Comment by ryandrake | Hacker News Reader

Comment by ryandrake | Hacker News Reader

> The whole program, it turned out, lent itself to dishonesty. Faraway investors were desperate to get to the U.S., and didn’t keep close track of where their money was going. The lawyers and brokers got large transaction fees and had little incentive to point out potential wrongdoing. “Everybody was making millions of dollars, but very few people wanted to speak the truth about the riskiness of these investments,” Gibson, the EB-5 adviser, said. There was almost no governmental oversight built in.

Tale as old as time. Whenever the government simply funnels money out to "businesses" without oversight, it's going to get embezzled. The massive fraud that came along for the ride with PPP COVID relief is just the latest example. The government never seems to learn though, and I'm sure in 2-5 more years, there will be another money firehose and along with it the predictable fraud.

Funny how when it comes to handing money out to low income individuals, the government is willing to spend $100 for every $1 handed out: to scrutinize, means-test, and put these payments under a microscope of enforced rules. But when it comes to handing money out to rich people and businesses, all of a sudden "there's no way we can oversee such a complex program!"

I'm not going to argue with your central point that we spend too much time scrutinizing small dollar awards. The PPP program was ridiculous. I had a very difficult time helping two legit non-profits (one a nursery school, one a food pantry) get a fraction of the money they were entitled to under the PPP program, while less scrupulous people got far more.

In the EB-5 real-estate investment program, the government doesn't hand out money here. If you're a rich overseas individual who wants to relocate to the US, you can invest like $1-2m (used to be lower), and boom you're in.

You’re right of course. In this case it’s not the government’s money, but they are still in a sense holding the funnel, guiding its direction, and promising (falsely) to regulate the flow. This stink attracts the same sort of fraudulent flies as other money funnels.

>and promising (falsely) to regulate the flow

What type of promises did they offer? Based on the newyorker article as well a quick skim of the wikipedia article on eb-5, it doesn't seem like the government was supposed to do any due diligence. The government doesn't require you invest in specific investments that it endorses. Any investment that meets the given criteria would work. You can even create your own enterprise to use as an investment.

> In the EB-5 real-estate investment program, the government doesn't hand out money here

The government is handing out value here. What's the difference?

What does "handing out value" in this context mean? Are you talking about the visas? The investment dollars?

Invest in me and I can get you something of value that normally only the government can give you. Surely you'd pay more for the same investment when it opens up an immigration pathway.

But if you don't have anything to offer an investment in, you're excluded from this program.

But all of this exists in a competitive market. The person soliciting investment in your example isn't the only person that can help people get visas. Anyone who has some sort of business that falls under the applicable criteria is eligible. The immigrant can even start their own business. Therefore, blaming the government doesn't really make sense. Caveat emptor.

And poor people actually pump that money into the economy, they’re very effective at it.

Usually the government is fully aware of the risks of fraud.

But that the cost of not implementing the program is far worse.

Which in the case of PPP would've meant a lot of businesses failing and workers without a job.

And that's worse than poor people not being able to eat how? It's the same excuse trotted out time and again, but the only beneficiaries that actually exist are people anyway, so it makes no sense (unless you think rich people are more deserving than poor people.)

When pressed, most of the people who support strict means testing for welfare will eventually admit that it's not about saving the government money, and that they support it even if it ends up costing taxpayers on net (which it almost always does). They're pretty clear that this is about punishing indigence.

>They're pretty clear that this is about punishing indigence.

But why? Are they doing so so they want to oppress poor people? Or are they doing so to make the welfare experience shitty so people are incentivized to seek normal employment?

For many politicians and voters, mere cruelty is the entire point[1] of lawmaking. The government's purpose is to hurt one's opponents, which is more important than helping... anyone.

1: https://www.theatlantic.com/ideas/archive/2018/10/the-cruelt...

> Or are they doing so to make the welfare experience shitty so people are incentivized to seek normal employment?

Yes, and to foment general distaste and dislike towards the welfare system, with the ultimate goal of ending the program. Related to "starve the beast" policy: https://en.wikipedia.org/wiki/Starve_the_beast

> And that's worse than poor people not being able to eat how?

Food programs are pretty widely supported. People don't want poor people not being able to eat, they want poor people not being able to drink alcohol/do drugs/play videogames/watch movies/..., the things they see as a fun indulgence.

That is, people are willing to make food assistance programs wildly cost-inefficient, based on the imaginary premise that poor people don't know how to prioritize, budget, or control their impulses.

And yet businesses still laid off people, people lost their job, homes and struggled to feed themselves.

propping up failed businesses is preventing the capitalism/the market from working. Why save for a rainy day or ensure your business can weather a storm when you can just do stock buybacks abs shovel money to the shareholders and the Goverment will prop you up?

It’s better to just ensure people’s needs are taken care of then this weird “trickle down middleman” plan that literally never works.

> And yet businesses still laid off people, people lost their job, homes and struggled to feed themselves.

The fact that people got laid off regardless shouldn't be an indictment of the program. We should instead compare to the counterfactual where the PPP program hasn't bee implemented.

i mean it sure seems like it is? if the intent was to prop up businesses that did not plan for a black swan event so people could keep their jobs.

>The government never seems to learn though

What makes you think that? It takes two to tango. Jon approve all these questionable requests/grants/loans say its too hard to manage, then since the watchers dont want to punish the watchers when they have you resign in "shame" there will be a cush CEO job with a ridiculous salary at a company you have no qualifications for.

Wont people ask questions about how someone incompetent got to such a position.........................

>The massive fraud that came along for the ride with PPP COVID relief is just the latest example

This happened because the Trump admin deleted the oversight of the program. The fraud in PPP was intentional. Democrats pitched it with oversight and accountability, republicans burned out the accountability, and of course everyone blames this nebulous "the government" instead of the ones actually responsible.

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