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Suspicious Discontinuities

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Re: Suspicious Discontinuities

#111

Post by SilasX »

peteretep wrote: post #106
SilasX wrote: post #82

Earlier quoted context omitted.

Relatedly, I learned about Universal Credit, an attempt by the UK to merge all their social benefits into one coherent system, and it seems like the cliff problem here is worse. From the BBC description: https://www.bbc.com/news/uk-41487126 >Under the old system many faced a "cliff edge", where people on a low income would lose a big chunk of their benefits in one go as soon as they started working more than 16 hours…

I think you have misread or misunderstood this. Under the old system, it was possible to take a job, and then have less actual income than you did before. Under the new system, _every_ extra hour of work you do causes you to have more money in your pocket, and you are always incentivized to do more work, or start a job that pays less now but might pay more as your experience grows. I'm not sure how else you'd want th…

My point was that 63% is still very bad, and if it’s supposed to be an improvement, then the existing system is abysmal from an incentive perspective.

Re: Suspicious Discontinuities

#112

Post by SilasX »

mantap wrote: post #104
SilasX wrote: post #82

Earlier quoted context omitted.

Relatedly, I learned about Universal Credit, an attempt by the UK to merge all their social benefits into one coherent system, and it seems like the cliff problem here is worse. From the BBC description: https://www.bbc.com/news/uk-41487126 >Under the old system many faced a "cliff edge", where people on a low income would lose a big chunk of their benefits in one go as soon as they started working more than 16 hours…

The purpose of universal credit was not to solve any particular problem - it was to give conservative politicians something to say when their voters demanded something must be done [about people on benefits]. The world makes a lot more sense when you realise that laws and regulations are primarily conceived and constructed to keep incumbents in power. Maybe we should vote in our representatives for life then they'd a…

If the system incentivizes capable people not to work and just live off taxes, that should be corrected.

Re: Suspicious Discontinuities

#113

Post by umvi »

iron0013 wrote: post #84
thrower123 wrote: post #78

Earlier quoted context omitted.

Government paternalism is terrifying. People are going to screw up, and make bad choices, but having choices is better than being treated like a child your entire life.

Speaking of children, that’s who’s gonna starve if you decide to let them suffer the consequences of their parents’ poor choices. I would have personally starved to death dozens of times over if not for food stamps.

You might have been more hungry, but death by starvation in the USA is nearly unheard of. I personally have never heard of anyone - homeless or otherwise - dying of starvation in the USA. The only people I've heard of dying of starvation were stranded on a mountain or on the ocean or something.

Re: Suspicious Discontinuities

#114

Post by lmm »

SilasX wrote: post #82
btilly wrote: post #74

The perverse incentives around these discontinuities is one of the worst misfeatures of programs intended to help people. Here is a real example. My niece wound up with 3 kids, divorced, with inconsistent child support payments. So she went on food stamps. She was looking for a better job. She found one, interviewed, and they wanted to hire her. But the salary that they offered was $0.50/hour too much for her to stay…

Relatedly, I learned about Universal Credit, an attempt by the UK to merge all their social benefits into one coherent system, and it seems like the cliff problem here is worse. From the BBC description: https://www.bbc.com/news/uk-41487126 >Under the old system many faced a "cliff edge", where people on a low income would lose a big chunk of their benefits in one go as soon as they started working more than 16 hours…

63% is not necessarily so bad. Income tax rates for the well off went as high as 95% at some points in UK history, and those do not seem to have been disastrous (indeed they seem to be some of the country's finest years).

And beyond that you're letting perfect be the enemy of good here. Eliminating the cliffs and capping the marginal tax rate of the poor at 63% is valuable progress. If you want things to get better you should celebrate the small victories, not treat them as an opportunity to complain more.

Re: Suspicious Discontinuities

#115

Post by nnx »

thrower123 wrote: post #78
tjr225 wrote: post #77

Earlier quoted context omitted.

Either that or a more progressive stance on socialist policies that provide basics to everyone. At least with socialist style policies there isn't the possibility of those spending their UBI on junk food or wine our whatever, but I really would prefer either to the current state of affairs.

Government paternalism is terrifying. People are going to screw up, and make bad choices, but having choices is better than being treated like a child your entire life.

As Andrew Yang rightly said "nobody has ever wondered if shareholders would screw up, make bad choices, when receiving their dividends".

Re: Suspicious Discontinuities

#116

Post by crooked-v »

SilasX wrote: post #111
peteretep wrote: post #106

Earlier quoted context omitted.

I think you have misread or misunderstood this. Under the old system, it was possible to take a job, and then have less actual income than you did before. Under the new system, _every_ extra hour of work you do causes you to have more money in your pocket, and you are always incentivized to do more work, or start a job that pays less now but might pay more as your experience grows. I'm not sure how else you'd want th…

My point was that 63% is still very bad, and if it’s supposed to be an improvement, then the existing system is abysmal from an incentive perspective.

It's not 63%, it's a reduction of £0.63 in benefits (not in your total income) for each extra dollar you earn in income over the cutoff level.

This prevents situations where it's better to stay under a cutoff of X in income until you can jump straight to an income of X income + Y in benefits, while staying on benefits until then.

Re: Suspicious Discontinuities

#117

Post by crooked-v »

lmm wrote: post #114
SilasX wrote: post #82

Earlier quoted context omitted.

Relatedly, I learned about Universal Credit, an attempt by the UK to merge all their social benefits into one coherent system, and it seems like the cliff problem here is worse. From the BBC description: https://www.bbc.com/news/uk-41487126 >Under the old system many faced a "cliff edge", where people on a low income would lose a big chunk of their benefits in one go as soon as they started working more than 16 hours…

63% is not necessarily so bad. Income tax rates for the well off went as high as 95% at some points in UK history, and those do not seem to have been disastrous (indeed they seem to be some of the country's finest years). And beyond that you're letting perfect be the enemy of good here. Eliminating the cliffs and capping the marginal tax rate of the poor at 63% is valuable progress. If you want things to get better y…

As the reduction applies only to the benefits (not to your income), it's just a smooth reduction in benefits as you earn more money, not a tax.

Re: Suspicious Discontinuities

#118

Post by crooked-v »

SilasX wrote: post #82
btilly wrote: post #74

The perverse incentives around these discontinuities is one of the worst misfeatures of programs intended to help people. Here is a real example. My niece wound up with 3 kids, divorced, with inconsistent child support payments. So she went on food stamps. She was looking for a better job. She found one, interviewed, and they wanted to hire her. But the salary that they offered was $0.50/hour too much for her to stay…

Relatedly, I learned about Universal Credit, an attempt by the UK to merge all their social benefits into one coherent system, and it seems like the cliff problem here is worse. From the BBC description: https://www.bbc.com/news/uk-41487126 >Under the old system many faced a "cliff edge", where people on a low income would lose a big chunk of their benefits in one go as soon as they started working more than 16 hours…

With this system you're guaranteed to never end up with less total money than you started with by getting a better-paying job, which makes it definitionally not a cliff. It's just a gradual reduction in benefits as you earn more.

Re: Suspicious Discontinuities

#119

Post by crooked-v »

umvi wrote: post #113
iron0013 wrote: post #84

Earlier quoted context omitted.

Speaking of children, that’s who’s gonna starve if you decide to let them suffer the consequences of their parents’ poor choices. I would have personally starved to death dozens of times over if not for food stamps.

You might have been more hungry, but death by starvation in the USA is nearly unheard of. I personally have never heard of anyone - homeless or otherwise - dying of starvation in the USA. The only people I've heard of dying of starvation were stranded on a mountain or on the ocean or something.

"Well, at least there aren't a lot of people literally starving to death" isn't exactly a glowing endorsement of the system.

Re: Suspicious Discontinuities

#120

Post by throwaway87lcg6 »

umvi wrote: post #113
iron0013 wrote: post #84

Earlier quoted context omitted.

Speaking of children, that’s who’s gonna starve if you decide to let them suffer the consequences of their parents’ poor choices. I would have personally starved to death dozens of times over if not for food stamps.

You might have been more hungry, but death by starvation in the USA is nearly unheard of. I personally have never heard of anyone - homeless or otherwise - dying of starvation in the USA. The only people I've heard of dying of starvation were stranded on a mountain or on the ocean or something.

> death by starvation in the USA is nearly unheard of

> I would have personally starved to death dozens of times over if not for food stamps.

You're saying the same thing.

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