Hacker News Reader

Comment by paulpauper | Hacker News Reader

Of course it did. The question or debate is not if unconditional money helps, but if it's better than alternatives which may be cheaper, such as food credits. Even middle class people would benefit, like $750 to buy groceries. Inflation obviously will erode some of this new purchasing power.

View on HN

A lot of the debate is very sincerely arguing that it doesn't actually help, so making it clear that it really actually does is important to shut down some of the ignorance:

“It may not be earth-shattering that providing money is going to help meet basic needs, but I do think it dispels this myth that people will use money for illicit purposes,” Henwood said. “We weren’t finding that in the study.”

> A lot of the debate is very sincerely ...

I suspect a lot of the debate is very insincerely arguing that.

Hey give me $10k. I won't use it for illicit purposes, but I want the money. This is not a justification for giving money.

The government is very good at giving people money. It's less good at adjudicating whether people require that money. Replacing every government assistance program with direct, unconditional cash transfers would almost certainly be cheaper than the bureaucracy that must be maintained to ensure only "deserving" people get assistance.

I'm very much in favor of UBI. Replacing literally "every government assistance program" has me worried though. I think for most folks this will work well. I do wonder about people with special needs though for whom that won't be sufficient. Might it be physical or mental disabilities, it can get more expensive quickly.

Sure. UBI would probably work best paired with universal healthcare that covers special needs cases.

I broadly agree with you, I favor UBI for similar reasons, though I'd maybe frame it less as "very good vs. less good", vs. just acknowledging the enormous overhead costs of means-testing, to say nothing of the consequences when bureaucracy turns corrupt or Kafka-esque.

But devil's advocate: is there any reason the same outcome couldn't be accomplished with a negative income tax instead, leveraging a bureaucratic infrastructure which already exists and isn't going anywhere?

I don't really care how it's delivered, as long as it's a regular payment throughout the year that people can depend on.

(US specific) The monthly advanced child tax credit, effectively a negative tax, lifted hundreds of thousands of children out of poverty for the short time it existed. Building that into a permanent, regular, universal cash transfer is not mechanically difficult but is intractable politically.

How would the negative income tax work in practice? Do I need to wait a full year for my tax return to get a lump sum payment?

That's a good point. It was famously the preferred policy of Milton Friedman (presumably as a cheaper alternative to the welfare state, back when the Overton window was still more FDR than Reagan). A negative income tax might need to be paid out weekly or monthly to make a meaningful difference to the homeless and the working poor (to say nothing of access to banking services; as long as we're waving policy magic wands, let's add postal banking to the mix.)

Of course, I feel obliged to bring up the Georgist objection: that either negative tax or UBI would need to contend with the problem of ground rents, lest landlords simply jack up the rent by the $X additional income that they know for a fact that everyone has.

Fun aside: Thomas Paine, the author of "Common Sense", made one of the earliest proposals for a citizen's dividend [0] (funded by ground rents), but going the other direction: a one-time lump sum during young adulthood, as a means to bootstrap a homestead or small business.

[0] https://en.wikipedia.org/wiki/Agrarian_Justice

LVT and just giving people money fixes everything! Ezra Klein recently had a guest who talked about baby bonds which matches Thomas Paine's goals: https://open.spotify.com/episode/6NhjzbFvy2B8C7y0O6zhMh?si=N...

100%, thanks for the link!

The point is not that it helped, the point is that they used it to exit homelessness. This is important because of the pervasive and empirically incorrect assertion that people do not have housing because they simply choose not to.

“i correct“ -> “incorrect”, I presume?

Some people choose to.

Any assertion that all or none do are wrong.

"Food credits" are an expensive and paternalistic Big Government approach to the problem. Is the idea that poor people don't know they need to buy food? Or that the government knows what you should be eating better than you do? SNAP spends something like $0.15 of every dollar on administrative and has complicated rules.

better and cheaper than the $750 going to drugs or alcohol?

>Big Government

Food credits or $750, you realize it's still coming from taxpayers either way? If someone is homeless it means that they already failed and need help. There is no way it cannot be paternalistic. The question is what is the best solution.

Sometimes people have bad luck and typically people have a better understanding of what would help them the most than someone in a government office who has never met them before.

> better and cheaper than the $750 going to drugs or alcohol?

It didn't. That was one of the conclusions of the study being discussed.

At the risk of stating the obvious: someone who's homeless may need medical treatment or, you know, a home more than they need food at that moment.

> Food credits or $750, you realize it's still coming from taxpayers either way?

The method that costs much less to administer... costs much less to administer.

> If someone is homeless it means that they already failed and need help.

That's obviously not true. And also isn't how we view the taxpayer-funded fire department coming to put out a house fire.

Question for economists: If you give everybody in the US $500 in food credits per month, do food prices go up, or do wages go down?

Edit: Let's say there's an expiry function on the credits. Something like you get to keep 50% of the credits if they rollover.

in general that scenario means both go up, although i’m sure you can find weird edge cases.

edit: for example, expiration of credit funds could lead to a reduction in wages if it meant less money is spent in the economy than taxed in it.

Reply on news.ycombinator.com