Suspicious discontinuities (2020)

If we anticipate the private or nonprofit providers might perform poverty alleviation more optimally, we

(1) massively duplicate fixed costs for logistics

(2) ignore that a primary reason governments exist at all is to help prevent people from starving to death, despite it often being hijacked by powermongers

Just gotta say, that's a pretty extreme position to take.

Specific to the welfare/UBI/public benefits subthread of this (with a digression):

I saw the phrase "middle class solution to lower class problem ['MCSLCP']" applied to stuff like this years ago; that characterisation is possibly not politically correct today. It was discussing various forms of 'credit fine print' --- the ad for "Buy this recliner today, no interest, no payments for three months!!!" ... followed by five lines of fine print at the bottom of the ad (likely double the verbiage of this posting) about need to pay promptly, the upfront fees, etc etc, and the (somewhat usurious) rates and fees payable if the process wasn't followed to the letter.

What makes it 'MCSLCP' is that for a large percentage of the population that would look at this, if you have the time / savvy to assess the deal and make it work, you probably have better credit options available. [1]

It's super easy to comply with the terms if you have a personal organization system ('tickler') that works. Maintaining that system is really tough if you're a single parent/double job trying to keep the ship afloat... and also to have the funds to keep the deal working on the day that the tickler is triggered.

But the 'MCS' of the MCSLCP is, just buy it with the cash-back credit card, and pay the balance in full before the due date. Easy percentage, and you already do that as part of the monthly bill-payment chore.

For the vendor, the deal is a moneymaker since the majority of the takers will not (be able to) comply with the letter of the terms, and the fees and rates become the profit.

The public benefit aspect is that, the space to screw it up and lose the benefits is politically a feature, not a bug. The legislators can paint themselves as guardians of the public purse and the people who blew the cliff as thwarted welfare cheats.

[1] if I could 'ping' patio11 on this... I think some recent posts from 'bits about money' are in the same area as this.

I guess you were taxed on cash accounting not accrual?

This unthinking encoding of thresholds feels like a 'Systems' problem that percolates into almost every part of life, whether its income brackets or hard limits on how many books you can borrow from the library. Some make more sense than others, just out of the sheer complexity and cost of implementing continuous (e.g. tapering) systems in the real world.

A particularly troublesome example I encountered, entirely unrelated to finance, was when working on a renal ward in hospital, we had to count respiration rate and input it into the obs machine, but if you inputted over 16, it would increase their sepsis score (or "acute deterioration"), meaning there'd be additional work to be done. It was rarely the case that they were actually producing symptoms of sepsis, but because of the hard threshold, to my horror, nurses would often just enter 16 on the mark, and juniors like me were told to do the same.

I'm sure there are literally tonnes of examples of these discontinuities and the bad incentives they produce across every industry and government function. In addition to laziness and inertia, I feel a general problem is that lack of curve/distribution/continuous-thinking in our schooling, as opposed to the easier discrete thinking.

All systems are fundamentally analog in nature. If only we just taught things this way...

The most common variant is for (effectively) every adult citizen to receive a fixed "tax refund" amount.

This is paid for by a combination of: replacing existing welfare with UBI, retrenching the bureaucrats that used to implement those complex welfare programs, and increasing the percentage of income tax paid.

There's some threshold where you might pay extra $20K on your income, but you get a flat $20K back as UBI, so you don't notice any change. This is typically somewhere in the middle class. Everyone poorer than this gets a boost to their income and/or have their existing welfare (and associated requirements!) replaced by an unconditional payment.

Everyone richer pays more tax, but not a huge amount more, since UBI mostly replaces existing welfare. It isn't an entirely new type of welfare on top of existing welfare -- this is the strawman that the right-wing likes to use in debates.