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America’s Covid job-saving programme gave most of its cash to the rich

economist.com

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Re: America’s Covid job-saving programme gave most of its cash to the rich

#261

Post by lmm »

wyager wrote: post #244
lmm wrote: post #228

Earlier quoted context omitted.

> Half of everyone and 95% of beneficiaries of UBI > Being a beneficiary of UBI is already extremely compelling evidence of inability to efficiently allocate capital (personal or monetary). The whole point of UBI is that it's universal and everyone is a beneficiary. > I guarantee that forcing me to ""invest"" my labor by giving it away to random people will have vastly lower returns (personal and social) than letting…

> The whole point of UBI is that it's universal and everyone is a beneficiary. If I get a check for $1,000 every month and I lose $5,000 on taxes every month, I'm not really a beneficiary. This is a wealth redistribution scheme. The wealth is being redistributed from people who are self-evidently efficient capital allocators to people who are self-evidently not. (That's a Bayesian judgement, not an absolute one.) > T…

> This is a wealth redistribution scheme.

At first order it is, but at first order virtually any policy involves moving wealth around, and at first order any such thing is zero-sum.

> from people who are self-evidently efficient capital allocators to people who are self-evidently not.

Given that the biggest factor affecting income is parental class, that seems far from self-evident. More importantly, if we want to encourage the kind of higher risk tolerance that increases overall productivity on average, taking a chunk of upside to eliminate the downside makes sense. Putting $1m into a 50-50 chance that will produce $10m of value if it works out but leave you destitute if it doesn't is a positive for society, but irrational at an individual level; a tax system that leaves you with $5m if it works out and $50k if it doesn't aligns the incentives better. We already see that people who are lucky enough to have that kind of safety net by coincidence (e.g. rich families/friends) tend to be more entrepreneurial and willing to take the risks that do pay off than people who don't.

> Please, I'd love to hear how "organized society" is synonymous with "welfare programs".

I mean you can go right back to the Roman Empire and "bread and circuses". Organised society has always meant some level of support for those on the bottom.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#262

Post by wyager »

mlyle wrote: post #252
wyager wrote: post #233

Earlier quoted context omitted.

I agree that UBI would be less distortive per dollar than what we have now, but unless there's a credibles strategy to make this happen, why bother discussing it? I suspect it's a pipe dream. Politics is a gang fight; any pretense of social optimization is just a thin veneer. Whose votes can you buy with the promise of UBI replacing extant welfare schemes? Every extant welfare scheme is a vote buying program which yo…

Even Yang proposed making UBI mutually contradictory with receiving other benefits. > Every extant welfare scheme is a vote buying program which you're now nuking. While some peoples' votes will be bought with welfare money, others will support it because they don't think it's OK to let the poor starve or don't want the poor to riot. E.g. me: I don't receive public assistance. I think welfare programs are necessary (…

Your well-intentioned vote isn't enough to eliminate the system we have now. Getting the welfare schemes we have now in place took both credulous moral voters and the voting blocs who constitute the self-interested recipients of these welfare schemes. The recipients of the current schemes are never going to vote to get rid of the current schemes. They would net fare worse under a more efficient scheme. So who are you going to team up with to get the votes?

Re: America’s Covid job-saving programme gave most of its cash to the rich

#263

Post by xyzzy123 »

wyager wrote: post #258
xyzzy123 wrote: post #242

Earlier quoted context omitted.

I agree your statement is logically correct from a utilitarian standpoint. There's a little bit of "spherical cow" involved though. A more detailed model would recognise that R&D spend is not pure investment, and UBI would not be pure consumption. Whether non-zero UBI today would good policy or not depends on an enormous number of facts about the world that I think it would be very difficult to come to an agreement o…

I think we mostly agree except on our level of optimism about how UBI will realistically be spent. I would argue that my pessimism is extremely well-founded because present material conditions are an extremely strong (if noisy) indicator of an individual's capital allocation efficiency. If someone is in a position to start a successful business, or engage in productive citizen science, they are overwhelmingly less li…

You make good points here, thanks. It was interesting to think about rate of increase of utility over time, it did throw new light on the idea of UBI for me.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#264

Post by naasking »

space_fountain wrote: post #134
cryptonector wrote: post #127

Earlier quoted context omitted.

Which is in fact what the British did when they ended slavery.

Though to be fair you can make a very compelling argument that that wasn't the most moral choice

Avoiding a civil revolt and the subsequent death count probably undercuts any such claim to morality, if we're using "human suffering" as the metric.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#265

Post by whatshisface »

mensetmanusman wrote: post #259
kingcharles wrote: post #226

When I was in jail, a MAJORITY of the people in there were scamming the COVID handouts. I remember one cellmate who had obtained $25,000 in COVID funding to buy PPE for his non-existent business (he was in jail for something unrelated). The guys in my block all had girls on the outside who would do all the paperwork for them for about 25% cut of whatever they made. The prisoners would feed them all their personal inf…

This needs to be a movie.

Can't be made into a movie until it ends.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#266

Post by wyager »

lmm wrote: post #261
wyager wrote: post #244

Earlier quoted context omitted.

> The whole point of UBI is that it's universal and everyone is a beneficiary. If I get a check for $1,000 every month and I lose $5,000 on taxes every month, I'm not really a beneficiary. This is a wealth redistribution scheme. The wealth is being redistributed from people who are self-evidently efficient capital allocators to people who are self-evidently not. (That's a Bayesian judgement, not an absolute one.) > T…

> This is a wealth redistribution scheme. At first order it is, but at first order virtually any policy involves moving wealth around, and at first order any such thing is zero-sum. > from people who are self-evidently efficient capital allocators to people who are self-evidently not. Given that the biggest factor affecting income is parental class, that seems far from self-evident. More importantly, if we want to en…

> Given that the biggest factor affecting income is parental class

This isn't actually true; it's one possible explanation that seems OK under cursory examination of the evidence, and it's compatible with American university social "science" dogma, but it falls apart under careful inspection. The overwhelmingly more likely (but incompatible with field political dogma) explanation is that income is most strongly mediated by intelligence, which is mostly genetically heritable. This is why people tend to have similar incomes to their parents. (This persists through adoption; try to explain that as a socially mediated effect.)

Now, that said, this has nothing to do with the fact that people who would most benefit from welfare schemes are the least likely to be efficient capital allocators. We can make the observation that they are not allocating efficiently independently from asking why they are not allocating efficiently.

> Putting $1m into a 50-50 chance that will produce $10m of value if it works out but leave you destitute if it doesn't is a positive for society, but irrational at an individual level

The market already efficiently addresses situations like this which actually exist, using schemes like business loans and outside investment. There is no way in hell some financial knob the government can blindly turn would do as good a job at performing this function as banks and investors who are actually making a conscious decision and putting their own money on the line. In other words, for every marginal good bet this scheme enables, it's going to enable 1000 marginal stupid bets.

> (e.g. rich families/friends) tend to be more entrepreneurial

You've made the same (understandable) inversion of causality as before. In reality, the latter tends to drive the former. Obviously the causality is bidirectional to some degree, but I think people tend to vastly underweight the primary direction.

I agree that society could do a better job enabling outsized performers without means to get access to capital, but we already do a pretty good job and there is no way that some simple welfare system would do a better job than the intentional systems we have now.

> Organised society has always meant some level of support for those on the bottom.

This may or may not be true (I'm not much of a historian), but I do know that "some level of support" doesn't mean "far-reaching government welfare infrastructure". It can mean churches, waqfs, and so on.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#267

Post by mlyle »

wyager wrote: post #262
mlyle wrote: post #252

Earlier quoted context omitted.

Even Yang proposed making UBI mutually contradictory with receiving other benefits. > Every extant welfare scheme is a vote buying program which you're now nuking. While some peoples' votes will be bought with welfare money, others will support it because they don't think it's OK to let the poor starve or don't want the poor to riot. E.g. me: I don't receive public assistance. I think welfare programs are necessary (…

Your well-intentioned vote isn't enough to eliminate the system we have now. Getting the welfare schemes we have now in place took both credulous moral voters and the voting blocs who constitute the self-interested recipients of these welfare schemes. The recipients of the current schemes are never going to vote to get rid of the current schemes. They would net fare worse under a more efficient scheme. So who are you…

> They would net fare worse under a more efficient scheme.

If I were such a person, I would prefer UBI cash to welfare with strings.

Are you saying you'd prefer to receive benefits in-kind as e.g. housing assistance instead of cash?

Don't conflate "more economically efficient" with "gives recipients less".

Re: America’s Covid job-saving programme gave most of its cash to the rich

#268

Post by naasking »

abakker wrote: post #253
hogrider wrote: post #143

Earlier quoted context omitted.

Sure, if you agree with socialism for the rich and for the rich only this was great just like 2008.

It is bad to keep citing 2008 money as if it were a handout. Much of the money was paid back with interest, and the government MADE money on those loans. Look up the “maiden lane” loans for an example.

It's bad to keep countering complaints about 2008 as if the balance sheet is all that matters. The ethical complaints aren't about the money, but about the incentives and disincentives for certain behaviour, and the constant preferential treatment for a certain class of people above others. The cited reason for buying the bank debt instead of the home owner debt was "moral hazard", which actually applies to them both, but you don't need to guess which group was exempt from that consideration.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#269

Post by wyager »

mlyle wrote: post #267
wyager wrote: post #262

Earlier quoted context omitted.

Your well-intentioned vote isn't enough to eliminate the system we have now. Getting the welfare schemes we have now in place took both credulous moral voters and the voting blocs who constitute the self-interested recipients of these welfare schemes. The recipients of the current schemes are never going to vote to get rid of the current schemes. They would net fare worse under a more efficient scheme. So who are you…

> They would net fare worse under a more efficient scheme. If I were such a person, I would prefer UBI cash to welfare with strings. Are you saying you'd prefer to receive benefits in-kind as e.g. housing assistance instead of cash? Don't conflate "more economically efficient" with "gives recipients less".

I am very confident that the modal welfare voter would prefer the current system, which was specifically designed to buy their vote, to any system which appeals to utilitarian-minded technocrats and costs within a factor of 2 of the current system.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#270

Post by naasking »

abeppu wrote: post #110

I think the second graph in this story is perhaps answering the 'wrong' question. Yes the richest 20% received the most from these programs. But the top 20% usually receive the most. The rescue plan was not advertised as the dawn of a new era of redistribution. It was an expensive bandaid to try to stabilize a bad situation. It wasn't _trying_ to give more to the poor. I think the right graph would compare rescue pla…

> It was an expensive bandaid to try to stabilize a bad situation. It wasn't _trying_ to give more to the poor.

I think the poor were the only ones feeling the instability, so I don't see how that logic tracks.

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