Giving people money helped less than I thought it would(theargumentmag.com)
theargumentmag.com
Giving people money helped less than I thought it would
https://www.theargumentmag.com/p/giving-people-money-helped-less-than
110 comments
The problem is that cash windfalls don't build wealth. You need consistent income to do much of anything in this world that matters that can be traced, tracked, expressed in credit reports and used to back loans for serious purchases like cars and homes.
If you simply gave young people $100k - which is a number nobody is seriously throwing around - what do you think they would materially gain from it? Very little. Their ability to purchase a home is still income-based and far more than a $100k windfall in many parts of the US can sustain for much time at all and everything else is just a slow bleed.
If you simply gave young people $100k - which is a number nobody is seriously throwing around - what do you think they would materially gain from it? Very little. Their ability to purchase a home is still income-based and far more than a $100k windfall in many parts of the US can sustain for much time at all and everything else is just a slow bleed.
> what do you think [young people] would materially gain from [$100k]? Very little.
Little? It would remove most of the obstacles in their life: Move away from shitty parents or neighborhoods. Allow Finish their studies without having to hold a job at the same time. Allow a decent job search. Rent near work. Become the foundation for long term investing. Have a decent minimal-breakdowns car if useful where they live/work. Have a safety reserve in case shit happens. After a little time building a credit record, become the down payment for their home (if that's worthwhile on their trajectory), etc, etc.
I would argue though that $100k may not by itself achieve much if - in general - lack of good example, lack of good counsel, presence of terrible "friends", mental illness, etc.
In spite of some views on HN, "normal job" is still the way to a comfortable life for most.
Little? It would remove most of the obstacles in their life: Move away from shitty parents or neighborhoods. Allow Finish their studies without having to hold a job at the same time. Allow a decent job search. Rent near work. Become the foundation for long term investing. Have a decent minimal-breakdowns car if useful where they live/work. Have a safety reserve in case shit happens. After a little time building a credit record, become the down payment for their home (if that's worthwhile on their trajectory), etc, etc.
I would argue though that $100k may not by itself achieve much if - in general - lack of good example, lack of good counsel, presence of terrible "friends", mental illness, etc.
In spite of some views on HN, "normal job" is still the way to a comfortable life for most.
> ...what do you think they would materially gain from it?
$100K at age 20 can become $1.6M by age 60, per the rule of 72, if invested in a diversified stock index with 7% total return. At age 60, the 4% safe-withdrawal rule says that $1.6M might provide $64K/year indefinitely.
So, they could gain a hell of a lot from $100K when young. The trick is saving/investing/time.
$100K at age 20 can become $1.6M by age 60, per the rule of 72, if invested in a diversified stock index with 7% total return. At age 60, the 4% safe-withdrawal rule says that $1.6M might provide $64K/year indefinitely.
So, they could gain a hell of a lot from $100K when young. The trick is saving/investing/time.
1.6m in 40 years probably won’t move the needle much more than 100k does today. Besides that, we’re not trying to solve peoples distant retirements we’re trying to solve peoples lives today , or that’s how I interpret the article
100K at 7% (market rate adjusted for inflation) is 1.6M after 40 years, so that would be 1.6M in today's buying power. Pretty good by the vast majority of peoples' standards.
What happens to stock market when everyone is given 100k to invest? The inflation adjustment is likely understated as you’re basing on historical factors and this is large macro shock to the system that needs to be adjusted for as well.
I also still don’t think this helps most people during the bulk of their lives. Most people in this cohort don’t save now, having knowledge of a more secure retirement wouldn’t change much for them. It’s not like they can turn off 401k contributions and have extra pocket money today.
I also still don’t think this helps most people during the bulk of their lives. Most people in this cohort don’t save now, having knowledge of a more secure retirement wouldn’t change much for them. It’s not like they can turn off 401k contributions and have extra pocket money today.
† Of course, that is assuming over the 40 years that politician and corporations don't try to screw people out of their investments.
This is exactly the wrong thing for a 20yr old to do with 100k. (Assuming they have no other assets)
When I was 20 I needed a reliable car (having an unreliable car subjected me to periodic unplanned multi thousand dollar shocks), buying books for school (individual stem textbooks cost a couple hundred bucks)
Yes I should have started an investment account but given my other finances I should have been putting in modest amounts every month, but frankly when daily life is costing more than you make it doesn’t make sense to earn 8% while incurring debt that costs 15%.
I’d say the trick is stability. The uncertainties of young life with no money cause things to cost more than they should.
If my children had a $100K windfall this is precisely what I would tell them to do assuming they had an emergency fund and no debt. If not, I would tell them to create an emergency fund, pay off reasonable debt, and then to invest the rest for 40 years.
Read and internalize https://www.bogleheads.org/wiki/Prioritizing_investments. It is simple. It is immensely useful.
Read and internalize https://www.bogleheads.org/wiki/Prioritizing_investments. It is simple. It is immensely useful.
So for 44 years of their life it won't help them at all.
Personal anecdote: when I was 10 or so, a relative passed away and all children in the family inherited around 20k each. It was put into a fund. I think I got full authority over my share at 16 or so. It always felt like I was rich — that was a lot of money for a child to “own“. I have never touched it to this day, only ever adding savings to it, but it gave me a lot of peace of mind to know that I could, if I ever needed to. So, ultimately, it wouldn’t have mattered if I ever had it, or it was just a made up number on some paper; I am certain it fundamentally influenced my life in very positive ways.
Another trait about money that I inherited is all generations in my family since and including my grandparents never had any debt. Being in debt even just for a short period would totally stress me out. I only ever buy what I can afford to without credit.
Another trait about money that I inherited is all generations in my family since and including my grandparents never had any debt. Being in debt even just for a short period would totally stress me out. I only ever buy what I can afford to without credit.
Cash windfalls can absolutely build wealth.
Think of it another way, I hear that big cash expenses can destroy wealth. For instance, if you have no cash reserves, that means you may rely on pay day lenders. You can't afford a Costco membership. You don't have a car so you're limited on where you can work and shop. You cannot afford some vocational training or some time off to train. There are a lot of things that can save or make you money long term.
Also 100k invested in the market will yield you probably around 7k, which is a lot, especially you don't touch it and let it compound.
Think of it another way, I hear that big cash expenses can destroy wealth. For instance, if you have no cash reserves, that means you may rely on pay day lenders. You can't afford a Costco membership. You don't have a car so you're limited on where you can work and shop. You cannot afford some vocational training or some time off to train. There are a lot of things that can save or make you money long term.
Also 100k invested in the market will yield you probably around 7k, which is a lot, especially you don't touch it and let it compound.
Think about what you're saying.
100k invested in the market - untouched - will decay a certain percentage a year in purchasing power due to inflation but will outpace it due to returns.
How many years until that cash windfall changes your life?
The answer is "indefinite" years, especially if you're actually using the funds to do anything, i.e. withdrawing them and preventing compound interest.
In 20 years you might be able to get into a home with the cash if you've absolutely touched not even a penny of it but A. you likely haven't and B. you probably still can't get into a home, 20 years later.
Of course, the number is fake, nobody is handing out 100k.
100k invested in the market - untouched - will decay a certain percentage a year in purchasing power due to inflation but will outpace it due to returns.
How many years until that cash windfall changes your life?
The answer is "indefinite" years, especially if you're actually using the funds to do anything, i.e. withdrawing them and preventing compound interest.
In 20 years you might be able to get into a home with the cash if you've absolutely touched not even a penny of it but A. you likely haven't and B. you probably still can't get into a home, 20 years later.
Of course, the number is fake, nobody is handing out 100k.
> Of course, the number is fake, nobody is handing out 100k.
Lotteries are, there are studies on those.
Lotteries are, there are studies on those.
> 100k invested in the market - untouched - will decay a certain percentage a year in purchasing power due to inflation but will outpace it due to returns.
What's your point? That inflation is a thing? The S&P 500 has delivered an average annual return of 10.33% since 1957, but when adjusted for inflation, the real return drops to 6.47%.
> In 20 years you might be able to get into a home with the cash
Why are you hung up on owning a home? There are 100 other things you could do w/ a windfall with a better return than buying a home. Invest in education is probably one of the more high return things you can do w/ a windfall
https://www.investopedia.com/ask/answers/042415/what-average...
What's your point? That inflation is a thing? The S&P 500 has delivered an average annual return of 10.33% since 1957, but when adjusted for inflation, the real return drops to 6.47%.
> In 20 years you might be able to get into a home with the cash
Why are you hung up on owning a home? There are 100 other things you could do w/ a windfall with a better return than buying a home. Invest in education is probably one of the more high return things you can do w/ a windfall
https://www.investopedia.com/ask/answers/042415/what-average...
> Cash windfalls can absolutely build wealth.
Yes, but that's facile.
Do they, commonly? No.
> Also 100k invested in the market will yield you probably around 7k, which is a lot, especially you don't touch it and let it compound.
You came so close to getting the point, and then kept walking with your own predetermined idea! "Why don't these single-income, struggling mothers and unemployed homeless people just take this cash and invest it?" is the most privilege-laden, oblivious idea I've heard in a while.
Yes, but that's facile.
Do they, commonly? No.
> Also 100k invested in the market will yield you probably around 7k, which is a lot, especially you don't touch it and let it compound.
You came so close to getting the point, and then kept walking with your own predetermined idea! "Why don't these single-income, struggling mothers and unemployed homeless people just take this cash and invest it?" is the most privilege-laden, oblivious idea I've heard in a while.
I think the idea behind these types of programs is not to solve all problems or realize all goals of its beneficiaries, but rather to provide some cushion against small financial upsets that would otherwise derail a person living on the edge of insolvency.
It seems like the evidence falsifies this idea, though.
Just based on what I'm reading it's very likely that your idea of how people are railed or de-railed from life success might not comport entirely with reality, i.e. there aren't really small financial problems that people ride the razor's edge to insolvency.
My understanding of financial problems is that they can only be resolved through huge cash infusions (likely about enough to buy a home outright) or through long-term cash infusions (i.e. a guaranteed well-paying job).
We don't have any mechanisms to provide these things to people, the costs of living are too extreme. I can't suggest anything better, I'm just pointing out the issue.
Just based on what I'm reading it's very likely that your idea of how people are railed or de-railed from life success might not comport entirely with reality, i.e. there aren't really small financial problems that people ride the razor's edge to insolvency.
My understanding of financial problems is that they can only be resolved through huge cash infusions (likely about enough to buy a home outright) or through long-term cash infusions (i.e. a guaranteed well-paying job).
We don't have any mechanisms to provide these things to people, the costs of living are too extreme. I can't suggest anything better, I'm just pointing out the issue.
3rd option that has evidence-based success: Universal Basic Income.
> For instance, you meet someone who is chronically broke. At first, you empathize and see them as more or less a victim of misfortune. Unseen car repair bills, job losses, etc. But if it's someone you follow over years and get to know, you begin to realize a lot of their problems are self inflicted. For instance, they may get a new job with a big pay raise. But they just adjust their spending up. Some windfall that could turn things around becomes a vacation. And so on.
AND, they are enabled and pushed into this mentality by other, also-not-very-financially-savvy people in their lives. When that once in a lifetime $1,000 windfall comes in, everyone around them tells them "Come on, blow it on a vacation! You shouldn't deny yourself a little luxury if it makes you feel good! You can't just eat ramen every day, here's your chance to live a little!" and suddenly they're back where they started, pre-windfall.
AND, they are enabled and pushed into this mentality by other, also-not-very-financially-savvy people in their lives. When that once in a lifetime $1,000 windfall comes in, everyone around them tells them "Come on, blow it on a vacation! You shouldn't deny yourself a little luxury if it makes you feel good! You can't just eat ramen every day, here's your chance to live a little!" and suddenly they're back where they started, pre-windfall.
1000 dollars for a vacation?
It is stupid to fixate on the specific number $1000.
It's just a placeholder for wharever number makes sense in the clearly expressed context. Either substitute $5000 or $10000, or substitute whatever location or demographic you imagined (since none was specified) for some other location or demographic. You can't start in the US and vacation in Venice for $1000, but you absolutely can vacation somewhere else and/or somehow else.
Or, just pretend they said whatever other number you like, because the specific amount was not material to the point they were expressing.
It's just a placeholder for wharever number makes sense in the clearly expressed context. Either substitute $5000 or $10000, or substitute whatever location or demographic you imagined (since none was specified) for some other location or demographic. You can't start in the US and vacation in Venice for $1000, but you absolutely can vacation somewhere else and/or somehow else.
Or, just pretend they said whatever other number you like, because the specific amount was not material to the point they were expressing.
Covers train tickets and hotel for a week if you don't choose an expensive hotel. For a poor person that is much better than nothing.
I just went on business travel with the lowest possible fare and it was more than $1k. Stayed in a cheap hotel too.
And that included zero activities
And that included zero activities
I just went on vacation for two weeks, and it cost me about $100 in gas.
Anecdotes are fun!
Anecdotes are fun!
What is your point? Please add value to the conversation instead of snark
I thought that the point was quite obvious. Are you sure you're not deliberately trying not to see it? Because if so, re-read your own last sentence.
No it’s not obvious. I was pointing out that it’s not cheap to go on vacation. I think you are the one missing the point. Several points up GP says “1000 to go on vacation?”
The conversation was about the expense of going on vacation. You then said that you went on a business trip (not vacation), and that the cheapest fare plus a cheap hotel was more than $1000. They replied that they went on vacation (more relevant than business travel) for $100. That is, they supplied a counter-data-point to your data point.
Then they pointed out that both your data point and theirs were anecdotes (I guess that's what a single data point is), rather than actual data.
So their point was that they have experience that contradicts yours, and that neither their experience nor yours does anything to advance the conversation, because they're both just anecdotes.
As I said, I thought that was very obvious from their post.
So, we're back at Jensson's post from a day ago, with both you and IAmBroom having supplied contradictory anecdotes, and neither having supplied any data. So, do you want to add some data?
Then they pointed out that both your data point and theirs were anecdotes (I guess that's what a single data point is), rather than actual data.
So their point was that they have experience that contradicts yours, and that neither their experience nor yours does anything to advance the conversation, because they're both just anecdotes.
As I said, I thought that was very obvious from their post.
So, we're back at Jensson's post from a day ago, with both you and IAmBroom having supplied contradictory anecdotes, and neither having supplied any data. So, do you want to add some data?
Actually, the conversation was more generally about the mentality of chronically broke people, but as often happens on HN, one reply fixated on a single word (or number in this case), lost the forest for the trees, and derailed the whole topic.
I get that anecdotes aren’t data, but the way it was phrased came off a bit snarky. I’m happy to share my experience without turning this into a debate.
I honestly am not sure whether you think $1000 is way too much or way too little for a vacation, and am curious which you thought.
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It's an example not to be taken literally.
Yours exactly mirrors my own experiences with people who have chronic problems in life. It has been dispiriting in some ways, but freeing in others. The feeling of “if I could just do <x> for them” gives way to an acceptance about the limits of our power to influence others and an accompanying lightening of emotional burden.
It's really hard accepting this, which is why I believe younger people are more naive. It's easier to believe everyone is a victim, but with enough life experience and experience a larger variety of people, you learn that not everyone is just like you. There are huge discrepancies in competence, seriousness, work ethic and a million other things.
Victims absolutely exist, but the best working assumption is that someone has the results they have due to personal decisions. And this equally applies to yourself. If you feel something is wrong or missing in your life, it's best to assume its based on decisions that you made.
Victims absolutely exist, but the best working assumption is that someone has the results they have due to personal decisions. And this equally applies to yourself. If you feel something is wrong or missing in your life, it's best to assume its based on decisions that you made.
Isn’t it pretty obvious that it’s possible to be a victim of more than specific financial circumstances or poor health?
The inheritance we (don’t) get is not just monetary, it is attitude, culture, expectations, education, network, class privilege, race privilege, and a host of other things that make it difficult to act “rationally”, or which change the parameters of what is rational for each individual.
Lack of money never helps, but it’s rarely the only problem.
The inheritance we (don’t) get is not just monetary, it is attitude, culture, expectations, education, network, class privilege, race privilege, and a host of other things that make it difficult to act “rationally”, or which change the parameters of what is rational for each individual.
Lack of money never helps, but it’s rarely the only problem.
I’m older and the problem I’ve had is that if you stop giving regularly, you probably will continue not to give. So, articles like this with the best intent just lead to people giving less and not volunteering or providing any other help. If you think giving money doesn’t help, then try a massive reduction in giving and see how that helps. Programs get cut, people get desperate and more mentally unbalanced, start doing drugs, start selling drugs, and they start killing people.
So its protection money. Give money to the poor so they don't kill you.
Awesome.
Awesome.
Yes, in a way, but I think the person you replied to said it better!
Nah you gotta work for the rich or they WILL kill you by denying health care, shelter, and food.
There’s a Just World Fallacy if I ever saw one.
It's also literally true. Violent revolutions in history come about when the people are fed up with the king and also have the means to do one.
It's also true the other way: you have to pay rent (poor pays rich) or else their thugs come and beat you up.
Pretty much everyone wants your money or they'll do what you can to make your life worse. You'll also do what you can to make other people's life worse if they don't give you enough money, like not working for them.
It's also true the other way: you have to pay rent (poor pays rich) or else their thugs come and beat you up.
Pretty much everyone wants your money or they'll do what you can to make your life worse. You'll also do what you can to make other people's life worse if they don't give you enough money, like not working for them.
What you say is 100% true for some. I saw a poor family run a fundraiser for themselves; they spent $300 on a donation party that brought in < $50 (and was unadvertised except amongst friends). Truly dumb implementation, by not-dumb people.
It is 100% not true for others. My neighbors know every damn trick in the book for welfare; it's a part of their budget. More money removes serious obstacles in their days.
It is 100% not true for others. My neighbors know every damn trick in the book for welfare; it's a part of their budget. More money removes serious obstacles in their days.
From that perspective, are you advocating society should abandon people who cannot help themselves? To me, that’s the point!
Presumably: "that's the point [of a society]".
Correct me if wrong.
Correct me if wrong.
Totally on point.
I’m as free-market-laissez-faire as they come, but without guard rails, taking it to its logical conclusion then there should only be a single person in the world holding all the money!!
I’m as free-market-laissez-faire as they come, but without guard rails, taking it to its logical conclusion then there should only be a single person in the world holding all the money!!
The centerpiece of the author's thesis, which is that "the media" exaggerates the impact of cash payments to the poor, is undercut by an egregiously sloppy reading of the results of the Denver Basic Income study: she criticizes the project's claim that there was significant improvement in housing for people receiving $1000/mo vs the control group receiving $50/mo, citing results that show 43% of the controls were in housing by the end of the study while 44% of the test group were. What she fails to mention is that 12% of the controls were already housed at the beginning of the study, vs only 6% of the test group.
She also fails to mention that the Baby's First Year study was unfortunately overlapped by the Covid epidemic, introducing an enormous confounding factor (made all the more significant since the study measured child welfare), not to mention the Covid payments that likely dwarfed the $333/mo study payments and would have been received by both control and test subjects.
https://www.denverbasicincomeproject.org/research
https://newrepublic.com/article/199070/government-cash-payme...
She also fails to mention that the Baby's First Year study was unfortunately overlapped by the Covid epidemic, introducing an enormous confounding factor (made all the more significant since the study measured child welfare), not to mention the Covid payments that likely dwarfed the $333/mo study payments and would have been received by both control and test subjects.
https://www.denverbasicincomeproject.org/research
https://newrepublic.com/article/199070/government-cash-payme...
I am ashamed to complain she's the worst writer I've had the privilege of shaking my head at in my 37 years. There's this rushed, Eye of Sauron saccades, extremely-online, consistent undercurrent, stapled to a Stanford Rationalist™ who has never had to struggle to make a stronger argument - which opened my eyes to how much "Rationalism" is "performing thought in a particular style in a particular social group"
This is a brand new publication and I really wish they skipped her, made the whole endeavour seem unserious and extremely online to me (which it is! but I wouldn't have noticed. so I guess I'm grateful?)
It also made me appreciate how little editorial there is left, so many publications, especially online, are stripped down to the point its freelance bloggers that kinda stay the same no matter what, rather than people growing as writers.
My two most scarring facepalms in recent memory:
- [my home] Oakland is safe, the Feds coming in isn't needed, But..............the real problem of them being here would be Duh Dems complaining, people know crime is real and bad and hate being lied to.
- It'd be bad if we deported people for their views but then again we don't know what we don't know about the level of terrorist support provided by these people who complain about Gaza.
This is a brand new publication and I really wish they skipped her, made the whole endeavour seem unserious and extremely online to me (which it is! but I wouldn't have noticed. so I guess I'm grateful?)
It also made me appreciate how little editorial there is left, so many publications, especially online, are stripped down to the point its freelance bloggers that kinda stay the same no matter what, rather than people growing as writers.
My two most scarring facepalms in recent memory:
- [my home] Oakland is safe, the Feds coming in isn't needed, But..............the real problem of them being here would be Duh Dems complaining, people know crime is real and bad and hate being lied to.
- It'd be bad if we deported people for their views but then again we don't know what we don't know about the level of terrorist support provided by these people who complain about Gaza.
The main study mention found 3 years of 1k a month had no impact on health, stress, sleep, jobs, income, education, child's education, or time spent with children compared to the control. Other studies have also shown tiny benefits a their headline findings.
I think its clear UBI is not the savior people wish it was, sadly.
I think its clear UBI is not the savior people wish it was, sadly.
Contrary to the author's assertion, the Denver Basic Income study, which gave $1000/mo, found a significant improvement in housing for the test group vs the controls. She misread the results, failing to note the initial housing rates for control vs test.
https://www.denverbasicincomeproject.org/research
https://www.denverbasicincomeproject.org/research
I read your other comment with the numbers and I don't think it makes the amazing difference you seem to. Certainly not to the degree i think it makes it all worth it. Maybe if they at least plateau in different places, but they don't. I think you seem fairly defensive (you've posted the same response repeatedly) about what still seem like middling results.
As a basic example: While your point about the starting percentages is correct, the study lost partipicants over time. Group A (the 1k/month group) lost 33% of its participants by T3, and Group C (the 50/month comparison group) lost 38% of its participants.
The table you quote from the final study doesn't include the people who were lost, only those who filled out both surveys, T1 and T3. So using it to say they helped a greater percent of people is a bit weird.
They also don't tell you the table for T2 in the final report, you have to go look at the interim one.
The T2 data makes T1->T3 look much less impressive, and definitely doesn't seem to support some amazing gain for group 1.
As far as i can tell, the data looks even less impressive for your claim if you do t1->t2, and T2->t3, instead of just t1->t3 with only both included.
It would certainly be easier to tease apart the point you try to make if they reported the number of originally unhoused vs originally housed that were retained at each timepoint, but they don't.
So what am i missing? Why should I look at these results and think it is amazing?
(Also, I don't think i'd agree the main argument the author makes is based and refuted solely by the results of the denver study)
As a basic example: While your point about the starting percentages is correct, the study lost partipicants over time. Group A (the 1k/month group) lost 33% of its participants by T3, and Group C (the 50/month comparison group) lost 38% of its participants.
The table you quote from the final study doesn't include the people who were lost, only those who filled out both surveys, T1 and T3. So using it to say they helped a greater percent of people is a bit weird.
They also don't tell you the table for T2 in the final report, you have to go look at the interim one.
The T2 data makes T1->T3 look much less impressive, and definitely doesn't seem to support some amazing gain for group 1.
As far as i can tell, the data looks even less impressive for your claim if you do t1->t2, and T2->t3, instead of just t1->t3 with only both included.
It would certainly be easier to tease apart the point you try to make if they reported the number of originally unhoused vs originally housed that were retained at each timepoint, but they don't.
So what am i missing? Why should I look at these results and think it is amazing?
(Also, I don't think i'd agree the main argument the author makes is based and refuted solely by the results of the denver study)
>I read your other comment with the numbers and I don't think it makes the amazing difference you seem to.
Maybe you're looking more at the article headline, which implies the author was focused on the study results. The thrust of the article isn't that the programs are ineffective (in fact, toward the end of the article she's quite optimistic that isn't the case). Her problem is that the results are overstated. But one of the prime examples she cites to support that idea does not actually support it. Denver claimed significance, and the study results support their claim.
>The table you quote from the final study doesn't include the people who were lost, only those who filled out both surveys, T1 and T3. So using it to say they helped a greater percent of people is a bit weird.
Why is that weird? The percentage of the test group who found housing is significantly higher than control. We don't know what happened to the people who dropped out---the worst case scenario is that none of them found housing, which leaves the stats as they are.
>So what am i missing? Why should I look at these results and think it is amazing?
They didn't claim it was amazing, they claimed it was significant. The author implied they were lying. They were not. That's what you're missing.
Maybe you're looking more at the article headline, which implies the author was focused on the study results. The thrust of the article isn't that the programs are ineffective (in fact, toward the end of the article she's quite optimistic that isn't the case). Her problem is that the results are overstated. But one of the prime examples she cites to support that idea does not actually support it. Denver claimed significance, and the study results support their claim.
>The table you quote from the final study doesn't include the people who were lost, only those who filled out both surveys, T1 and T3. So using it to say they helped a greater percent of people is a bit weird.
Why is that weird? The percentage of the test group who found housing is significantly higher than control. We don't know what happened to the people who dropped out---the worst case scenario is that none of them found housing, which leaves the stats as they are.
>So what am i missing? Why should I look at these results and think it is amazing?
They didn't claim it was amazing, they claimed it was significant. The author implied they were lying. They were not. That's what you're missing.
Results for Group A (1000$/m) closely resemble results for control Group C(50$/m). Metrics like % of Unsheltered participants, change in full-time employment, % of participans in a house they rent or own... have a diference of 1 or 2 points.
Thats the point of the author, those are minimal variances, and insuficient to claim inpact due to basic income.
Personal opinion. The study itself exert a nontrivial influence on participants. The act of being engaged, regular check-ins... affect positively. Their lives improve independent of the financial component because they are part of the study, not because of the amount of money in the procedure.
Thats the point of the author, those are minimal variances, and insuficient to claim inpact due to basic income.
Personal opinion. The study itself exert a nontrivial influence on participants. The act of being engaged, regular check-ins... affect positively. Their lives improve independent of the financial component because they are part of the study, not because of the amount of money in the procedure.
Where are you getting the figures for unsheltered participants? The page I linked seems pretty clear: there was a 31% increase in housing for the control group, and a 38% increase for the group that received payments. That's a significant improvement, much more than 1 or 2 points. Especially considering the likelihood that some of the participants in both groups might have no intent to get housing either way.
38% for $1,000/mo vs 31% in the control group seems like a pretty disappointing result to me. Maybe not insignificant, but more lose than win.
Maybe 38% vs 31% saved the city a large amount of money. The question wasn't whether the results disappointed any particular individual. The author's claim is that Denver overstated their results and that turns out not to be true.
The main point of UBI isn't “more money solves problems”, it is “replacing means testing of benefits with unconditional benefits removes adverse effects of the rapid clawback of benefits with increasing-but-still-low income”.
Giving individuals money without changing the policy context doesn't actually test the mechanism of action proposed for UBI. (It does, arguably, test the mechanism of action of some proposed private charity [or business-linked] alternatives which do involve cash transfers and don't involve changing the public policy context and incentives, but that's a whole different issue.)
Giving individuals money without changing the policy context doesn't actually test the mechanism of action proposed for UBI. (It does, arguably, test the mechanism of action of some proposed private charity [or business-linked] alternatives which do involve cash transfers and don't involve changing the public policy context and incentives, but that's a whole different issue.)
UBI has many different defenses.
One of them is that means tested benefits are harmful, and I think it's a really strong one.
But another very common defense of UBI is that mass unemployment is inevitable, but because of technological developments that cause wide abundance, so UBI can be used to make that abundance available to the newly unemployed.
The harms of means testing are many. They include:
- Massive organizational overhead to do the means testing, have appeals process, have fraud detection, and fraud punishment. - Personal overhead on those who have to 'pass' the means-testing. This can be non-trivial procedurally, and appeals tend to be very complicated. Moreover, the consequences of making a mistake that gets marked as fraudulent are severe. This makes it quite time- and stress-costly to get these benefits, and makes some people skip them. - It creates weird economic incentives, if done exceptionally poorly, it creates situations where an increase in net income causes a decrease in gross income. In other situations you get an effective marginal tax rate of nearly 100%, which discourages work and prevents the building of wealth by advancing a career.
One of them is that means tested benefits are harmful, and I think it's a really strong one.
But another very common defense of UBI is that mass unemployment is inevitable, but because of technological developments that cause wide abundance, so UBI can be used to make that abundance available to the newly unemployed.
The harms of means testing are many. They include:
- Massive organizational overhead to do the means testing, have appeals process, have fraud detection, and fraud punishment. - Personal overhead on those who have to 'pass' the means-testing. This can be non-trivial procedurally, and appeals tend to be very complicated. Moreover, the consequences of making a mistake that gets marked as fraudulent are severe. This makes it quite time- and stress-costly to get these benefits, and makes some people skip them. - It creates weird economic incentives, if done exceptionally poorly, it creates situations where an increase in net income causes a decrease in gross income. In other situations you get an effective marginal tax rate of nearly 100%, which discourages work and prevents the building of wealth by advancing a career.
During covid, lots of people received a stimilus. The lines at high-end purse and luxury good stores were longer than I've ever seen.
To be fair many people who were still employed and making decent money for their area received stimulus checks. At that point why not treat it as fun money? After all, you’re trying to stimulate the economy. That includes luxury stores.
Others were making more on unemployment than they did while employed. They got checks on a regular basis that meaningfully increased their income level. I’m not surprised or offended if they try to temporarily increase their standard of living in frivolous ways.
Others were making more on unemployment than they did while employed. They got checks on a regular basis that meaningfully increased their income level. I’m not surprised or offended if they try to temporarily increase their standard of living in frivolous ways.
You might believe that, and who knows, it may be true!
But your one unsubstantiated story doesn’t constitute data that can be used to compare to anything.
But your one unsubstantiated story doesn’t constitute data that can be used to compare to anything.
https://x.com/ManDaveJobGood/status/1752500940845072754
Other people had the same idea as me. With data! PPP loans taken out during Covid to thousands and thousands of one-person companies and eventually forgiven by the Biden administration.
To make another point, why didn't we see a surge in art and positive improvements when someone gets free money from the government? Because what happened is what always happens: It was wasted.
Other people had the same idea as me. With data! PPP loans taken out during Covid to thousands and thousands of one-person companies and eventually forgiven by the Biden administration.
To make another point, why didn't we see a surge in art and positive improvements when someone gets free money from the government? Because what happened is what always happens: It was wasted.
I worked at a maker space during the pandemic and I can attest that our membership surged once we were able to resume semi-regular operations.
I think Covid is unique because people just needed an outlet for something good in their life.
The framing here is a bit off. As far as I can see, they don’t link to anyone actually saying something like “poverty is cured by direct cash transfers.” I don’t know who believes that. I browsed through the Denver study and while some metrics didn’t significantly improve, many of them did. I think the author overplays their hand somewhat.
Some NGOs that help unhoused people did shift to direct cash transfers because 1) they still help improve material conditions (even the author agrees with this), and 2) it’s politically easier than trying to convince locals to actually build affordable housing.
Of course a holistic approach is probably going to improve conditions better, but no one with actual political power is interested in doing that.
Some NGOs that help unhoused people did shift to direct cash transfers because 1) they still help improve material conditions (even the author agrees with this), and 2) it’s politically easier than trying to convince locals to actually build affordable housing.
Of course a holistic approach is probably going to improve conditions better, but no one with actual political power is interested in doing that.
Contra, "The First $10,000 [of Net Worth] is the Most Important":
> What’s the smallest amount of money that you would consider “life-changing”? Some might say $100,000. Others over $1 million. If you had asked me this question a few years ago, I would have told you something similar.
> But today, I’m convinced that the most life-changing amount of money is $10,000—in particular, the first $10,000.
[…]
> Why? Because getting out of Level 1 fundamentally changes how you experience life. You go from focusing on your next paycheck and dreading your next bill to enjoying your time without worry. Getting out of Level 1 frees your mind so that you can focus on other things. That first $10,000 can bring: Stability […]; Confidence […]; Momentum […]; Mental freedom.
* https://ofdollarsanddata.com/the-first-10000-is-the-most-imp...
* https://news.ycombinator.com/item?id=44931836
> What’s the smallest amount of money that you would consider “life-changing”? Some might say $100,000. Others over $1 million. If you had asked me this question a few years ago, I would have told you something similar.
> But today, I’m convinced that the most life-changing amount of money is $10,000—in particular, the first $10,000.
[…]
> Why? Because getting out of Level 1 fundamentally changes how you experience life. You go from focusing on your next paycheck and dreading your next bill to enjoying your time without worry. Getting out of Level 1 frees your mind so that you can focus on other things. That first $10,000 can bring: Stability […]; Confidence […]; Momentum […]; Mental freedom.
* https://ofdollarsanddata.com/the-first-10000-is-the-most-imp...
* https://news.ycombinator.com/item?id=44931836
My fundamental belief: Money doesn't bring happiness, but the lack of it brings unhappiness.
The author of https://ofdollarsanddata.com/ has a new book that has a couple of chapters that go into this:
* https://ofdollarsanddata.com/the-wealth-ladder/
The research he cites finds that happiness starts levelling out at Levels 3-4 of his framework. Some of his posts on the subject:
* https://ofdollarsanddata.com/?s=happiness
* https://ofdollarsanddata.com/the-wealth-ladder/
The research he cites finds that happiness starts levelling out at Levels 3-4 of his framework. Some of his posts on the subject:
* https://ofdollarsanddata.com/?s=happiness
A few hundred to $1K seems too little to have much impact.
Going from 0-$1k/mo or $1K to $2k/mo means you're still broke.
You can definitely afford some food or necessities that were harder before, but fundamentally, you still need to hustle to change the fundamental financial situation.
Going from 0-$1k/mo or $1K to $2k/mo means you're still broke.
You can definitely afford some food or necessities that were harder before, but fundamentally, you still need to hustle to change the fundamental financial situation.
I would still have expected that going from 0-1K to 1-2K would allow a lot more people to bootstrap themselves out of poverty. At least under the hypothesis that Poverty is a symptom of a persons circumstances, with most notably a lack of a financial buffer allowing for smart moves (e.g. the Sam Vimes theory of boots, or not being able to get a job because you cannot afford transportation).
In that case, that extra money should likely cause quite a few people to get out of those self-reinforcing poverty traps, and let them escape.
In that case, that extra money should likely cause quite a few people to get out of those self-reinforcing poverty traps, and let them escape.
I believe this was previously flagged and has now been unflagged by the mods.
I wonder why they chose to unflag this and not, for instance, “Brennan Center for Justice Report: The Campaign to Undermine the Next Election,” which is far better journalism and had a lot more discussion: https://news.ycombinator.com/item?id=44816165
They say they don’t make moderation decisions for political reasons, but I am finding it harder and harder to see.
I wonder why they chose to unflag this and not, for instance, “Brennan Center for Justice Report: The Campaign to Undermine the Next Election,” which is far better journalism and had a lot more discussion: https://news.ycombinator.com/item?id=44816165
They say they don’t make moderation decisions for political reasons, but I am finding it harder and harder to see.
This is a completely unsurprising outcome to anyone who has actually been poor and spent considerable time around poor people. Being poor is both a mindset and an actual socioeconomic status. Giving enough cash to marginally change socioeconomic status will not change the mindset. The biggest thing we could is actually improve financial literacy in the US by mandating it as part of our standard educational curriculum, but that will never happen as so much of our economy is built off exploiting the uneducated, who are almost always poor.
I started in pretty much the same circumstances as most of my peer group, with one distinct difference, my dad had gone to school for business and accounting and was a bit miserly, he instilled in my an understanding of the value of a dollar and the right skillset to track where my money is going. That small little difference is what separates the fact I will end up dying a multi-millionaire and my peer group are mostly going to end up dying broke. Obviously there's hundreds of thousands of little choices we make every day of our lives that nudge things in one direction or another for your financial trajectory, but starting with a grounding in financial literacy is literally life-changing.
It's not cash that people need, it's education, so that they can actually effectively use the money they already earn. I started saving from my very first job as a teenager, and have never stopped. The median American net worth excluding home equity is negative, mine has never been negative at any point in my entire life, from before I was an adult, despite growing up low-income in a rough area.
I started in pretty much the same circumstances as most of my peer group, with one distinct difference, my dad had gone to school for business and accounting and was a bit miserly, he instilled in my an understanding of the value of a dollar and the right skillset to track where my money is going. That small little difference is what separates the fact I will end up dying a multi-millionaire and my peer group are mostly going to end up dying broke. Obviously there's hundreds of thousands of little choices we make every day of our lives that nudge things in one direction or another for your financial trajectory, but starting with a grounding in financial literacy is literally life-changing.
It's not cash that people need, it's education, so that they can actually effectively use the money they already earn. I started saving from my very first job as a teenager, and have never stopped. The median American net worth excluding home equity is negative, mine has never been negative at any point in my entire life, from before I was an adult, despite growing up low-income in a rough area.
They all know the money is going to stop coming in.
Yeah, I've heard this critique too and I'm not sure how to address it.
Like, the whole point of a 'study' is to test things out. That's temporary by design.
But yes, it's a giant confound too.
I guess what the DBIS showed is that the results are not spectacular and automatic. They are slight-ish, grey, muddled.
Like, if UBI was a panacea like insulin was to diabetics, then we'd expect a huge result and difference. But it wasn't, and that a good result to report out too. I just wish there was a silver bullet.
Like, the whole point of a 'study' is to test things out. That's temporary by design.
But yes, it's a giant confound too.
I guess what the DBIS showed is that the results are not spectacular and automatic. They are slight-ish, grey, muddled.
Like, if UBI was a panacea like insulin was to diabetics, then we'd expect a huge result and difference. But it wasn't, and that a good result to report out too. I just wish there was a silver bullet.
If they did a study about insulin where they give it to you for 1 year then take it away, the results wouldn’t be positive.
Oh no, they would very much be positive. You'd know that insulin would have saved every one of their lives. Even a very small does of insulin is just that good.
But these studies aren't like that. They aren't that good. UBI isn't that good. That's what I get out of these studies.
But these studies aren't like that. They aren't that good. UBI isn't that good. That's what I get out of these studies.
If insulin was already GA, and you gave it to people without insulin, and they believed that you’d stop giving it to them in a few months. The people would be healthy temporarily while preparing for immanent suffering. The study would likely report mixed psychological benefits. I hope the analogy makes sense.
A better UBI study would bucket people into a lifetime monthly payout (with inflation increase etc). Give them an opportunity to invest in their lives.
A better UBI study would bucket people into a lifetime monthly payout (with inflation increase etc). Give them an opportunity to invest in their lives.
Every time I read explorations into basic income or cash transfers, I look for any signs that recipients' models of how money or wealth work are changing, and I don't see it. Thus, it seems to me like an evergreen source of naivete where the directors of cash expect the structural problems from not understanding those concepts to erode, but never do.
I wonder about the possibility of a graduated financial literacy scale for participants that studies can use.
For example, I have too many connections to the financially struggling to not ask for the receipts when they complain to me. Well, they demur, the cost of living is expensive. Okay, but can I see your spending? Typically never, but when I do, it's bad loans, unrestrained taxis-for-your-burritos and impulse purchases that fritter their income away $5-50 at a time indefinitely. There is no saving. There is no wealth. Only impulsivity. Nor is there change or recognition. New or bigger income sources only change one variable of their equation while their spending behaviors are fixed, and the outcomes are the same.
I wonder about the possibility of a graduated financial literacy scale for participants that studies can use.
For example, I have too many connections to the financially struggling to not ask for the receipts when they complain to me. Well, they demur, the cost of living is expensive. Okay, but can I see your spending? Typically never, but when I do, it's bad loans, unrestrained taxis-for-your-burritos and impulse purchases that fritter their income away $5-50 at a time indefinitely. There is no saving. There is no wealth. Only impulsivity. Nor is there change or recognition. New or bigger income sources only change one variable of their equation while their spending behaviors are fixed, and the outcomes are the same.
money does nothing without stable housing and community
A question for people who, like the author of this article, are genuinely surprised by these results: do these results change the way you think about what social interventions are feasible? Do they change the way you think about human nature?
nemo44x(1)
siva7(4)
I’m not convinced because all of these examples gave people a pittance. $1000 a month at most? Give me a break. If someone is drowning, you can’t give their arm a little tug and claim that as strong evidence that pulling them out of the water won’t save them.
Actually, the Denver Basic Income study cited did find a significant benefit for the $1000/mo payments (and even larger benefit for the lump sum). The author of the article misrepresents the actual findings, which are here:
https://www.denverbasicincomeproject.org/research
https://www.denverbasicincomeproject.org/research
It's 66% of the current Federal Poverty Level. That means that much of the poor people studied (in the US) were making less than that annually (they don't all lump up at the high end of poverty).
If giving someone a 66% or more bump in income doesn't change their situation, they didn't have money problems to begin with.
If giving someone a 66% or more bump in income doesn't change their situation, they didn't have money problems to begin with.
$1000/MN is enough to change people's lives if they have nothing.
It's enough to get them over the hump if they're $1000/mo away from having something. Unfortunately a lot of people are further behind than that. Being poor is very expensive.
> I cannot stress how shocking I find this and I want to be clear that this is not “we got some weak counterevidence.”
I don't think this is surprising when considering personal experience with people, at least not for me.
I know people with various degrees of success in their lives. For instance, you meet someone who is chronically broke. At first, you empathize and see them as more or less a victim of misfortune. Unseen car repair bills, job losses, etc. But if its someone you follow over years and get to know, you begin to realize a lot of their problems are self inflicted. For instance, they may get a new job with a big pay raise. But they just adjust their spending up. Some windfall that could turn things around becomes a vacation. And so on.
The same is true with other personal problems. Like the perpetually single person, who upon further examination, doesn't do anything to help their chances. Or the overweight person with a thyroid problem, that really just over indulges.
Helping people we're close to and love is hard enough. I can't imagine just solving some strangers problems by writing them a check