Comment by zeveb | Hacker News Reader

Comment by zeveb | Hacker News Reader

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> Unless we just forgive rent until a vaccine is out, many people will never catch up.

If 'we' forgive rent owed landlords, will 'we' also forgive the mortgages those landlords owe the banks? Will 'we' also forgive the obligations the banks which owe to other banks and their investors? Will 'we' also forgive the obligations those investors owe, for example to pensioners? Will 'we' then step up and pay for those pensioners' food and … rent?

An economy is a gigantic web of interlocking relationships. It takes years (one might even say centuries!) to build and develop all of those, but it takes far less effort to destroy them. It is computationally impossible for anyone to understand all of an economy, and thus impossible for anyone to make good decisions on behalf of an entire economy.

If we are worried about folks without resources, we should give them some. Yes, that runs the risk of encouraging those who want to get those resources (e.g. student financial aid encourages the growth of the academic industry, mortgage assistance encourages the growth of the real estate industry &c.): we should probably just give the poor some amount of money and let them make their own decisions about it. Call it unemployment or UBI or whatever.

The fact that it's impossible to make good decisions doesn't change the fact that a decision has to be made, nonetheless. This isn't a computer game where there's an answer to the puzzle from the designer, where the COVID-19 monster shows up but it has a weak spot on the back of its tail where you can land a critical hit. There is no good solution. Our job is to find the least-bad one.

I think there's a good argument that yes, forgiving all of those rents and paying for the pensioners' pensions is less bad than not doing anything. (We might also want to consider why pensioners are living off of complex financial relationships instead of, like, cash, and whether that risk/reward tradeoff was good for society, but we won't be able to see the results of any changes we make for another generation or two.)

I do think that, yes, "we will just give you money" (and "we will increase taxes on people who won't get evicted if we do") is a fine answer too.

But also, the amount of benefit that any intervention can have drops rapidly by the month. Every time rent payments (or mortgages, or pension-funded bills) are due, there's a new batch of people who can't pay it. A bad answer today, and maybe a workaround for second-order effects later, is a lot better than a better answer in three months.

> The fact that it's impossible to make good decisions doesn't change the fact that a decision has to be made, nonetheless.

Does it? Maybe the right answer is not to make all decisions in one place: maybe the right answer is to let every citizen make his or her own decisions. The one who is willing to trade the emotional cost of moving back in with his loving family in order to have more money for lunches with friends does so, while the one with abusive parents chooses to cancel cable rather than moving back in — and so forth.

> We might also want to consider why pensioners are living off of complex financial relationships instead of, like, cash

Because storing all of one's life savings under the mattress is susceptible to theft. Even taking a broader definition of 'cash' to include a bank account, would you at age 60, with another 20 years to live, rather be earning 0.06% (the current savings account rate) or 1% (or more) per annum? At 0.06%, one would need about $100,000,000 to earn the $64,000 median U.S. income in interest. Alternatively, if you figure that you will live a maximum of 50 more year, you will need over $3 million in order to retire and just spend the money. You gotta invest to have something to live off of.

> Does it? Maybe the right answer is not to make all decisions in one place: maybe the right answer is to let every citizen make his or her own decisions.

That is one of the possible decisions, yes. It does seem to be the decision the US is going with, for the most part.

(I'm a little confused what you mean by "cancel cable" - do you live somewhere where the cost of a monthly cable TV bill is comparable to the cost of a monthly rent bill?)

> would you at age 60, with another 20 years to live, rather be earning 0.06% (the current savings account rate) or 1% (or more) per annum?

It depends on the risk profile. If you can guarantee me 1% or more per annum without risk, then obviously I'll take it, but if you could make that guarantee, then savings accounts would just make the same investment and offer 1% interest too.

Also, if you tell me that my options are earning 1% on my savings and setting up a system of complex dependencies that leads to a thousand people becoming homeless over the rest of my life, or 0.06% and not doing so, that may influence my answer.

The reason retired people can’t live off of cash is simple - inflation. In many countries, governments provide and guarantee retirement. US has largely shifted to saved retirements in the form of IRA/401Ks. These are investment accounts, which means your principle is not protected, but you earn interest to, hopefully, protect you from inflation and build returns. In practice, those retired end up bearing the same market risk as normal investors, whereas a government insured pension is only as risky as the government itself (which differs by country).

Oh hm, I guess there's a natural experiment there - are countries that have government-backed pensions more willing to do rent cancellations than the US is? (There are a lot of confounding factors, to be fair.)

I've never seen a government tasked with taking care of the populace actively work against them as much as this one has. Assistance is endless paperworks, checks, administrators, double check. All to make sure the people that need that help can't get that help. It would be so much easier for everyone for government assistance to be cash. But we'd rather have endless "programs" marked up 100% where in the end assistance is 50% cash and 50% administration.

If 'we' forgive the rent owed to landlords, what about the property taxes that can be just as large as the mortgage. NYS has an eviction moratorium, but they still want their taxes.

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