221 Comments

Cash assistance makes sense if and only if the distortions of coupon government are worse than the political odor of stories about people using benefits to buy iphones, big screen TVs and vacations.

I haven’t convened any focus groups, but I did read Hillbilly Elegy. The belief that takers are living better off assistance than low wage workers can live off of their wages is one of the biggest obstacles to working class political solidarity. Furthermore, the distortions aren’t that big. It’s not as if SNAP benefits are materially larger than the cost of feeding a family.

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SNAP is very close to cash and I agree the fight may not be worth the price. But other voucher programs (Section 8 and a hypothetical child care benefit) are much less cash-like.

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So if Section 8 were funded at 100% and availability of homes were not constrained by zoning and bureaucracy, would you support it as a voucher program? A cash grand or refundable deduction of rent over 30% of income for everybody?

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Housing Benefit in the UK is an income-dependent entitlement to up to 100% of your rent paid. There isn't a fixed amount of funding there, the cost goes up in recession ("automatic stabiliser"). In some cases it gets paid to the landlord to ensure it is only used for rent; otherwise it's paid as cash, but is dependent on your rent.

It definitely pushes rents up given our planning (we don't have "zoning", we have "planning") constraints on housing.

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"The belief that takers are living better off assistance than low wage workers can live off of their wages is one of the biggest obstacles to working class political solidarity."

Interesting point. A good argument for forms of cash assistance that you get whether you work or not, or for wage subsidies like some reformed version of EITC, or a mix of both ("Integrated Cash Assistance," which is what I favor.

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founding

Also makes it more important to ensure that no one faces effective marginal tax rates that are too high (e.g. because benefits phase out faster than income comes in, or nearly as fast).

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For more on Integrated Cash Assistance addressing both Abbot's and Easwaran's points see http://tiny.cc/iCa

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founding

In case anyone's worried about clicking on a URL shortener, the link is to an article Ed Dolan wrote on the Niskanen Center website, and doesn't obviously seem to have stolen my private info or loaded a virus.

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Making benefits universal eliminates envy, but often makes the expense of the benefits prohibitive.

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How factually based is that belief? I wonder if people are just using it as an excuse to justify opposing these policies for other reasons, e.g. racism

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I think moral indignation is much more likely than racism. It is directed at poor white people too.

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I think classism is a big part of it - a lot of non-poor people believe that poor people are morally inferior.

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People like to think their non-poor status is due entirely to their own hard work and don’t like to admit that things outside their control, like the body and family they were born into, played a part.

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Conversely, some people also don’t like to admit that a significant number of people living in poverty are there because of poor decisions, drugs, or other things under their control.

What I found is that people lower on the income scale, i.e. closer socially to people in poverty call mom are more skeptical.

I think it’s people higher up in income, who are a bit naïve as to the root causes of poverty.

Please don’t take this as may not advocating for a strong social welfare system. I just think that we should have our eyes wide open.

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I think there's a bit of truth in this (speaking as someone who was low income for a while but made some "good decisions" and am now middle income), but I also think there are often informational problems and incentives that can make it harder to make good decisions.

If you don't have good models for positive decision-making, you may not have the information to see those decisions as good. Further, I think there are a lot of rational reasons and biases that incentivize making bad decisions. For example, addiction creates a strong non-financial incentive to make "bad decisions."

It's entirely possible for people to respond to the incentives around them in rational ways, act based on their available information, and become poor.

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Fair point.

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founding

Take as a given that they are morally inferior. I actually kinda (not totally) believe it is true. So what? They are people, and people are complicated animals whose behavior is determined by the culture of the community in which they live, genetics, personal preferences, the amount of lead in their home and a whole host of things. I don't want our welfare programs to promote bad behavior, but I hold no illusion that a federally-administered program across a country as large, as populous, as diverse as ours can have any meaningful impact on people's behavior.

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Matt just described an instance of benefits fraud his neighbor engaged in, so it’s hardly unheard of.

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His neighbor?

Matt engaged in it, too, as an accessory!

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He wasn’t the snap recipient if I understand the story correctly.

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Correct. Hence my description of Camel Light-smoking, young bro Matt Y as an "accessory."

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founding

Matt did, though, appear to have committed tax fraud by crossing state lines and "selling" untaxed cigarettes.

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"Food stamps" and "Section 8" have typically been cited by welfare state curmudgeons in my experience, so, it seems doubtful that the risk of reduced political support for the safety net is much of a real reason to oppose shifting to cash benefits when possible.

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I would throw student loans into the mix. College was much cheaper when it was essentially a public good. Allowing 18 year olds to take out an almost limitless amount of cash that they can only use to finance education is one reason universities are in a facilities and administrative arms race to compete for the "free" cash given to students. This further increases cost, and colleges have no reason to lower tuition since government will provide whatever the student and her family cannot afford--and charge her interest for it.

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1000% Providing excellent free / cheap public education, creating a culture that smart kids go public, rich and especially rich dumb kids go private, would do worlds for lowering tuition.

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I think you need the median voter to be an alumnus and/or expect their child to attend someday, to maintain any political support. That’s pretty at odds with public schools catering to smart kids.

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Public assistance for life’s necessities should help the poor pay the market price but not be so widely available that it drives up the market price and then you are just chasing your tail. This has happened with middle class subsidies for college education as well as for housing.

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Then how come this didn’t happen when public universities were so subsidized that they were basically public services, with nominal user fees, instead of something people had to “buy”?

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The number of people going to college increased DRAMATICALLY!

If you going from having ~5% of your population use the subsidies in 1940 to ~40% of the population today. That's 800% increase before Baumol's cost disease or anything else!

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Public university bureaucracies got greedy and bloated and cashed in on the student loan gravy train.

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Here's an attempt to disentangle the reasons for tuition inflation at Harvard: https://www.reddit.com/r/slatestarcodex/comments/gpdqu4/the_finances_of_harvard_university_2004_vs_201920/

Obviously, it's not fully comparable to public schools, but it's still interesting to see just how difficult it is to pinpoint any singular cause for the increases. For example, administrative bloat was surprisingly estimated to be only about 1/6 of the cause.

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I thought it was that state governments, starting in California, relentlessly cut funding to their universities.

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California’s state budget continues to climb so there’s lots of money sloshing around. Apparently higher education is not the priority. And according to an article I read a few yesrs ago, the University of California has nearly one employee for every two students.

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But I’m talking about when tuition costs started going up. I believe it started under Reagan and accelerated dramatically with Prop 13.

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I agree, but it's hard to get the cat back in the bag.

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The incentives would be better if the federal government forced universities to internalize the cost of student aid for their own students. Make them charge the students that don't need aid enough to cover the cost for those that do, and have need-blind admissions. Then schools could charge whatever the market will bear for those that can pay, but would be incentivized to be efficient instead of continually increasing coats because there's a limit to the amount of federally-backed student aid available. If a private school didn't offer enough value to be remain solvent under that system, maybe it should go out of business, leaving only state schools and private schools that offer real value.

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A simpler solution could be to just return to state schools being much less expensive through federal subsidies. There's a decent chunk of states with world class colleges, and even more with really excellent ones (and really they can keep expanding campuses/building new ones, like CA). That way you don't run into weird effects of who you'd give $50k to, and the subsidies to the schools could target, say, tenure track positions and libraries.

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"A simpler solution could be to just return to state schools being much less expensive through federal subsidies." Just let the states subsidize their own schools.

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Yes, if the federal government ended current student aid programs, and instead said every university that participates in any federal program (research grants, etc) has to have need-blind admissions, and cover the full need of the students it chooses to admit out of its own budget, it is clear that some state universities would need increased subsidies.

But I'm sure it's as important whether the increased subsidy comes from the sponsoring state or the federal government. I'm pretty sure that in most states, if the flagship university and pride of the state was facing insolvency, stingy, myopic state legislatures would see the wisdom of funding their state schools properly.

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What I was getting at more was less means-testing, and more just going back to UC Berkeley costing the equivalent of $6k (2021 $$) per year for everything (room, board, living expenses). https://insights.collegeconfidential.com/college-costs-50-years-ago I'd like to think the states would prioritize that, but even in the wealthiest they haven't, so I think it'd have to be federal. https://edpolicyinca.org/publications/californias-education-funding-crisis-explained-12-charts

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When I was college age in Kansas (and I'm not that ancient), KU was open to all Kansas high school graduates in the state and cost $600 per semester, if you could pass your classes. Now it's $11K per year, approximately triple the cost. I think the Federal aid has just made this trend worse, because it lets the states off the hook for funding their public colleges adequately. It's a free rider problem.

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Exactly. And one way to address the free-rider problem is to force schools (or their sponsoring state legislatures) to internalize the cost of tuition increases.

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I don't think the federal government has ever tried, though, to use federal research money as a carrot (or stick depending on your perspective) to give state schools an incentive to keep tuition reasonable for in-state students. A state research university facing the choice between federal research largesse, or not, would have a good case to make why it's legislature should fund tuition more like how California used to.

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"Make them charge the students that don't need aid enough to cover the cost for those that do, and have need-blind admissions. Then schools could charge whatever the market will bear for those that can pay"

So if School A and School B offer equivalent educational opportunities but School A is better at marketing to those who can pay it could charge less, magnifying its advantage over School B? It sounds like the same adverse selection process we see with health insurance.

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Yes, I don't really know where things would shake out if the government required schools to both A) have need-blind admissions and B) charge actuarially sound tuition, i.e., tuition that combined with endowment funding or other sources available to the school is sufficient to cover the cost of educating all the admitted students.

I suspect some second and third tier private schools would go bellyup, but the wealthiest private schools would adjust just fine, and carefully balance their classes to have the right mix of super smart students (for prestige) and well-heeled students (for money).

Most private schools already have a strategy of price segmentation - charging wealthier students more than others for the same product - and that's not bad because otherwise they're leaving money on the table that could be used to fund the education of less wealthy students.

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You mean, the government would ask for a check from the university in the amount equal to the aid provided to the school's students?

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That would be unnecessary paperwork - the school could just collect less from the students needing aid. So basically institutional grants, or tiered pricing, whatever you want to call it. But not an unlimited supply of outside federal student aid money for the school to vacuum up without any discipline on how efficient it is.

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It sounds like a good idea, but what would stop schools from taking more wealthy students who can afford the full sticker price? They are already doing this to some degree with international students.

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They do. I doubt there are enough super smart top students who can afford to pay full price for a school to go too far in that direction though, if it wants to keep a reputation as an elite, highly selective school, instead of just an expensive finishing school for rich dummies.

But yes, maybe there'd need to be some policing of that, like how how insurance companies are policed against the temptation to cherry pick the healthiest customers.

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A number of schools already have need-blind admissions and claim to meet full need for admitted students, but that includes forcing the students to take out federally backed loans.

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I'm curious what this would look like exactly...

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These programs are pure paternalism as Milton Friedman and John Stuart Mill would point out. They are about telling people what they ought to buy rather than allowing them to decide for themselves what they want to buy. On those grounds alone, I find these programs pernicious. You're right, Matt, that WIC is probably the worst. I couldn't imagine shopping as a WIC recipient, looking for those little WIC-approved labels. I suppose you get used to it and enjoy the strawberry yogurt as best you can, but it shouldn't be that way.

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It's worth remembering that paternalism is the explicit purpose of WIC. It's not meant to just help people with their grocery bill, like SNAP; it's meant to foster specific nutritional habits in kids and educate parents about nutrition. I don't think it's very good at that, though.

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You can buy blueberries, you can buy yogurt. But you can't buy blueberry yogurt. The whole WIC thing seems like it was written by someone purposefully trying to make it a pain in the ass.

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Yeah, it seems to me that the "humiliating or demoralizing hardships" Matt writes about are the point. The system is designed to convey a sense of stigma in the way it functions.

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You’ve just written an excellent pitch for an article or, this being 2021, podcast. Where do these seemingly weird requirements come from?

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It started with a paternalistic notion that "poor mothers don't know how to feed their kids", then went through the lobbyist machine where various kinds of food producers wanted to make sure their thing was added.

Couple that with the faux moral panic around "welfare moms buying steak dinner with food stamps", and you find yourself at the government deciding what flavor of yogurt you get.

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Child care certainly is not my area of subject matter expertise, but--on the off chance someone knows more--wouldn't it make sense just to pump money into local school districts so that they could provide child care from a very young age? Obviously public schools are not perfect but they are existing local bureaucracies that cover the entire country, have expertise in taking care of pretty young children (especially in places where pre-K is already offered) as well as expertise in property acquisition, building maintenance, and all the other stuff you'd need to implement a national network of child care providers. If people want to pay to send their children to a fancy, private provider, they could do that instead, but the option of free (or highly affordable) child care would be there for any one who wants it.

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I think this would effectively be the French "creche" model he mentions.

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So if we can just rebrand child care as "freedom care" we're good?

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Patriot School

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Not far off. Interesting historical fact - the creches were part of French policy after World War I to encourage population growth, so that the army could be big enough to defeat the Germans the next time. Also part of this were bounties rewarding large families and looser immigration rules to encourage Eastern Europeans to come to France and to be husbands to the war widows and fathers to future soldiers.

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Well that was a fail

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Childcare is my area of subject matter expertise so I will mention a few issues:

1) Deregulation of childcare/early education is a risky proposition. Matt essentially raises a red herring: a DC regulation that apparently requires infant care to be on the first floor of a facility. (That does seem like a logical safety requirement, if you've ever had to do even a fire drill with a bunch of small children, but leave that be.) Generally, the most expensive requirement, however, has to do with teacher-child ratios. Licensing requirements vary from state to state, but commonly, childcare centers are required to have maybe a 1:4 ratio for infants, 1:7 ratio for two's, maybe 1:10 for 3's and 4's. Because the highest cost in childcare by far is staffing, if you can raise these ratios, it will be cheaper, right? And yet we know that ratios not only impact the safety of children (would you want to be responsible for even four infants for eight hours) but also that healthy adult child relationships are the key to healthy development. What looks good as a business model, might not be good for children.

Secondly, there is a lot of research on the impact of education and training on the performance of early educators. In most centers or family childcare homes, you will have a diverse group of children to nurture and educate. (Honestly, this may not be true of the self-selected group of people on this list who are obviously highly educated and, I'm going to guess, pretty financially secure.) We are not replacing parents but working in partnership with families to help children develop not only academic skills like letter recognition, but social and emotional skills. There's a huge body of research on the development of executive processing skills, supporting children who have experienced trauma, etc. You are not talking about a trivial number of children and families who need skilled support in these areas.

Funding for all this is a mess right now. We do know that childcare is an extremely poorly paid field. We do know that it is very expensive and that access is shaky right now. There are all kinds of issues with the current voucher system, that we could go into. I have not studied the specifics of the current Biden plan. I do know that my professional organization, the National Association for the Education of Young Children, has responded favorably to it: https://www.naeyc.org/resources/blog/statement-american-families-plan.

Anyway, I'm in the process of writing my book, obviously. This is a more complex issue than just dollars and cents.

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"What looks good as a business model, might not be good for children." This make sense only so far as the cost doesn't drive individuals to unregulated providers.

If you have people paying a thousand a month (12k per year), than your total revenue for one person's who can only care for 4 infants is 48k a year. All costs (insurance, building, supervision/paperwork, etc) would have to come out of that and then you pay that employee. This isn't a business model that works at that level without *significant* subsidies that right now aren't really available.

And that's for people who can afford to pay that much for childcare! The majority of people likely can't afford even that. They will seek out other providers who can/will do it much cheaper in in their home with 8-10 kids.

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founding

On the education thing, is there any reason to suppose that highly formally-educated carers do better than non-formally-educated carers on developing the social and emotional skills, supporting children who have experienced trauma, etc?

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Yes, there is a substantial amount of research that correlates higher levels of education of teachers with better outcomes for children. The current research on the complexity of trauma would seem to suggest that at least specialized training would be involved in supporting these children and families. This is one major study on the childcare workforce that emphasizes the importance of education:https://www.nap.edu/catalog/19401/transforming-the-workforce-for-children-birth-through-age-8-a (There is a downloadable PDF available at this site.) This concept is not without controversy within the profession, due to equity concerns, but the bulk of research on Early Ed is suggesting the importance of an educated workforce.

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Truly fascinating, especially for someone who’s child rearing days have passed. We took the au pair/nanny route which lasted till both were in school. I wonder what the Biden plan says about hiring staff.

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There are well-established policies and norms in most states regarding staffing ratios, though not always ideal. These are also supported in federal legislation -- the Child Care Development and Block Grant (CCDBG) which now is where most funding for childcare vouchers derives from has health and safety standards, embedded in it.

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Thank you! I look at child care approaches on a scale of authoritarian to curiosity-encouraging. The latter, obviously, is going to require a lower staffing ratio and have different results. The Headstart I volunteered in for a while was on the authoritarian end. The private daycare I sat in on was way on the other end. None of the providers was well paid , but the latter was very dedicated and invested in staying current with the latest information on early childhood development. Perhaps cash for childcare would allow parents to choose where they want their provider to be on that scale.

That said, it's the most important job there is, and giving parents cash also makes the option of parents having more time with their own children more viable.

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I think it would make a lot of sense to be able to drop school-aged kids off at, say, 7am, and be able to have them stay there -- well looked-after -- until (say) 7pm. So, yes, agreed.

I'm not sure how many schools would be suited to taking care of toddlers. We probably do need dedicated facilities for the little ones.

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Agreed--I don't necessarily envision turning existing schools into child care centers. But if the idea is to solve the supply side problem of too little child care, it seems like an expeditious, politically feasible way to do so would be giving money to school districts so that they also provide child care. In other words, it's not so much "let's turn schools into child care centers" as it is "let's give money to school districts to expand the range of child-related services they provide."

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Yep. Seems it would be a much more efficient way to expand childcare capacity.

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I would support this as long as it came with a guarantee there will be zero homework to do when the kids came home.

Actually, I would then homework altogether anyway.

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"She and I both liked Diet Coke and Camel Lights."

Couldn't encouraging people to form friendships over shared vices be a major social benefit of SNAP over cash gifts?

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My perspective comes from a childhood spent on food stamps, among many other families in the same boat. And, frankly, giving coupons for food and limiting those choices is a good thing. In general, we and the recipients I knew were not well-versed in nutrition, so giving us boring but mostly healthy food was a good thing for us and, especially, our kids. You were also flooded with recipes for cheap, easy meals. In other words, the government was actually doing something personally and directly useful to the poor. I'm enraged every time I hear of cuts, because we absolutely have an obligation to feed our poor families. And yeah, Matt, not thrilled to hear you were contributing to the Repub stereotypes with your cigarette trade.

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It seems like the difference between voucher and public financing is also how complicated or opaque the product is. If I get a cash grant, I can make pretty informed decisions about my food and housing but healthcare is a bureaucratic nightmare.

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I agree - bureaucracies aside, the issue too is the "public financing" category is largely insurance. That's fine as far as it goes, but most (reasonable) folks realize everyone needs heathcare, and it shouldn't cost more because you were unlucky enough to be born with a propensity for higher costs. As a country we're really good at producing cheap, quality food - issue is some people can't afford it, so direct cash subsidies would work just fine.

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I see the distinction more as "people on the private market aren't financing [public financing benefits] through ordinary living expenses either." People across all incomes buy health insurance and college is being paid for through a combination of savings, grants, and loans.

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I think this commentary elides the fact that a lot of people and politicians don't view the point of the welfare state as improving the general Utility of the population. Instead, it is intended to avoid specific privations (e.g. "healthcare is a human right" "no one should go hungry in the richest country on earth").

In that context, even an inefficient program that addresses specific needs is better than a more efficient program that leaves those needs potentially unaddressed. If you replaced SNAP with cash assistance, it seems highly likely that more people would go hungry even though the aggregate benefit to the populations is higher. Is that a good thing or a bad thing? I tend to think it's good, but I think there would be significant variance in people's responses.

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I know I'm going to regret this, but here goes.

It seems to me that direct public provision and/or tied public subsidies are only preferable to unrestricted cash grants when there's either some sort of market failure or else a positive externality associated with consumption of the good. It's clear enough why health care and education qualify on those grounds, but I don't think housing does.

One of the arguments for YIMBY is that middle-class urbanites aren't the only ones who need it; you can't have additional public housing without relaxing land-use rules. But a different argument for YIMBY is that there are positive spillover effects when highly skilled people live in close proximity. I doubt that aggregating poor people produces positive externalities and it may produce some negative ones (which has been an argument for preferring Section 8 to government-owned housing projects).

So wouldn't it be correct to say that targeted assistance for the housing costs of poor people living in dense urban areas is an *especially* bad alternative to cash aid with no strings attached, and that building public housing in those areas is the worst alternative of all?

In a future YIMBY utopia market forces will exclude the poor from central cities. They'll still get support from government but it will be monetized and if they work in the city center, they'll be spending the aid on transportation.

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founding

Don't the Singaporean and Viennese public housing models avoid some of these problems? If "public housing" goes way up the income scale, then it doesn't produce the concentrated poverty.

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That's true but (to be blunt) there is still a problem. When you put a building full of low-skilled people in a dense urban location where you could have put a building full of high-skilled people, you lose the synergies that aggregating high-skilled people would have created.

So targeted policies to house low-income people in urban centers are especially distortionary: much more so than SNAP limiting what people can buy with their benefits. That's because in addition to restricting the consumer sovereignty of the poor, you're also denying urban residence to non-poor people who could make better use of the network opportunities that cities provide.

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founding

My understanding of the Singapore model (which is very incomplete) is that the "public housing" is a big building with different levels of subsidy for purchase on different floors, so that you get a bunch of middle class and upper middle class people as well as poor people. So you get some aggregation of high-skilled people, and also some of the social benefits of low-skilled people living near high-skilled people rather than in concentrated poverty.

I think they also have racial set-asides so that you get enforced diversity.

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It's quite possible that the social harms from "concentrated (i.e., homogeneous) poverty" are just as serious in low-density areas as in high-density ones. I hadn't thought of that possibility but rural America's problems suggest it may be true.

My argument really leans more on the positive externalities, though. If you have mixed-income housing where the market would dictate uniformly high-income developments, you're still sacrificing those to a certain extent and you're not even giving the beneficiaries what they would most prefer from a given level of expenditure.

Matt will never comment on this thread because he's already dealing with people who say YIMBY is a horrible neoliberal plot. It wouldn't be helpful for any prominent YIMBY advocates to take a line of "Let's evict the poors from expensive neighborhoods for their own good, because Pareto efficiency". But I think it's still broadly the correct policy.

The point of Matt's piece is that there's really no tradeoff here. You can lean into a Nietzschean approach to urbanism (pack all the top people together for more innovation) while still running a highly redistributive welfare state. You just have to rely on some form of UBI or unconditional cash transfer to make it work properly.

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"I know I'm going to regret this, but here goes."

See? Even the non-poor make unwise choices.

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If you only knew

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Right -- if imprudent comments on the web was the extent of my self-destructive behavior, I'd be a much healthier person.

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"In a future YIMBY utopia market forces will exclude the poor from central cities."

Is that true? I thought the appeal was that people would have broad flexibility to choose where they want to live. This is my understanding of the "housing abundance" framework that Matt laid out in a previous post. It seems like our current model is what's excluding the poor from central cities.

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An optimal urban housing policy would tend to push the affordability of low-income units in opposite directions. On the one hand land-use deregulation will increase supply and make housing at every quality level cheaper than it otherwise would be. But if you also abolished rent control and affordability mandates on new construction, the net benefits of YIMBY would flow disproportionately to affluent occupants of market-rate units. I don't know what the net effect would be but even if it pushed central-city rents higher, that would be okay if you then used the tax and transfer system to redistribute gains to the poor.

Getting the politics right would be very, very tricky but just as a spitball, think of it like this. Suppose you want to improve the quality of life for 1000 people who live in a public housing project in East Harlem. The first step would be to sell the land under the project to developers who want to knock it down and replace it with luxury real estate. With the money NYCHA raised from the sale it could buy land in Westchester County and build a new project with 2000 units of similar size and quality. You could give half the units to current tenants--I mean give them outright, so they became homeowners--and the other half to people on the NYCHA waiting list. Then you'd take some of the remaining profit and give it to the new condo owners in cash, to cover their commuting expenses on MetroNorth and compensate for the lost leisure time entailed by a longer commute.

I don't know if the numbers would work but this is just for illustration's sake. When the government assists poor people by giving them something rich people are willing to pay through the nose for, like a residence in Manhattan, there's money being left on the table. You can actually spend less by offering the poor an option they would prefer.

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That example makes sense but it's assuming a constraint (highly valuable underutilized land in East Harlem) that theoretically shouldn't exist in a YIMBY-optimal world of housing abundance. Rich people aren't paying through the nose for real estate because they like blowing all of their money on housing, they're doing it because there isn't enough real estate in Manhattan to satisfy demand. So you either pay through the nose to live there or pay less and make some unfortunate trade off (longer commute time or whatever).

Presumably some mix of people across all incomes would prefer to live in center cities, some would like to live in suburbs, some would like to live on a dude ranch, etc. In a market without supply constraints (the idea is that) anyone could find housing at a price point they can afford in an area they want to live in.

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Matt will know better than me but I think there is *some* natural constraint on the availability of cheap housing in Manhattan, even after you get rid of unnecessary restrictions on building it. You can't make the buildings infinitely tall, and an increase in supply will be partly absorbed by more middle-class people moving in.

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Rent control doesn't favor poor people, it favors incumbent people. Lots of people who have rent control are relatively well off -- perhaps from the start, or perhaps after they have had rent control for decades.

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This reads more like a case against poorly designed coupon government rather than coupon government in general. Obviously the government shouldn't be choosing which flavor of yogurt you can buy. But the idea that the government should use its leverage as some people's primary food buyer to promote healthy choices seems like a good thing to me. And it would be if people like Matt didn't help people break the rules. You could flood the program with massive amounts of fresh fruits and vegetables and little else as an extreme example. And I bet most people on the program would end up eating more fruits and vegetables. If instead you gave everyone the equivalent in cash, I'd bet even more that people would eat very little fruit and veg and lots more cigarettes and soda.

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author

What you are advocating is closer to an in-kind program. Like we could send everyone a CSA box with fresh fruits and vegetables and that might make sense as a nutrition program.

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That was actually my first draft but I scrapped it because I wasn’t sure if CSA was widely known. But yes

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It's almost certain they won't buy more fruits and vegetables. These are comparatively expensive, take more experience and resources to prepare, and frankly are not as tasty for a group for whom eating is one of the few reliable sources of pleasure.

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And while there is some value is consuming more fruits and vegetables, the ratio of marginal benefit to marginal cost for poor people is pretty large. The truth is most (not all) of the benefit comes from preventing the consumption of food that is either very salty or calorie dense. Most of that benefit can be realized by eating less of the latter without substituting the former - a much better cost-benefit trade-off. Why don't poor people do that? As you said, eating is one of the few reliable sources of pleasure and is probably better than the alternatives of drugs, cigarettes, alcohol, etc.

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These are good points. Another factor is that the biggest benefits of healthy eating (ie, not getting diabetes, liver disease, blocked arteries etc) are most salient later in life, and poverty necessarily reduces people's planning horizons.

It's understandable that people wouldn't focus on their possibility of stroke in two or three decades' time if they are struggling to feed themselves or their families *today*.

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I recall from Matt’s Slate days he said something like people are not poor because of bad decisions but they make bad decisions because they are poor.

Matt seems to be advocating what you might call a “libertarian” welfare state where you get cash and the opportunity to make “good” decisions - although he muddles the argument by calling for direct provision of services such as daycare. If government attempts at providing targeted aid turn out to be bureaucratic and illogical, what is the source of confidence that the government can directly provide the service in a competent and efficient manor?

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founding

Wealthy people also make a lot of bad choices. I dislike the paternalistic approach to tying assistance to specific decisions. The recipients are people, with individual agency and they deserve the same respect as any other citizen of our country.

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Yeah, someone is buying those NFTs, and it isn't poor folks.

There are good and bad reasons to have UBI, but I think most left and right agree that micromanaging the decisions of poor people as some sort of punishment for being not born into a trust fund isn't terribly productive.

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I agree with this 100%. People who aren't low-income eat crappy food and blow money on BS all the time - it's just human. There's too much energy wrapped up in trying to get people to exhibit some abstract conception of virtue.

Someone I know used to say "being poor is expensive" - sometimes people just need more money. And, frankly, if they spend it on diet cokes, big deal.

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But if the recipients do make “bad” decisions and need even more help, do we provide it, or say “too bad, you had your chance”?

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I think we provide it b/c (a) people make mistakes; and (b) who are we to make granular decisions about people's lives? We are fallible too. We aren't suffering by helping people

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I see and sympathize with your point, but I admit it also makes my head spin a little, because my reaction makes me sound like some kind of right-wing nut. How far politics have come in the past several years.

If a person is a responsible contributing adult, with a job and family responsibilities, then cash aid (effectively reverse taxation) from the government for broadly defined social purposes is the right thing. It recognizes that person's responsible membership in and contribution to society, at whatever level they can manage. This is a good in itself.

If a person is a charity case, by being unable to take care of themselves in society, then we ought to help them, but also to apply conditions. We do this for adult children inheriting trust funds, and people who have broken the law - at what point do we do this for people who can't minimally function as responsible citizens. To hold a job, or spend money responsibly, or raise their children with care, or take care of their own health, or stay out of the clutches of the law?

Dependency sucks. Getting loose of the conditions should be a motivation for people to use the help to become a person who is not an object of that kind of helping, but rather is a citizen who helps others. People do that every day when they get the chance.

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We used to do this in the 19th & 20th Century up till the start of a federally supported welfare system between the late 30’s &, in some states, the late 50’s. It’s generally a bad idea because the people who ran the system were largely interested in being busybodies and in not spending money.

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All too often the conditions act as a hindrance more than a motivator. Matt gave the example of section 8 vouchers not giving recipients the option of prudently living in a cheaper residence to save money to finance a future move to a higher wage area.

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"Too bad" is not likely, because we didn't say it the first time, before the bad decisions were made.

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I understand what you're saying, but a wealthy person's bad choice means your stock portfolio goes down. A poor person's bad choice can mean you lose your kids. You have to look at what people started with. If it wasn't much in terms of housing security, good parenting, a safe neighborhood, etc., then you are expecting too much of your fellow human to think she can overcome it without guidance.

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I think that really assumes that how much money someone has is an indicator of their intelligence or responsibility. There's not really any evidence of that but there's plenty of evidence that circumstances largely dictate outcomes.

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Crazy idea... rich progressives want to give people cash. Republicans don't. Why don't we have more non-profit entities set up to provide the service of transferring cash from wealthy elites who want to help people to the people who need it? I mean, there are foodbanks, Habitat for Humanity, things like that... I've seen micro-lending non-profits but they are primarily outside of the US in developing nations. What am I missing, why is this a terrible idea?

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I think you're suggesting something like this: https://www.givedirectly.org/covid-19/us/

And I 100% agree with you. Not sure why everyone is so negative about the idea.

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This is awesome. Just donated. Thanks!

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I was going to mention:

I: I see various discussions in progressive spaces about what charities are most efficient. I remember Give Directly offering hurricane relief ( https://www.vox.com/the-big-idea/2017/11/8/16480166/givedirectly-houston-cash-relief-hurricane). But in general there's a preference for charities which are working towards social change rather than giving directly (within the US). Because

II: It's hard to finance a social safety net with charitable giving (total charitable giving was $450B in 2019, Federal spending on means-tested programs was $588B in 2012 (the last year I could find)).

III: Charitable giving will often be less predictable for the recipient. In the OP Matt talked about the problem of, "You can’t be frugal and save in order to finance a move to West Texas where you heard there are lots of good-paying jobs. " If you get support from a charity it's less likely that you can keep the support while moving to Texas than it would be if you were enrolled in a Federal program.

Charitable programs have advantages, of course! They are often more accessible than Federal programs, but I think of them as having different strengths and benefits and being a compliment rather than a replacement.

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Ah, I see you know about givedirectly already (I just shared a link to it above). Since a lot of us probably knew already that these charities exist, we may have wrongly assumed that what was being proposed was some change in the system.

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The other way to think about it is apply the logic to your town. “I don’t want to pay taxes to educate other people’s kids. If people think education is important they can donate to the school system.”

I assume you see how flawed that would be in practice.

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The conservative case for education and police is how those things benefit themselves conservatives personally. Conservatives favor education because people will pay make more and pay more taxes. Police I personally don’t want to be robbed outside of my gated community. The white papers on how how a welfare state benefits rich/conservatives are real but flimsy new and hard to easily understand.

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Rich progressives are interested in spending other people’s money, not (just) their own.

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Ding ding ding—they don’t care as much about helping people as they do making other people do the same.

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founding

Because making everyone help a little bit does a lot more than myself doing a lot!

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So they don’t care as much about helping people as they care about helping people more, via collective action?

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All I'm saying is a lot of time and money are poured into politics on the longshot that we can implement massive government program overhauls that might be more effectively used if we just "gave directly." Emphasis on "might"- this was meant to be a thought experiment.

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It becomes a collective action/ free rider problem. Nonetheless it's how I feel about giving generously to Planned Parenthood. I'm happy to pay for abortions for those women who want one and can't afford it without wasted effort debating the ethical underpinnings of the Hyde Amendment. I am also somewhat sympathetic to paying for women to travel to states without excessive abortion restrictions rather than quixotically fighting through the courts.

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Why not defund the police and if rich republicans think it’s a big deal they can donate as much as they’d like.

I don’t know why they don’t advocate for that? What am I missing?

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I will have to make the conservative case for no charity. America is different in that we don’t really owe anything to each other, other than that what you owe another human. If you take that metric the international standard for poor is $2 a day. The number of Americans below that number is really low. Panhandling $60 a month isn’t hard. So as long as you make $60 a month you are not internationally poor. What Shaun Hanity does is compare poor Americans to poor Africans and will say

“look they have running water!” The richest man in the village doesn’t have running water!”

“look the homeless guy got free burger with more calories than the family in Africa gets in a week.”

“That African family would love to immigrate to the USA and pan handle for a burger.”

Those objective absolute standards are true but they miss out that poor is a relative term more than absolute one.

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Free rider problem is the obvious answer to your question.

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I definitely agree that free riding is a problem, but I'd like your insight on a challenge what appears to be an increasing idea in current progressive politics.

There seems to me to be a major tension between "defunding police" or the similar "making things a civil violation instead of a criminal act" with the reality that all state requirements are enforced with violence.

If you don't do what the state requires, some enforcement agency is going to show up and either enforce it with a gun or take stuff away from you at the point of a gun.

If you require people to pay taxes/fees to fund government programs, you are essentially pointing a gun at them and requiring that they pay. How do you see that tension playing out?

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I don’t think there is any tension. For most people, if they owe back taxes, child support, defaulted on a loan, etc. We don’t send an armed goon to break your kneecaps. The government sends a nice letter to your employer and says, “Please withhold and forward us $x form John’s paycheck.”

And now that you mention it tax withholding (and garnishment) is another example. We could not withhold and make people write a check for the amount owed on April 15. But many people would get behind and not have the money and if they couldn’t garnish wages then you’d have to have some team rounding people up and making them pay. And we’d have all kinds of stories of gun fights and suicides and out of control revenue agents and it would be a mess. Or we can just withhold.

At least to me, the general idea of defund is to ask, is this really the best way? Do we really need 10 cops in a given area with radar guns pulling people over for speeding or can we just use speed cameras and maybe have 3 cops patrolling the roads. There will certainly be people who don’t pay their tickets and can’t be garnished and they will have to be pulled over and arrested by people with guns. But that’s way easier and cheaper less likely to be biased etc. than what we are doing now.

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How is that any different than UBI?

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It’s not. But if you object to one you should notice the obvious flaws in the other.

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Paying taxes to fund UBI would be mandatory. Donating money to a charity is optional. People worried about freeloaders do not have to donate; people who are not worried can donate.

Anyway I don’t actually think this is feasible, I mostly am wondering why liberals don’t invest more money and energy into generous cash based charities IN ADDITION to advocating a more rigorous welfare state.

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And not freeloaders - free riders. The people in your town who, in the absence or property taxes, would choose not to donate to the schools, fire department and police.

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I’m not advocating for eliminating property taxes or public services.

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If you want to know why they don't I've already told you. The free rider problem. The same that would occur in your town if they abolished property taxes and allowed people to donate to the police, fire department and schools at their discretion.

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Rich people seem to be very willing to (lavishly) fund charter schools for poor disadvantaged kids. Whether they could fund all the charter schools in the whole country is another matter.

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I should add, Republicans don't want to expand the size of government, especially the federal government. They are generally supportive of private charities, especially faith-based ones. Obviously this wouldn't qualify as a safety net; too many holes. But we could be doing more without having to do the Slow Boring of convincing the majority of the nation to vote for it; let's just go do it.

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There is no shortage of charities in the United States, or people donating to charity. At the end of the day, philanthropy - while important - can never be broad-based enough or raise enough money to truly tackle something like the childcare gap or childhood poverty.

Imagine Social Security never existed; we'd have plenty of charities to help struggling elders (we already do!) but wouldn't be able to functionally eliminate the problem of basically elders dying impoverished in the street the way Social Security did.

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You all are confused about what she is suggesting. She is *not* suggesting getting rid of government programs. She is not suggesting privatizing Medicare, the police, social security. She is just saying that there are all kinds of charities, but so few just give people money. Why couldn't there be a charity like GoFundMe - where you just give people money? That's all. Simply giving money to poor people has been shown in studies to work extremely effectively.

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Let's not forget that Section 8 vouchers promote housing discrimination; many landlords will not accept them. All landlords accept cash.

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I believe that once an apartment is rented to a Section 8 tenant, it becomes a Section 8 unit, and it is hard for the landlord to get it back to rent to market-rate tenants. Maybe if it were converted into a pure cash/voucher program, you would have more landlords willing to accept those tenants.

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That's not true.* Section 8 tenants enter into an ordinary lease agreement with the landlord and the landlord then enters into a separate contract with the local housing authority (called a housing assistance payment, or HAP, contract) which lays out the terms by which the landlord gets paid. Generally, the HAP contracts require the LL to maintain the property at a higher standard than they would otherwise be required to by state/local law, but the LL is also getting guaranteed market rate rent payments. But the LL is not locked in to anything outside of these contracts.

The general (non-prejudiced) reasons that LLs give for refusing to participate in S8 are usually the administrative burden of participating, the costs associated with meeting habitability requirements, and the fact that "market rate" payments may not in fact be market rate. This latter issue was addressed in the late Obama years under something known as the "small area fair market rents" rule which then got sidetracked in the Trump years but I think is now mostly in effect.

*Note that this describes the "housing choice voucher" program, which is what most people know as Section 8. There is a "project-based voucher" program and a "project-based rental assistance" rental program (technically two different programs, don't ask) wherein a private owner effectively dedicates certain units as Section 8, but that's a smaller subset of the overall program. And no one landlord is forced to "project base" their unit by accepting an HCV participant.

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Interesting. My understanding may be outdated, or just confused. However: does the tenant have the right to renew the lease indefinitely unless evicted for cause? Does the HAP agreement terminate by definition when the lease terminates, or does it remain in force for an unrelated period? Can a landlord, when a HAP agreement term is over, decide not to sign a follow-on agreement and make the existing tenant pay full rent or leave? If the answer to any of these questions is "no", then the landlord is going to have a hard time getting to the place where they can rent to a market-rate tenant.

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The only constraint is that the lease has to be a minimum of 12 months, but the tenant or LL can decide not to renew at will. The HAP contract is always coextensive with the lease term.

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Thanks.

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Absolutely.

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A landlord cannot refuse a Section 8 tenant, that's illegal discrimination. Could a landlord try to do so in practice? Sure, but a prospective tenant doesn't have to disclose that they're on Section 8 until they get to the application process, so there's a lot more of a paper trail to bust them with. In practice, I can tell you that this is a priority enforcement issue in wealthy blue states. Regulators actively prosecute these cases, do crazy things to investigate them like go undercover and pretend to apply for apartments with a voucher, have a team that scans local housing ads for discriminatory language ('no Section 8'), etc.

Experienced landlords know that Section 8 is far preferably to renting to low-income but not on Section 8. The tenants can lose their voucher for non-payment of rent or illegal activity out of the apartment (selling drugs, etc.), so they're generally much more well-behaved

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Good to know! I was recalling from my own apartment hunting days 15 years ago, “no Section 8” seemed prevalent in listings.

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Oh great. There goes my plan to simplify the holidays by giving Substack coupons.

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founding

You should be careful - they might subscribe themselves to harmful Substacks. Better make sure the coupons are targeted to good Substacks only.

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Slow Boring: the CSA of Substacks. Nothing but kale and parsnips, weeks on end.

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I'm not super knowledgeable about the details, but I think that's what happened on the way to Bolsa Familia in Brazil. There were all these voucher programs that were collapsed in this simpler program to send people cash.

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I don’t have strong feelings about the child care coupons but I concur that it’s not a good idea to have conceptual arguments about SNAP. It’s pretty politically popular and efforts to cut benefits have been less successful than efforts to expand them, I think in part because ag interests like seeing money targeted at food. I do not trust that a means tested cash benefit would be as popular.

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"Now, again, if the city wants to create a public child care center with a low staff ratio and everyone has a certain certificate and it’s on the ground floor of a building somewhere, that seems great to me. A public option can put pressure on the private sector to raise its game. But the point is we actually need to increase the supply of good child care, not keep squeezing the sector with regulations so that kids leak out into unregulated arrangements."

Great point!!

One of the thins I agree on with US conservatives is that there are too many regulations raising the cost of healthcare in the US. Back where I come from, private healthcare is much more lightly regulated. The government doesn't need to make sure that private hospitals won't collude to raise prices, because in that case citizens will just go to public hospitals. Here you have all shorts of weird regulations like mandating the percentage that insurance companies have to pay for claims etc.

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