I do think it's worth pointing out one among many cases in which services are better than cash: Addicts may use the cash for harm. Though a small proportion of the beneficiaries, I do think it's worth keeping in mind.
In many US urban areas, rents eat up every spare marginal dollar available poor people have. If a poor family has an extra $300 a month they can only spend on food, they're going to spend it on more and higher-quality food. If they can spend it on anything, their landlord will raise the rent 300 bucks.
Building more housing would be the real solution to this problem, but given the political economy of American cities (and the various supply chain shortages making homebuilding inordinately expensive where it is legal) giving people constrained cash might make them better off in the short run.
Maybe just make SNAP also work for all consumer staple goods.
" So in metro areas where the housing supply is constrained by zoning, some of the impacts of the vouchers is to push up rent and create windfalls for landlords."
By creating price floors. In most housing supply constrained areas, landlords do not rent to Section 8 voucher holders because they do not enjoy dealing with all the requirements and potential pitfalls of renting to a Section 8 holder.
Re: childcare, we could start with loosening up the regulations a little bit. If you require day cares to be on the ground floor, to have 35 sq ft of space per child, etc., poor people are obviously going to be priced out. Cost of daycare is at least in part an issue where one arm of government (the regulatory state) has created a problem that must then be solved by another arm of government (the welfare state).
Even worse is when a government makes no money available at all -- neither vouchers nor cash -- but makes a private provider pay instead. That is rent control. Sort of like instead of providing food stamps, making grocery stores charge 1980s prices for anyone who has shopped there since the 1980s. It's just governments being cheap and creating a crazy situation instead of coming up with money to help people.
Substack feature request: have a link toggle between number and footnote. That way you can toggle to note and back to the sentence. Like Kindle ereader
You are correct. I realized that I read the articles in the email and not the website. Not sure if the former is feasible but yes the latter works. Thanks
Substack feature request: have a link toggle between number and footnote. That way you can toggle to note and back to the sentence. Like Kindle ereader
The coupon system is obviously less efficient overall. But as a devils advocate argument, there are some families, with adults who would spend cash on drugs instead of their kids or housing. Any switch to more cash-based programs, would also require a more robust social services system to identify these kids. And obviously there would have to be some sort of process swap procedures to mitigate the risk.
Perhaps the default would be cash assistance, with a process that would allow social workers to switch that families benefits to a more direct voucher type system if needed.
Coupon programs avoid zero-sum bidding wars by focusing benefits on commodities.
If you take families who are struggling to afford food and child care, and give them an unrestricted cash benefit, many of them will want to use it to move to a nicer place. They'll end up bidding up the price of real estate, and still struggle to afford food and child care.
This might be a perfectly reasonable decision for a family to make – a better housing situation is often worth leaving the kids with grandma – but at a society-wide scale, everyone is competing against each other and nobody benefits.
Housing is an obvious example, but I don't think this is specific to housing. Money is fungible, and cash benefits are always going to get swallowed up by whatever has the least elastic supply.
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.
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.
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.
What criteria should we use to evaluate when it is better to have universal instead of means-tested benefits? K-12 and libraries are great and generally loved. Medicare and Social Security are very popular (and Social Security benefits are much more progressive than most people seem to realize).
What is the loss in value from a SNAP coupon vs cash? I understand the distortion but if it's easy to use (debit card), relatively unrestricted (unlike WIC), and since food is a fixed, universal expenditure it seems like the distortion for SNAP in general may be small. I understand the argument but I would like to see the loss of utility quantified if possible. Is it worth the cost of nudging the poor to better dietary choices? Does it effectively nudge people to better choices? Are there other uses for the SNAP card platform that could be innovated?
I do think it's worth pointing out one among many cases in which services are better than cash: Addicts may use the cash for harm. Though a small proportion of the beneficiaries, I do think it's worth keeping in mind.
In many US urban areas, rents eat up every spare marginal dollar available poor people have. If a poor family has an extra $300 a month they can only spend on food, they're going to spend it on more and higher-quality food. If they can spend it on anything, their landlord will raise the rent 300 bucks.
Building more housing would be the real solution to this problem, but given the political economy of American cities (and the various supply chain shortages making homebuilding inordinately expensive where it is legal) giving people constrained cash might make them better off in the short run.
Maybe just make SNAP also work for all consumer staple goods.
" So in metro areas where the housing supply is constrained by zoning, some of the impacts of the vouchers is to push up rent and create windfalls for landlords."
By creating price floors. In most housing supply constrained areas, landlords do not rent to Section 8 voucher holders because they do not enjoy dealing with all the requirements and potential pitfalls of renting to a Section 8 holder.
Re: childcare, we could start with loosening up the regulations a little bit. If you require day cares to be on the ground floor, to have 35 sq ft of space per child, etc., poor people are obviously going to be priced out. Cost of daycare is at least in part an issue where one arm of government (the regulatory state) has created a problem that must then be solved by another arm of government (the welfare state).
Even worse is when a government makes no money available at all -- neither vouchers nor cash -- but makes a private provider pay instead. That is rent control. Sort of like instead of providing food stamps, making grocery stores charge 1980s prices for anyone who has shopped there since the 1980s. It's just governments being cheap and creating a crazy situation instead of coming up with money to help people.
Thoughts on Matthew Desmond advocating for a universal housing voucher in his book Evicted?
Substack feature request: have a link toggle between number and footnote. That way you can toggle to note and back to the sentence. Like Kindle ereader
It does, I think! At least in my phone browser.
The back button should take you back from the footnote to where you came from
You are correct. I realized that I read the articles in the email and not the website. Not sure if the former is feasible but yes the latter works. Thanks
I love reading the email
Substack feature request: have a link toggle between number and footnote. That way you can toggle to note and back to the sentence. Like Kindle ereader
The coupon system is obviously less efficient overall. But as a devils advocate argument, there are some families, with adults who would spend cash on drugs instead of their kids or housing. Any switch to more cash-based programs, would also require a more robust social services system to identify these kids. And obviously there would have to be some sort of process swap procedures to mitigate the risk.
Perhaps the default would be cash assistance, with a process that would allow social workers to switch that families benefits to a more direct voucher type system if needed.
Coupon programs avoid zero-sum bidding wars by focusing benefits on commodities.
If you take families who are struggling to afford food and child care, and give them an unrestricted cash benefit, many of them will want to use it to move to a nicer place. They'll end up bidding up the price of real estate, and still struggle to afford food and child care.
This might be a perfectly reasonable decision for a family to make – a better housing situation is often worth leaving the kids with grandma – but at a society-wide scale, everyone is competing against each other and nobody benefits.
Housing is an obvious example, but I don't think this is specific to housing. Money is fungible, and cash benefits are always going to get swallowed up by whatever has the least elastic supply.
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.
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.
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.
What criteria should we use to evaluate when it is better to have universal instead of means-tested benefits? K-12 and libraries are great and generally loved. Medicare and Social Security are very popular (and Social Security benefits are much more progressive than most people seem to realize).
"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?
What is the loss in value from a SNAP coupon vs cash? I understand the distortion but if it's easy to use (debit card), relatively unrestricted (unlike WIC), and since food is a fixed, universal expenditure it seems like the distortion for SNAP in general may be small. I understand the argument but I would like to see the loss of utility quantified if possible. Is it worth the cost of nudging the poor to better dietary choices? Does it effectively nudge people to better choices? Are there other uses for the SNAP card platform that could be innovated?