via policy. There is a long history of people trying to exploit correlations and realizing that the correlation breaks down whenever they try to turn this into a policy lever. There is also the issue that foodstamps might be beneficial up to a point, but when you flood the system with foodstamps they are no longer beneficial and can be harmful -- there are regimes of effectiveness.
heavyset_go 5y ago
> Direct cash transfers are not exactly some foolproof, no-brainer solution to poverty. We've made a real mess in some third world countries with the cash spigot. There's a huge difference between giving poor people some money with no strings attached, versus giving governments and ruling classes money with or without expectations, or IMF and World Bank-style economic imperialism.
mensetmanusman 5y ago
Actually, we made a real mess of things in other countries by attempting everything except direct cash payments. There is really interesting history around the food rationing program from the Red Cross that actually just increased human trafficking. It may turn out that direct cash payments are the most efficient means because then you parallelize the distribution of decisions.

bluedino 5y ago

Expanding income tax credits to people who don't earn income is just as strange to me

zozbot234 5y ago
Milton Friedman came up with that idea. The EITC was a compromise solution because Friedman's approach seemed too radical.

colechristensen 5y ago

Yes, if you draw a line in the sand as to what does and doesn't count as poverty and then give away a marginal sum of money, suddenly many people cross from nearby one side of that line to nearby the other. Surely this makes a difference in the lives of these people but on large scales, how much of a difference have you actually made? Effectively what you've erected is a subsidy for high rent and low wages which target the poor, there must be better solutions than solidifying the systematic problems which capture this segment of the population.

frgtpsswrdlame 5y ago
>Surely this makes a difference in the lives of these people but on large scales, how much of a difference have you actually made? Judging by the article, quite a large difference. >there must be better solutions than solidifying the systematic problems which capture this segment of the population. We're talking about poor children here. The systemic problem of this segment of the population is that they are poor. It's easy to talk about poor adults and prescribe behavioral adjustments, it's a way of assigning desert. It's much harder to talk about poor children because it's obvious that no child deserves to be poor.
zozbot234 5y ago
> on large scales, how much of a difference have you actually made? Giving cash to liquidity- and asset-constrained folks with high-value spending needs (like raising a kid) makes a huge difference if you can even roughly target the intervention to them. It's almost impossible to theoretically bound the benefit, it could be very large indeed. Even if some money were wasted on "bad" spending, and even though redistributing it is inherently costly, it's the kind of thing that's absolutely worth trying. It has all the well-known benefits of UBI, except on an even larger scale.

rr808 5y ago

You're over simplifying but yes, many people believe strong and profitable companies and entrepreneurs create a wealthier society that creates benefits for just about everyone. Compare that to communism which does spread wealth more fairly but ends up running the economy into the ground. In the end people move from the "fair" communist countries to the "unfair" capitalist ones.

rootusrootus 5y ago
Talk about over simplifying. We could move a very long ways to the left in economic policy and still be nowhere even remotely approaching communism.

MaxMoney 5y ago

devwastaken 5y ago

Economics theory as taught in U.S. universities literally says that tax cuts to the rich are overall beneficial, that welfare is bad and unemployment is bad, it actually states that equality is opposite of economic efficiency. Capitalism is a religion, they believe because they grew up told to believe it. We have found out that the theory is almost entirely made up and rarely reflects reality.