Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Cash to the poor: Giving money directly works surprisingly well

economist.com

Post reply on HN
Print view View original

41–50 of 142 posts

Re: Cash to the poor: Giving money directly works surprisingly well

#41

Post by nhaehnle »

ekianjo wrote: post #5
frank_boyd wrote: post #2

As a matter of fact, society has not a single valid reason to allow concentration of excessive wealth on some kind of restricted group or "elite" (as, by the way, also promoted erroneously by the idea of the "American Dream"). Here are a few facts to explain that this concept is not sane at all: - Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating…

> - Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do). Another economical fallacy. When you put money in the bank, it's not standing there doing nothing. Savings are invested, loaned, used to create additional value. That's why banks want y…

As to the relationship between savings and investment, and the role of banks in there, ask yourself the following question:

Suppose that Alice decides that, from this month on, she will start putting aside 10% of her monthly income into a long-term savings account. Will this decision cause the bank to make more loans?

By default, the answer seems to be no. After all, banks lend out money when creditworthy borrowers show up at their door. How could Alice's decision possibly encourage anybody to borrow? If anything, her decision has reduced some businesses' incomes, and those businesses are now less likely to ask for a loan because they have less reason to expand their business.

If you want to argue that the answer is yes, you'll have to point out a clear transmission mechanism to justify your answer.

As to the point of why banks continue to offer savings accounts, the answer is mostly one of interest rate differentials. Banks don't have to offer savings accounts. They could refinance themselves via other means. It's just that those other means typically come with a higher interest rate.

Re: Cash to the poor: Giving money directly works surprisingly well

#42

Post by ekianjo »

Crake wrote: post #37
ekianjo wrote: post #33

Earlier quoted context omitted.

I'm not just dismissive of Egalitarinism only because it's unnatural, but also because it goes against the individual's freedom in the end. There will be always be a point if you follow that line of thought where the power in place will crush your individual interests just for the sake of making your condition the same as everyone else (even on the basis of good intentions...). That, in itself, is against Human natur…

>Education goes to the lowest common denominator and becomes basically crap for everyone involved >health services which are subpar, with waiting lines and mediocre equipment >the middle-class and the poor are forever restrained to a diminished quality of life Are you sure you aren't talking about present day America? All of these things have become widespread here as a result of income inequality--something you've s…

> Are you sure you aren't talking about present day America

I'm just talking about the world I know. I don't live in America. I can't say whether it's better or worse.

Re: Cash to the poor: Giving money directly works surprisingly well

#43

Post by Kliment »

goggles99 wrote: post #38

Here is a wild concept, mandate that people take care of people. Use the government only to enforce this. The government is full of corruption and waste, they are innefective in matters that require an actual soul (such as people who have made mistakes, people who have no reason to care, impoverished people, prisoners ETC.)... What if you could take the percentage of taxes that you spend every year and choose whom to…

Sounds like a recipe for even worse corruption. Pay into your friend's charity, have your friend pay into your charity. Make a deal with a homeless person that if you get back half of what you give them you'll give them a lot of money. You can continue on your own.

Re: Cash to the poor: Giving money directly works surprisingly well

#44

Post by ufseagull »

goggles99 wrote: post #38

Here is a wild concept, mandate that people take care of people. Use the government only to enforce this. The government is full of corruption and waste, they are innefective in matters that require an actual soul (such as people who have made mistakes, people who have no reason to care, impoverished people, prisoners ETC.)... What if you could take the percentage of taxes that you spend every year and choose whom to…

>What if you could take the percentage of taxes that you spend every year and choose whom to help with it.

You realise that, especially where I live, one can make tax deductible donations to a wide variety of organisations? I give away thousands and get to write off much of the tax. In fact, I give away a few thousand and can technically qualify for a different tax bracket, I believe.

>We would have charities all over the place competing for this money, competition would produce far better results than the abysmal record of the state/federal social services.

No, you would have charities spending this money on advertising and gimmicks to get their share of your dollar. Some charities today spend large proportions of their budgets advertising and engaging in lawsuits (e.g. Susan B Komen)

What the government does is use it's uniquely large scale to help people. Education, healthcare, housing, welfare - for many countries in the world, having the government provide these services results in an relatively efficient system. I for one would rather pay the Medicare Levy in Australia than pay for private healthcare in the US - last time I was living there, the US system left me about $1500 worse off, and that was a year without any medical mishaps.

Re: Cash to the poor: Giving money directly works surprisingly well

#46

Post by Ygg2 »

ekianjo wrote: post #16
georgemcbay wrote: post #9

Earlier quoted context omitted.

Nature may be unfair, but it is way more fair than modern wealth distribution. The richest 300 people in the world have more money combined than the poorest 3 billion people. You don't see deviances like that in genetics. Also, if you believe all Americans (also applies to all other nationalities) have the same rights in regard to the law, well I don't even know how to respond to that, because believing that would ma…

> The richest 300 people in the world have more money combined than the poorest 3 billion people So, what is your point, exactly ? The world would be better place if everyone was as poor as the next ? You could say that the Universe is incredibly unfair, after all, for all we know, Earth is the only planet with advanced life in the Milky Way, and would it be better if instead there was bacterian life everywhere inste…

That vibrant "YES" rings hollow. Europe is going through a lot of shit with rise of outright fascist parties - e.g. Greece's Golden Dawn (they might have removed Golden Dawn but the resentment needed for another fascist party to form is there, waiting). If one of more powerful states goes fascist (e.g. USA, Germany, France), you could very well see massive bloodshed and wars. And please don't tell me wars are good for anyone.

If social mobility and equality are disrupted, the society is in a bad position.

Re: Cash to the poor: Giving money directly works surprisingly well

#47

Post by calibraxis »

goggles99 wrote: post #38

Here is a wild concept, mandate that people take care of people. Use the government only to enforce this. The government is full of corruption and waste, they are innefective in matters that require an actual soul (such as people who have made mistakes, people who have no reason to care, impoverished people, prisoners ETC.)... What if you could take the percentage of taxes that you spend every year and choose whom to…

I'd agree, if each person had equal percentage of control over that tax money. So, Larry Ellison would have as much to allocate as a homeless person. (Otherwise, allocation decisions concentrated in hands of those already with more power over those decisions.)

Re: Cash to the poor: Giving money directly works surprisingly well

#48

Post by Shivetya »

georgemcbay wrote: post #9
ekianjo wrote: post #5

Earlier quoted context omitted.

> - Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do). Another economical fallacy. When you put money in the bank, it's not standing there doing nothing. Savings are invested, loaned, used to create additional value. That's why banks want y…

Nature may be unfair, but it is way more fair than modern wealth distribution. The richest 300 people in the world have more money combined than the poorest 3 billion people. You don't see deviances like that in genetics. Also, if you believe all Americans (also applies to all other nationalities) have the same rights in regard to the law, well I don't even know how to respond to that, because believing that would ma…

and the vast majority of those three billion are in the state they are in because of politicians. Whether their own or others. Take the money from those 300 and I doubt the number served with it would matter nor have a lasting impact.

Re: Cash to the poor: Giving money directly works surprisingly well

#49

Post by wikiburner »

goggles99 wrote: post #38

Here is a wild concept, mandate that people take care of people. Use the government only to enforce this. The government is full of corruption and waste, they are innefective in matters that require an actual soul (such as people who have made mistakes, people who have no reason to care, impoverished people, prisoners ETC.)... What if you could take the percentage of taxes that you spend every year and choose whom to…

I've had similar thoughts on social security. It would make a lot of sense to simply require citizens to save or invest a certain portion of their annual income.

You could have enforced diversification (certain percentages allowed for high vs. low risk), and accreditation boards to vet and approve mutual and index funds.

Also, the investment would have a very stimulative effect on the economy, and you could probably also set it up in such a way that it works on autopilot (like a 401(k)) for those that can't be bothered..

It would be quite a bit less draconian than the government simply confiscating the money. In the private sector, the current setup would rightly be called a ponzi scheme.

Re: Cash to the poor: Giving money directly works surprisingly well

#50

Post by lazylizard »

in singapore you can see the effects of all that economic growth besides the billion dollar gardens and F1 races and casinos...in residential areas many old folks collect empty cans and cardboard for a living. despite laws that compel offspring to financially support parents. you don't see beggars on the street, nor homeless people. and unemployment is super low. its..fairly interesting.
Post reply on HN