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Comment by moduspol | Hacker News Reader

The idea of replacing existing social programs with cash handouts reminds me of Bitcoin's earlier days. Proponents were thinking of what it would be like if they were poor, and not what life is like for poor people.

It is not the case that you can reasonably just give large groups of people with histories of poor financial literacy cash as a replacement for food, shelter, or other necessities. Many people will make bad choices if just given money. That's why many of these programs were built this way: to ensure people can't spend all their cash and be unable to afford baby formula or rent.

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Many experiments have been done that involve giving UBI-like grants (and even large, one-time-only cash grants) to people in extreme poverty. The money gets spent in sensible ways, by and large. Investing in one's shelter (e.g. replacing a leaky roof), paying for children's education or buying assets for a profitable business venture are extremely common choices. Regardless of their "financial literacy" (people in extreme poverty are hardly used to dealing with financials!) people seem to grok that they're getting something quite valuable, and are not inclined to waste what they get.

I haven't yet seen a UBI experiment that replaced someone's pre-existing means for food, shelter, or other necessities. But maybe I missed it.

I don't think anyone doubts that often people will spend additional money they are given productively.

Why shouldn't cash be the benchmark when it comes to aiding poor folks? If giving food or shelter really is more helpful than just giving the equivalent cost in cold hard cash, that will be quite interesting. But let's see the proof of that.

They don't have the financial literacy skills to manage it properly.

I'm not trying to be unreasonably judgemental, and I don't mean things like bond rates or yield curves. Things like making sure you have enough dollars at the end of the month to make a rent payment. Making sure the check gets written so it actually happens. Keeping track of automated withdrawals and ensuring the number stays above zero with the timing of all of them.

This is not trivial at all for a huge chunk of the population that is served by social welfare programs. You can't just expect it to work out giving them cash instead.

I believe this has been debunked by previous UBI studies, Give Directly, etc..

The vast majority of poor people do just fine with money when given to them. The 1-2% who are addicted to substances or mentally ill will always need additional services, but why throw out the huge efficiency gains in just direct cash transfers to all because of the worry that 1-2% might waste it? The efficiency gains of a UBI vs. most means-tested programs is likely more on the order of 20-50%.

A similar argument is “would we give a UBI to billionaires too?! What a waste!” Yes, what a waste of 0.0000003% of the UBI!

> I believe this has been debunked by previous UBI studies, Give Directly, etc..

One shortcoming of the UBI studies I've heard about is that (naturally) they focus on settings that I don't have much confidence would necessarily translate to other settings like the current US. I can easily imagine the efficiency of UBI changing over time, let alone across locations, due to a plethora of factors. This isn't really a criticism of the studies (they're probably doing the best they can, and achieving good results on those is obviously a prerequisite), but rather of how much we can extrapolate from them and how much weight we can put in positive results currently. No matter how perfect their results, I'd totally expect people to be reasonably skeptical of their extrapolability (if that's a word) in the beginning.

that's a deeply cynical and paternalistic mindset

The Canadian Manitoba Mincome experiment is probably as close as has been done for that.

https://en.wikipedia.org/wiki/Mincome

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