What Happens When the Poor Receive a Stipend? | Hacker News Reader

What Happens When the Poor Receive a Stipend?

opinionator.blogs.nytimes.com

181 pointsMaysonL154 comments

The researcher supposed that the reduced stressors in poor parents' lives allowed them to be more nurturing, resulting in reduced problems with their children. Seems like a no-brainer to do, considering this analysis:

"Bearing that in mind, Randall Akee, an economist at the University of California, Los Angeles, and a collaborator of Professor Costello’s, argues that the supplements actually save money in the long run. He calculates that 5 to 10 years after age 19, the savings incurred by the Cherokee income supplements surpass the initial costs — the payments to parents while the children were minors. That’s a conservative estimate, he says, based on reduced criminality, a reduced need for psychiatric care and savings gained from not repeating grades."

That means, its not only a good idea, its free.

Actually if you look at it that way, you're being "paid" to do it - and then you can use that new money for other things that are beneficial for society.

Correction: this is what happens when poor Cherokee receive a stipend, but let's not pretend that the Cherokee are the ones we're worried about here. There are differences between the subcultures, and those differences almost certainly extend to how they treat money.

Furthermore, the psychological and social difference between receiving money from a source which a population would consider to be 'theirs' cannot be overstated. If you're a poor black person (or latino, or Cherokee, or whatever), and you're living in a land that's dominated by a group that's not like you, you are less likely to respect that money than if a) that money came from a source that was yours, and b) you knew that if that source believed that you were disrespecting that money, they would cut it off.

Both stipulations apply here. Giving a small band of Cherokee profits from one of their own casinos =/= giving poor blacks and latinos federal assistance. They aren't even close.

Successfully repeating this experiment in poor black and latino populations a few times would go a long ways towards convincing the skeptical that free money for the majority of the poor is actually a good idea.

Anything else, as I said in another thread, is half-measures.

Here is a study that shows giving poor rural Indians a stipend. Positive results: http://mondediplo.com/2013/05/04income

You left out poor white people in your discussion. While white people do have a lower rate of poverty than blacks or latinos, they actually make up a very large majority (68.5% as of 2009) of the people living under the poverty line in the United States. [1]

"... let's not pretend that the Cherokee are the ones we're worried about here."

"Successfully repeating this experiment in poor black and latino populations a few times would go a long ways towards convincing the skeptical... "

I'm all in favor of repeating the experiment in whatever populations, ideally the general one on a large enough sample size to tease out demographic information. I don't want to seem like I'm implying something here, so I will instead say overtly that I find the way you've singled out certain populations for skepticism with regards to whether they should be helped disturbing.

[1] http://www.census.gov/compendia/statab/cats/income_expenditu...

Poor white people were left out of that comment because the writer's point was about minorities with access to a payment that didn't feel like "theirs". A poor white person receiving welfare from a largely white government/authority might not be a good comparison.

Forgive me for offending your politically correct sensibilities, but it seems that I'm going to have to be even more blunt: if you want to convince white people in this country that doling out free money to the poor is a good idea, you're going to have to convince them that blacks and latinos aren't going to abuse that system en masse. The only way to do that is to try something similar in neighborhoods that are comprised predominately of minorities and cross your fingers that it is a success. It doesn't matter whether those below the poverty line are 65% or 5% white - it's the minorities that they're concerned with. That's just the political reality of the situation.

And while we're on the subject of statistics, I may as well go ahead and ask about yours: where did you get that figure from? Because I found something much different:

http://www.census.gov/newsroom/releases/archives/income_weal...

According to this, only about 25% of people living in poverty were white, and that includes the somewhat dubious category 'white, not hispanic.' (It's near the bottom, Table B)

That also includes white retirees, which inflates the figure as you're taking the number of retirees from a large category and sticking them into a smaller category, which means they will be over-represented in the smaller category.

And that's not even mentioning the rate of poverty or welfare participation, which is where the common perception that blacks and latinos abuse the welfare system comes from in the first place. It's much higher than it is or other races. When you dig into the data, it usually turns out that stereotypes exist for a reason, and this appears to be no exception.

I don't believe those who have contempt for the poor have any less contempt for science, and social science in particular.

You could have probably gone with: a tribally (single culture or group) owned and operated business paying dividends to its members is likely to have different results than a welfare payment from a government where ownership is distant.

I'm actually fairly offended that people are equating dividends from a tribal business with welfare. It is a bit insulting.

Shocker: You completely misread the data from that source.

Table B in the link you posted shows 31,650* white people in poverty out of a US total of 46,180. That's 68.5%.

* all numbers in thousands

To be fair, he’s describing “non-black, non-latino”, which I suppose most closely aligns with “white non-hispanic” in that table: 19,599/46,180 or 42%. No longer a majority, but still a plurality.

The whole argument is ridiculous, of course:

> If you want to convince white people in this country that doling out free money to the poor is a good idea, you're going to have to convince them that blacks and latinos aren't going to abuse that system en masse. The only way to do that is to try something similar in neighborhoods that are comprised predominately of minorities and cross your fingers that it is a success.

When did we have the double-blind controlled study showing that the mortgage interest tax deduction wouldn’t be abused by the upper middle class "en masse" as a tax-protected store of wealth, contributing to a wildly over-inflated housing market?

Perhaps you can point me to the literature showing that carried interest being taxed as capital gains wouldn’t lead to wealthy fund managers being able to claim zero “income”?

Budget policy in the US (or anywhere, really) isn’t set by enlightened scientists who carefully consider the sociological and economic consequences. Voters and politicians are swayed by pundits and lobbyists, not by scientific studies. Get the right people to endorse an idea with the right (specious but superficially convincing) talking points and you too can help set public policy.

> When did we have the double-blind controlled study showing that the mortgage interest tax deduction wouldn’t be abused by the upper middle class "en masse" as a tax-protected store of wealth, contributing to a wildly over-inflated housing market? > Perhaps you can point me to the literature showing that carried interest being taxed as capital gains wouldn’t lead to wealthy fund managers being able to claim zero “income”?

It doesn't matter. Voters don't hate the upper-middle-class, and they don't hate fund managers enough to vote differently. And sure, it would be nice if the electorate were less racist (and I'd support efforts to change that), but in the here and now we want to introduce positive policies, and we have to do that with the electorate we have rather than the electorate we wish we had.

The right thing to do would be to test the idea before shoving it down voters' throats.

It would not only be morally correct, it would provide great ammunition for fighting against those who would be against it.

But that's not going to happen, because despite the rhetoric of the left, no one knows whether it would work or not, and a failure would be catastrophic for the left politically.

So we'll trudge on, doing the same shit, implementing the same policies not to fix actual problems, but to appease our consciences and to feel like we've won some kind of political victory against that evil other side.

The whole game is a farce.

Is it a shocker that I misread that table? Obviously, you meant that facetiously, suggesting that you believe that someone who espouses views contrary to popular liberal ideology is necessarily a stupid person. But the fact that I made a mistake no more means that I'm stupid than does the fact that I disagree with liberal ideology on many points; on the contrary, the fact that you believe it does says much more about you than it does me.

At any rate, the rest of my points stand. Now that you've pointed out my mistake, maybe you'd like to follow up with a quick 1-2 punch and knock the moron out of the ring, eh? Come on, it should be easy, right?!

> It's much higher than it is or other races. When you dig into the data, it usually turns out that stereotypes exist for a reason

You'll find blacks and latinos are overrepresented in all negative socioeconomic indicators. But I'm sure that they're all deliberately choosing to have die younger and spend more time in prison.

>if you want to convince white people in this country that doling out free money to the poor is a good idea, you're going to have to convince them that blacks and latinos aren't going to abuse that system en masse.

Alternatively, rather than attempting to convince them, we could educate them.

> if you want to convince white people in this country that doling out free money to the poor is a good idea

Based on the last presidential election I'm not so sure you need to convince white voters about anything: http://www.slate.com/articles/news_and_politics/scocca/2012/...

> Correction: this is what happens when poor Cherokee receive a stipend, but let's not pretend that the Cherokee are the ones we're worried about here. [...] Successfully repeating this experiment in poor black and latino populations a few times would [...]

I can't be sure what you intended to say here, but the message it sounds to me like you are implying sounds quite racist to me.

I DO care about poor Cherokee -- and poor humans in general. I have little reason to believe that any particular racial group would behave differently. You seem to be implying that blacks or latinos have a "different subculture" particularly in how they "treat money". I have no idea why you would believe this and unless there is good evidence to support it I would speculate it is probably just prejudice. I say that because, historically, essentially every one of the "racial differences" (especially the mental ones) that have been claimed have turned out to be baseless and untrue.

You also seem to be suggesting that there's a psychological difference between money received as federal assistance and money received from "one of their own casinos" because of considering it "theirs". That's an interesting claim. If true, then perhaps it suggests that a stipend program, if one were to be set up, would best be presented as if it were an earned entitlement or payout -- rather like we do with Social Security.

>every one of the "racial differences" (especially the mental ones) that have been claimed have turned out to be baseless and untrue.

You should re-phrase that to point at racist claims. There are quite a few differences between the races. Bone density is one example.

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1863580/

    > There are quite a few differences between the races. Bone density is one example.

Or, you know, skin colour, eye colour, hair colour and hair straightness.

You are correct. I should have said "nearly every one of..." instead.

(I want to avoid claiming that it's the racist claims that were proven untrue. For one thing, it begs the question: if they turn out to be true then I guess it wasn't racist after all.)

the psychological and social difference between receiving money from a source which a population would consider to be 'theirs' cannot be overstated

It can be overstated; you've overstated it. In contrast to the careful research described in the article, you've just made a bunch of stuff up. Your rush to assume race as the dominant factor is another example.

Do you know what the Swedes didn't have a problem with a decade ago? Welfare abuse. All of a sudden, they have a problem with it now. Do you know who are the ones abusing the system? Hint: it's not the Swedes.

Every other country which has accepted middle eastern immigrants in the last decade are experiencing the same problems.

If a population does not respect your system, they will abuse it, period.

If you can get over yourself for a second, I'm sure you'll be able to figure out why.

I got over myself... is it prejudice? Because I'm pretty sure it's prejudicial interpretation of whatever data or anecdote you're making vague reference to.

So, let me see if I have your position right: because some people will abuse a system that will improve things for many more people, we should not implement said system? Is that right? I think it is telling that you would rather not have one "type" of person benefit unjustly in the face of all of society benefiting greatly. Says more about your feelings about "types" of people than your willingness to participate in the heterogeneous society of modern civilization.

Remember, the perfect is the enemy of the good.

You have my position wrong.

You people suck at this.

How do I have your position wrong? Please enlighten me. Telling me I suck at "this" is hardly informative or constructive.

You indicated how a) this was a special case and that other types of people wouldn't behave similarly and that b) because other types of people wouldn't behave similarly this type of social policy shouldn't be enacted.

Yes? What did I miss?

Additionally, it is telling that you consider me to be plural. As if I am speaking on behalf of some sort of group that is "other" to you. Methinks, perhaps, you've caught the identity politics meme. You and I, we are not on separate teams, in different groups, or of a different type.

As a Swede I'm not sure there's any base for this claim, other than that we now have racist politicians who make populist statements like this one without shame, referring to cherry picked data at best.

Generally, if you're going to make racist statements, at least try to back them up with some data and/or source.

As a Swede, you're shockingly uninformed.

https://www.google.com/search?q=sweden+welfare+immigration&o...

Currently I am at a cafe in Thailand, hanging out with a bunch of swedes from diverse backgrounds. Just asked them bout this. Apparently, notdrunkatall, according to my Swedish friends, you are incorrect, and that the welfare system is considered a massive success in Sweden and that the immigration problem is seen as a minor, short term issue that right wing politicians make a big stink out of to get nationalistic votes.

The welfare system in Sweden IS seen as a massive success because it HAS been a massive success, and didn't have many serious problems because people respected it as a temporary thing, and receiving welfare came with a social stigma.

That is changing as a direct result of increasing immigration, and welfare reform is on the horizon across Europe, not just in Sweden.

Instead of asking them a loaded question in order to receive the answer that you want to receive, why not try asking them an unloaded question? Something like: do immigrants treat the welfare system differently than do native Swedes? Obvious answer is obvious.

But you've already said enough to refute your own argument: the immigration problem. It's a problem, is it not? And it's a problem because those people respect the system less than Swedes do, thus necessitating reform. It's not a major problem because the Swedes are proud of their system which has worked so well, with so little abuse, until just recently, and they're certain that they can figure this problem out as well before it gets too bad. But it is a problem nonetheless because, well, I'll just let you go back and read my original assertion.

How the fuck is it that a forum of supposedly intelligent people have such a massive problem with basic fucking logic?

As an alternative example to what happens when you give the poor a stipend, have a look at the government grant system employed in South Africa, and the absolute misuse and abuse that system is under.

I believe the South African example is a closer approximation to what a society would look like with a basic guaranteed income.

Do you have some links to sources?

I'll have to go search for some, I've only got my own experience :D. Give me a day or two, I don't mind getting some for you.

Ok I'm back. Just googling "South African grants misuse" will give you plenty of sources. I wont link the top results, but your more than welcome to look for yourself. The system is rife with corruption and abuse. Also of note is that about 2 - 3 million tax payers carry the burden of upwards of 12 million grant receivers. An unsustainable system collapsing under its own weight.

+1 for actually coming back, even if not with exact links. I must say that I find it hard to get a good picture from the links in a simple Google search, and your numbers seem weird. South Africa has a population of 50+ million, how do you end up saying that there are only 2-3 million tax payers? That makes no sense, given that typically everybody pays taxes, directly or indirectly.

My apologies then. Here are the links I had a skim through:

http://www.timeslive.co.za/politics/2012/05/25/social-grants...

http://www.sacp.org.za/main.php?ID=4121

http://www.iol.co.za/news/south-africa/young-moms-abuse-gran...

Please note the variance in the sources (even communist party :D ), so not really a biased picture. Everyone knows the grant system is being abused on a massive scale. Also the amount of people on the grant system exploded from 80 000 people receiving grants in 1998 until today's 12 000 000 people. And South Africa is not exactly a rich country...

As for my taxpayer statement, you only pay taxes if you earn above a certain amount. But it is a sliding scale system, so about 2 300 000 people are responsible for 93% of all the collected taxes, supporting 12 000 000 people. Not sustainable.

An in depth explanation: http://www.moneyweb.co.za/moneyweb-tax/less-taxpayers-than-s...

South Africa is a very close approximation of what happens when you impose decades of apartheid and then let a small elite class of blacks in on the fun without actually dismantling the inegalitarian economic system itself.

:) And how would you go about dismantling the inegalitarian economic system?

Convert natural resources into commons trusts and industrial concerns into workers' cooperatives.

And what about the current owners? The state can't afford to buy them out. Disown them? Massive loss of international trade and investment trust as could be seen with other african countries (Zimbabwe is the most prominent example).

That is an overly precious view of money. Do poor Cherokee with starving kids care where the money comes from? If they do care, does it change anything? Do we leave kids suffer because some rich folks care about what they're thinking?

The fact is, the 1st attempt worked stupendously well at alleviating a critical problem. Further study will likely cause real delay and suffering, and is an excuse for inaction indefinitely.

Id be interested to see if even better effects would be realized if television was cut off from a group like this for a generation or two.

Why did the parents of these poor kids do a terrible job of parenting before the stipend? They were drunk half of the time (literally 10-12 hours per day). They drank mostly because they felt sorry for themselves. Why? they felt disadvantaged and envious, they were basically pouting. Why? because their lives were not like those they saw on television. Also because they had "learned" by watching television that they were poor and worthless and could never get a leg up in the white country they lived in. Once they started getting money and buying more worthless crap from Walmart, they felt like they were keeping up with the Jones' thus they felt less sorry for themselves and drank less. The rest is self explanatory...

Simple really.

This is the truth, Self pity is the biggest enemy of the minority. Nothing does more to promote this than The visual media. How do I know this is true? because my wife was one of the children in this story. She and her family told it to me long before I read it here today.

>Self pity is the biggest enemy of the minority. Nothing does more to promote this than the visual media

Politicians who seek to exploit racial groups by scapegoating them and promulgating stereotypes do a pretty good job too.

Could it be that it's primarily the feeling of being stuck, of not being able to move ahead, that causes this self-pity and self-destructive behavior?

I've found in most of my interactions with people, including the very poor, the feeling of control, the feeling of being able to shape your destiny, is what differentiates those who remain poor from those who work their way out of it. It differentiates those who spiral into depression or addiction from those who don't.

Alcoholism, self-pity, and/or ridiculous amounts of television watching are a problem, but seem to be a symptom more than a cause.

I was not referring to the amount of time being wasted on television. If this were the case I would have mentioned video games as well as half a dozen other things.

The question is this. Why are people in the US wealthier then they have ever been, yet they act poorer and more depressed than ever? Comparing quality of life access to education and health care and relative wealth, "poor" people today would be considered in the middle (or even upper middle) class during the first third of 19th century. They ARE considered upper class compared to the majority of the people in the world today. Why they are they the laziest and have far more self pity then the fore mentioned groups?

The answer is that they FEEL disadvantaged and lacking opportunity relative to what they perceive as "everybody else". They FEEL helpless and hopeless. But this is really an illusion. This perception is formed mostly by watching visual media (television, movies, news ETC).

See really the stipend is a bailout of sorts. Something causes them to pity themselves (the false reality of media), and the money causes them to feel better about themselves. More aligned with that illusion.

What i am saying is - rather than a bailout, I wonder if just eliminating what caused the problem in the first place would be even better. I know that this is a fantasy because you can't just tell people to stop watching television.

The television thing is really just a symptom of a larger problem though. The main problem is the loss of Christianity and family. Even atheists cannot disagree with the fact that every legitimate study ever done about those with a strong belief in God concludes that they are harder working, far less depressed, commit far less crime, and stick with their spouses more ETC. (the same types of thing that this stipend seemed to help with). Take that away and of course there will be a big difference in crime, employment, divorce rate ETC. and how that affects future generations (the kids).

I completely agree with you. Having spent a lot of time in a developing nation and one of the wealthy nations in the world, television and 'comparative wealth' are only a piece of the puzzle. Family plays a huge role, as does 'locus of control'.

So many people I met were very happy having a huge extended family, close ties with neighbours, and some scrappy shop that was just an extension of their home. Happier than most of the affluent managerial class I interact with on a daily basis nowadays. And yet they had televisions on, 24/7, that broadcasted this wealth. It affected them, and many were lured to a life they hoped would be better, but clearly it wasn't the decisive factor in their level of happiness.

I'm still very much trying to figure out how this works, but my deeply conservative Christian background often seems to provide answers, however uncomfortable that realization makes me at times.

This idea was explored a bit more thoroughly in an episode of This American Life

http://www.npr.org/blogs/money/2013/08/16/212645252/episode-...

They discuss and question the validity of the very deeply held belief that if you "give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime."

While its very hard to argue with this logic, and it seems so true and obvious, it also implicitly assumes that the poor are poor due to lack of education, rather than due to lack of money.

I can't defend GiveDirectly or stand by any claims made on either side, but apparently the results they're achieving is some evidence that the poor really do just need some seed funding to launch from, much like startup companies need inital funding in order to launch.

One thing I'm sure of, whether you're poor or trying to start a company is that its very hard to start your virtuous growth cycle without a little money.

This is really interesting stuff. I know they touched upon it but these studies, if they really want to change things, need to do a much better job of showing an "ROI". Too often these studies seem goaled around showing that poverty has a negative impact and assume the logical next step is so we'll address that. However, many people don't have an issue with others being in poverty; particularly if they believe they're being asked to have to take anything out of their pocket to solve that problem.

Generalizing; those that are against wealth redistribution aren't going to be convinced otherwise based on the decrease in mental illness amongst the poor or higher grades in school. The numbers around the cost of someone spending a year or more incarcerated is well known. The cost of a transfer is well known. IF you can show "You really want to ensure that a family of 4 has this much coming into the household to ensure it doesn't cost you much more later" then you could go a long way to bringing new supporters into the fray.

No. Most staunch opponents of wealth redistribution oppose it on principle, not practical terms. You can tell them in very concrete terms that their tax dollars will benefit them more than it would hurt them and their reply will be, "Well, then you should let me distribute my money that way instead of taking it and doing it yourself."

>" Most staunch opponents of wealth redistribution oppose it on principle, not practical terms."

Please provide a citation for this claim, I have not seen any evidence either way.

http://en.wikipedia.org/wiki/Taxation_as_theft

The post to which I replied said "[m]ost staunch opponents", not 'some opponents'; I would like to know where the 'most' comes from.

So... what's your point? You seem to be making a semantic argument, to what end?

Sometimes there's not a germane statistic and you might just have to go off of your own lived experience.

>>> Most staunch opponents of wealth redistribution oppose it on principle, not practical terms.

Actually, most people don't like it because they've seen how the government "redistributes" their money and most of the time it's wasted.

This is why religious institutions tend to get so much in donations. People trust their church more than their government.

Define wasted. Was it burned? Unless you are talking about military expenditures, which have some of the lowest economic multipliers, it paid someone's salary, who in turn went and participated in the economy. Was it ideally spent? No, but read some Edward Denning: you can spend more money ensuring that only the right people get money or you can just wrote checks and accept statistical levels of error.

Uh, just Google: "Wasteful Government Spending" and you'll find a few gems like this:

http://www.policymic.com/articles/48003/14-ridiculous-ways-t...

"Gitmo detainees also have a soccer field funded by American taxpayers. Don't worry, it only cost $750,000 to build."

"The federal government pays pensions of deceased employees, costing $120 million. According to the Huffington Post: "One man, whose father died in 1971, continued to receive payments until 2008 when he himself died, costing the government $515,000, according to the report."

"According to Senator Coburn's 2012 "Wastebook," in 2009, the U.S. Agency for International Development (USAID) implemented a plan "to improve the economic competitiveness of Morocco" costing $27 million"

"$516,000 of your money was spent to make a video game providing taxpayers with the opportunity to relive prom."

Arguably, still not actually wasted. Went back into the money supply, bought goods and services, contributed to the economy.

Seriously, unless you have truly minimal savings rate like the dirt poor, when you pay taxes you are doing one of two things: building infrastructure or boosting the economy. Surely your taxes COULD be better spent, some government expenditures have higher economic multipliers than others, but wasted? You don't understand economics.

> Well, then you should let me distribute my money that way instead of taking it and doing it yourself."

And AFAICT, the US tax code is at least half decent about recognizing charitable giving -- that is, letting people distribute their money that way or other ways -- as a legitimate offset to a personal tax burden.

Possible it could be better.

It looks to me like we don't see a lot of personal stipend style charitable giving, though.

(There's a significant presumption in the phrase "my money", but that conversation usually goes about as well as threading the proverbial camel through the eye of a needle, probably for much the same reasons.)

I'm not sure that is really the best group to target though. The people who are simply against any redistribution, full stop, even if it works, are a minority in most countries and probably not necessary to a political coalition to do something about poverty.

A pretty large group, however, are people who think that poverty-fighting schemes would be good in principle, but they are skeptical whether such schemes work in practice. A common criticism is that what seems like a good idea ends up backfiring, is abused, produces dependency, etc. Many economists are in that group, of people who would support a poverty-reduction scheme if they thought it worked and didn't cause larger problems. I see that as the class of objections that these studies are looking to corroborate or refute.

Yes it's that second group I'm thinking of here. Show them that over an x amount of time period these programs resulted in Y and you might make more advances.

This is a nice theory, a narrative that might be difficult to prove in practice, however.

On a more meta-level, though, people's political opinions influence their interpretation of statistics, so even if you did prove this ROI, cognitive disonance will fight you extremely hardly. Instead of trying to convince people who are against any form of wealth distribution, it's 1% as difficult to convice the people on the fence (of whom there are also 10x more) , those who are ok with some distribution, that this is a pretty effective replacement/complement for current services.

I'm always surprised people yell about the U.S. not wanting to help those in poverty. I think that's pretty well refuted by noting that the U.S. is #1 in charitable giving [1]. The bigger problem seems to be people trusting government imposed redistribution schemes rather than the rejection of them altogether.

[1]http://www.huffingtonpost.com/2011/12/19/world-giving-index-...

The are all sorts of ways to measure aid. Have a read of this if it interests you. I stumbled across it while looking to see if I could find a $ given per head of population graph I saw a while back. I didn't find it. http://kriswager.blogspot.co.nz/2007/03/is-usa-biggest-forei...

> I think that's pretty well refuted by noting that the U.S. is #1 in charitable giving [1]

After browsing the PDF, it seems to not account for many things. No idea why you think it is 'well refuted'. E.g. It does not account for higher taxes, which are funneled to help the poor. It also seems to count everything binary, either you helped or you did not. No mention is given as to how much time/money you actually donated - and to whom.

Additionally, weighing all three things (giving money/helping strangers/volunteering time) the same is rather odd. The us is #10 at giving money. And this does not even include taxes! Way to fight poverty.

If it weren't for the dubious 'helping a stranger' the US would not be anywhere.

The US is #1 in charitable giving because it's so easy to get a tax deduction for doing so. If people had to give out of their after-tax income I suspect you'd see a quite different picture.

That's a pretty cynical viewpoint & doesn't account for the fact that other countries do or may have similar type tax laws.

Can you provide some sort of proof of causation for your theory?

That's not true. I have the experiences of having prepared taxes professionally and counting and reporting donations at a church. By combining those I can observe that the majority of donations are proportional to income, not whether the donator can fill out a Schedule A. (The ability to fill out a Schedule A and deduct donations essentially depends on whether the taxpayer has a mortgage, for middle class.)

It's not exactly a tax deduction though... In the UK, for example, charitable donations are 'tax free' effectively, since the recipient will recieve an extra amount based on the marginal income tax rate you are paying. The only beneficiary here is the charity, and only if you make an explicit donation from your after-tax income. It's not like the government is allowing you to choose to redirect the tax you're due to charity. In the US, I believe the situation is similar.

It's different in the US:

'The taxable income of the donor is reduced by 300 USD. If the donor's income was in the 35% income tax bracket both before and after the deduction, the donor's tax liability (amount of taxes owed to the government) is reduced by 105 USD.'

http://en.wikipedia.org/wiki/Charitable_contribution_deducti...

In theory a donation of $1 in the US is exactly equivalent to a donation of $.70 or so in the UK. But psychologically it seems that people are much more willing to donate more and get money from the government.

(The other thing I've wondered about is how much of the US's charitable donations are simply tax fraud).

Except that the plurality of U.S. charity goes to religious charities.

Charitable giving for health, education, and human services accounts for only 33% of all charitable giving in the U.S. How much of that goes to programs designed to address poverty is debatable.

Source: http://www.alysterling.com/documents/GUSA2012ExecutiveSummar...

>>>>> xcept that the plurality of U.S. charity goes to religious charities.

Who actually do quite a bit of good with it:

"We should start by noting that Catholic charity work is extensive and widely considered a crucial part of the nation’s social safety net. By itself, Catholic Charities USA, has more than 2,500 local agencies that serve 10 million people annually, said Mary L. Gautier, a senior research associate at the Center for Applied Research in the Apostolate, an institute at Georgetown University that studies the church."

"Meanwhile, Catholic News Service has noted a few other Catholic organizations that made the Chronicle’s annual 400 list, including Father Flanagan Boys Home and Covenant House. This excludes Catholic universities, which mainly provide higher education; hospitals, which are categorized separately from social services; and groups that focus on overseas work."

source: http://www.politifact.com/truth-o-meter/statements/2013/mar/...

Considering they put out close to 4 billion every year in charity, it's hard to argue they don't help the impoverished.

That doesn't really refute my point at all. Catholic charities devoted to human services are counted under human services.

I'm not sure where I said religious charities don't help people. They most certainly help members of their respective congregations. But they also can do a lot of harm, like you know, oppressing people by opposing same sex marriage, or pretty much anyone who doesn't share their religious beliefs.

Since we're focusing on catholics, what good is done by denying all of your employee's spouses insurance coverage, just so you don't have to extend the benefit to people in same sex marriages? http://www.washingtonpost.com/wp-dyn/content/article/2010/03...

Wow - I don't even know where to start. . .

>>>>> They most certainly help members of their respective congregations.

You missed this part of the article:

"In 2010, Catholic Charities USA reported expenditures of between $4.2 billion and $4.4 billion, according to the Chronicle of Philanthropy, which publishes an annual list of the 400 biggest charities in the United States,"

I'm pretty sure NONE of that is going directly back to congregation members. It's charity, which means it's earmarked for other people who need it more than the church does. I spare you the biblical quotes, but that's why they do it, it's part of their religion and belief system.

>>> But they also can do a lot of harm, like you know, oppressing people by opposing same sex marriage, or pretty much anyone who doesn't share their religious beliefs.

>>> Since we're focusing on catholics, what good is done by denying all of your employee's spouses insurance coverage, just so you don't have to extend the benefit to people in same sex marriages? http://www.washingtonpost.com/wp-dyn/content/article/2010/03....

Unreal.

I'm not going to take your bait troll, but nice try.

No I didn't miss that part. Like I said religious charities devoted to human services are counted towards human services in the source I posted. My source counts charities as religious if they identify their cause as being for "Religious Activities" or "Religous Media and Broadcasting"

I'm not trolling. I think religous charities do a lot of good, but I think they also can do a lot of harm. I think it's ridiculous to suggest that private charity will solve everything when the majority of that charity goes to religious Charities who have a track record of oppressing those with different beliefs.

Your not trolling but you have a fixation that religious organizations are bad and therefor anything they do must be discounted.

For what its worth, not supporting is not always the same as opposing. Religious charities have stepped in in many cases well before any government agency has and they usually offer their help without "clauses" and "rules" that come with other forms of assistance.

Did you read my post at all? I'm pretty explicitly not talking about all religious organizations, but rather religious charities, and like I already pointed out:

'My source counts charities as religious if they identify their cause as being for "Religious Activities" or "Religious Media and Broadcasting"' A small fraction of that would be the 400 million dollars spent lobbying by religious groups every year, you know lobbying to restrict women's rights and against same sex marriage.

10M annually, or 3.3% of the US population. Religious charities are great, but they're not a substitute for a national safety net.

I'm always surprised people yell about the U.S. not wanting to help those in poverty. I think that's pretty well refuted by noting that the U.S. is #1 in charitable giving.

Pah.

There's no way that you can assess a how well a society helps its poor simply by looking at one metric (like charitable giving) alone. It's just silly, on the face of it.

This is good evidence to support a guaranteed minimum income: http://en.wikipedia.org/wiki/Guaranteed_minimum_income

Or a basic income: http://en.wikipedia.org/wiki/Basic_income

GMI is typically means-tested, which can mess up incentives.

And means testing adds to administrative overheads too.

True, but probably less than would be disbursed to those excluded by means testing. If it had no other downside, it might well be a good idea.

The outfall of WWII could perhaps be considered one of the largest instances of "stipends" (both domestically for the U.S. and overseas) ever perpetrated.

The outcomes, from my perspective, were "not so bad".

From my perspective, the question can be broken down to two points or serial steps:

1) Do people have the resources to take care of and improve themselves?

2) Do they use and apply those resources well?

Without 1), you can't have 2). And research appears to be showing that, given 1), people and extant systems are or can actually be pretty good at getting 2) right.

Otherwise, it seems to come down to poverty as the reason and excuse for perpetuating poverty. (AKA they -- or/and we -- aren't capable of any better. (And in some cases, don't appear to want any better -- "my, me, mine".))

I, for one, am not willing to accept and settle for such a perspective and approach.

Well said. I think there are valid arguments on each side. What, to me, seems to hold back a lot of healthy discussion is a reliance on anecdotes by both sides. It is very easy to assume that if you give an alcoholic father some money, he will spend it on alcohol. I am sure this is the case in some situations, but I think your point about applying resources well, especially when children are involved, is critical and true.

I'm not exactly sure where the meme of giving a minimal guaranteed income came from (and I only mention it because this seems to be along the similar lines). However, it is worth noting that income inequality has as much to do with the middle class as it does the poor.

I'm not exactly pro-union as they tend to outlive their usefulness, but in the absence of something similar, the average employee basically gave up their bargaining rights probably decades ago and since then the people at the top who know how to bargain are getting ahead faster than anyone else.

I don't know if a guaranteed income for the poor would help out a lot and I don't know how you would even pay for such a program. What I do know is in a consumer driven economy, more money is made by all if people are spending it, and the people at the top who get paid the most just don't spend enough to keep things moving up and to the right forever.

I do agree with the idea that somehow people lower on the economic ladder need to get paid more and that would benefit society as a whole. Heck, even Henry Ford seemed to understand that point. Somehow, that notion has been lost on modern society and I find that to be somewhat sad.

Give a man a fish, he will eat for a day.

Teach him to fish, he and his family will eat fish the rest of his life.

Give a man a consistent supply of fish and maybe, instead of fishing all day to feed his family, he could go to trade school and learn to be an HVAC engineer, send his kids to MIT and retire at 55 to Naples Florida.

I should point out that not all state compacts with tribes that enable casinos allow for direct payments to tribal members. This is generally done to "allow the money to go into social programs", but it generally increases corruption to some amazing levels.

Correct. In WA state they force the tribes to spend it "within the community," which ends up as huge hotels and other ridiculous expenses that don't help the poor members of the tribe.

I live in WA and I don't understand why local city casinos are choked, but we allow some specific groups to run casinos 30 minutes away by different rules. How is it making any sense? Lets run casinos on the same enabling rules and get taxes back to communities. The situation now is that members of all communities play, 3 communities pocket the profits.

Because your ancestors signed a treaty taking all the other land but that spot that gets to run differently. It probably still is a good trade.

Well... my point was a bit different. WA state grants tribal casinos better licensing for gambling as well as other breaks, but X% of the profits must be "re-invested" into the tribe by law.

Although the tribes by and large fund education, medical expenses, and other stuff rather well, it still leaves a huge surplus of money they are forced to spend on community "reinvestment." And that's how you get the ridiculous Tulalip hotel, and there's tons of outrage at the tribe for this - when in reality the law is forcing them to spend it.

Are you talking about hotel on top of the casino? Why is it ridiculous? It seems like natural and good business development for casinos to have hotel near by. Or are they pissed about funds reappropriation back into business instead of being spent on community needs?

As a weird startup parallel: As a bootstrapped company, you make very very different decisions than you would as a company who has even the tiniest bit of runway. I imagine (not to trivialize poverty) things would be similar. Instead of seeing bigger picture, you're trying to figure out how to pay the bills already owed, etc.

Another restatement of the obvious. Hopefully the studies' data will help convince people once and for all that:

MONEY matters a lot, in all aspects of life: it makes people healthier (both physically and mentally), improves actual/usable creativity and intelligence, leads to better education and better social webs, ESPECIALLY when coupled with MORE FREE TIME (yes, it matters a lot that the Cherokee that got that money didn't have to spend more time working in order to get it).

Doing what you love matters, but until a certain wealth threshold, being better compensated for what you do (whether you like it or not) and having enough free time, matters more (an no, people that get more by working more don't get all the benefits of that "more" they get, it also matters to "get more by giving less").

The problem with this, I think, is that people will quickly forget about the bad conditions that created the need for the stipend and only see the people using it for drugs. Politically, this works out to 'unfeasible'.

After all, isn't this almost exactly what food stamps are? Technically not a stipend, but they're pretty readily converted to cash on the secondary market.

Australia has the equivalent of a "stipend" for poor, unemployed, students, single parents, etc. Plus free healthcare for everyone.

It is a hugely successful program with a very low percentage of exploitation (i.e using the money for drugs, or contributing to unemployment rate). It has been constantly tweaked for the last 20 years.

You don't need to look at obscure tribal examples within America, you can just look at Australia (a very similar society to the U.S) to see this is a good policy with extremely positive outcomes for society.*

* I'll caveat this with, if you can afford it. Australia is in a super good position with regards to it's GDP/Capita and has been for the last 20-30 years, so it's difficult to say whether this is sustainable in the (even) longer term, or in countries without the same advantages.

"You don't need to look at obscure tribal examples within America, you can just look at Australia"

You need to look at all the data you can reasonably get. There are a lot of similarities between the US and Australia, but there are certainly differences. The more unrelated tests of the idea we get, the more confident we can be that our conclusions generalize.

Sure, agreed. I guess I meant: Australia would be a more useful comparison.

The healthcare isn't free no matter how many times you people say that.

But you're also wrong about Australia being "a very similar society to the US". Maybe at one time, but Australia has some very authoritarian laws these days - from gun control to internet filters, etc..

Healthcare is free in that anyone anywhere can go to a hospital with anything and be treated for it without paying anything. (And everyone who earns enough money pays taxes).

You really want to argue that healthcare isn't 'free'?

Gun control isn't 'authoritarian' it's sensible. Only with a screwed up U.S agg-prop point of view could you construe it as 'authoritarian', there is no mention of guns as a "right" in any of Australia's (or almost every other country in the worlds) constitution or case law... So could you justify how you came to your point of view?

There are no active internet filters in australia... Though there is talk of them, and some ISPs filter stuff... Do I need to remind you about Wikileaks getting it's Amazon servers shutdown... Even if there was a filter in Australia, it would be 'closer' to the US not further in similarities.

Did you mean "agitprop"?

It's been a while since I've seen that. Thanks for the belly-laugh.

Australia is very authoritarian. They actually confiscated the guns. not just made them illegal. They threatened law abiding citizens with prison time for not turning them in.

Here http://rense.com/general81/ligun.htm when other authoritarian regimes have confiscated guns.

Not only that, but crime went up in Australia. Obviously the criminals didn't turn in their guns.

Australia also makes it mandatory to vote. Any kind of forced action like that is very authoritarian.

They made it illegal to own (certain) guns, then offered a buy back scheme, then they confiscated guns from those that didn't bring in... This works much like how 'drugs' are illegal, and the police confiscate them, so the U.S is just as authoritarian (but with drugs) in this regard.

Gun crime reduced dramatically, though when categorised as violent crime, the reduction was smaller and overall the crime rate has decreased year on year... so I don't know what you are referring to.

Mandatory voting is 'authoritarian'... are you kidding me? It stops 'vested interest' or disenfranchisement of portions of your population, and moves closer to real 'universal suffrage', I can see there is valid criticism in arguing it impinges personal freedom, but authoritarian again just seems you are pushing some odd right wing agenda here.

Compared the the U.S, Australia sits well and truly to the left, but the similarities I was referring too, was about the make up of the populations, Australia is a good test case (for the U.S) for assessing policy outcomes, especially when Australia has implemented said policy and has strong correlative outcomes.

You seem to have derailed the thread some-what with your propaganda and pro-gun agenda, which I have sadly fallen for.

My original point stands.

Mandatory voting is more democratic. The US should do the same.

What does mandatory voting mean exactly?

Can I still vote invalid?

What ist the punishment for not voting?

You have to show up (or post) a vote, there is no requirements on your actual vote (it can be completely blank, or a picture of ponies... but you have to put your bit of paper in the ballet box (or postbox)).

Punishment for not voting is usually a fine. Though encouraging people not to vote or to post invalid votes (i.e. subversion), can carry jail terms of up to 12 months (from memory).

Healthcare is free if:

* you need emergency care and make your own way to a public hospital

* you're prepared to wait for a non-essential treatment

* you see a bulk-billing general practitioner

* you earn enough such that the cost of medical insurance (plus out of pocket expenses if you do need treatment, making this calculation tricky) is less than the dollar value of the additional 1.0 to 1.5% tax you would otherwise pay as a Medicare Levy Surcharge. (Ballpark figure is >$120k individual or >$200k as a family)

Only in the distorted, leftist mindset are things free because they just happened to be paid with taxes.

I hate that I'm falling for this[0]

For the poor, (i.e those that earn < 28k in Australia)... they pay no tax. Thus Healthcare for them, is in every sense of the word: free.

For those that earn > 28k, they pay tax, which a portion of goes to healthcare. So from 28k to probably (random guess) about 70-100k, healthcare is heavily subsidised. For 100k - 200k healthcare costs probably about as much as it would if they just paid for it themselves (given the wealthier tend to be healthier). The 200k+ they are probably paying more for it than they use.

But those who need it most (i.e the poor/poorer) get it free/subsidised.

This is called a progressive tax system. If your care about the majority of your society (keeping in mind, in australia the mean wage is around the 50k mark), then it is without a doubt a better (utilitarian) solution.

[0] http://xkcd.com/386/

Only a distorted, rightist mindset interprets ``free healthcare'' as meaning ``healthcare magically appears from the sky'' rather than ``you can walk into a hospital and get treatment without having to pay a bill afterwards''.

"You don't need to look at obscure tribal examples within America, you can just look at Australia"

Since the tribe is paying a dividend from a successful business to the owners of the business and Australia is transferring money from tax payers to "poor, unemployed, students, single parents, etc.", I do not see how they are equivalent in the first place.

The tribal members are being paid for something they own.

As Australians I think we should acknowledge that life is still pretty grim in many remote aboriginal communities here. Massive rates of preventable disease, low life expectancy, illiteracy, high domestic violence, drug and alcohol abuse etc etc.

Lots of reasons for this of course and I don't know how services could ever be made as accessible to remote communities as they are in our cities. But I think it shows that the availability of a "stipend" clearly isn't enough.

From Milton Friedman, archmage of conservative, supply side economics: http://en.m.wikipedia.org/wiki/Negative_income_tax

I would think one of the important elements here is that the sample is so small, allowing for less fraud and less room for overlooking errors in the payments. I think the effects would be similar on a larger scale, just as a guess, but the "headline making" fraud and mistakes would draw more negative reaction than they should.

One thing that happens is that conservatives pitch a hissy-fit.

I read through a lot of the comments so far and they expectedly turned into a stream of educated opining for and against the validity of stipends for the poor. Although many points are well said, do they really matter? Seems like the fundamental point is the ongoing lack of experimentation around poverty alleviation that leads to a Duke researcher only having a small Indian community that she has been studying who then gets a casino to be the only opportunity to see potentially innovative policy initiatives.

I'd love to see block grants distributed to states for a competitive process of poverty reduction (or pick any another long term social cost) where such experimentation could become institutionalized and there'd be a lot more to talk about.

This. Every libertarian has some anecdote about a lazy poor person driving a lincoln navigator on food stamps and every democrat has an anecdote about some old lady shivering at a bus stop with starving kids.

What we need here is science! We're in the stone ages stil.

Every time a sociological or economic scientific study hits the front page of HN, there are people who try to argue against it based on one or two anecdotes, often second- or third-hand even. It's so silly.

I wonder what would happen if you gave a stipend to kids with a high IQ, just take a test monthly and get a bit of cash no questions asked. They could eat and support their family or wahtever. start a business with it. Also would motivate them to study hard.

Steve Jobs was supposedly given a few dollars in exchange for performing his schoolwork, by one of his teachers. Could that have had a positive effect on establishing a virtuous cycle of hard work for him?

The problem with this idea is that in general, smart kids come from smart parents, and in general, smart adults earn more income (and thus are less in need of a supplemental income)

The problem with your analysis is 'in general'.

There are a lot of kids who fall into the Mariana trench size cracks of 'in general'.

"In general" is good for macroeconomic proposals - I'm saying if you give money to all smart kids, it would end up on average transferring money to higher income families.

It's sad that long-term programs just don't happen. And if they ever do happen they don't survive forever due to "austerity" measures.

FYI: View with JS turned off to avoid the paywall overlay and stop the article from disappearing.

I have a sever problem with equating what is a dividend from a group owned business with welfare. It is insulting in the extreme. There is a sense if ownership that is not present in our welfare system.

> Today, more than one in five American children live in poverty.

Wow

Someone, put it on the pastebin please!

View page source.

Just copy the URL and paste it into a Google Chrome Incognito Window.

Another cherry-picked study that will be refuted in the coming years.

What happens when you distribute money: it dissipates and poverty for all results.

But don't take it from me, Comrades!

Why do we even need to ask what happens when the poor receive a stipend?

Go look in the inner cities. Go to the rural communities and find a trailer park. It's happening now. What has the result been?

Not clear what you mean by "It's happening now." What's happening?

Welfare, food stamps, Social Security disability

Those are not nearly enough for someone to exist out of the pit of despair.

Obviously someone against these services will probably think it's too much. Welcome to politics

Those three programs are, in most cases, barely enough to live on, especially not to live comfortably. Even if you make good choices, being on welfare and food stamps still provides you almost no opportunities other than getting as many minimum-wage jobs as you can.

You're talking about programs designed essentially to keep people alive and nothing more; to prolong life for its own sake. Minimum income is a way of ensuring that people can remove the stress and worry of being constantly broke and hungry so that they can focus on bettering their lives - going to school, choosing a good job, being able to afford a car, feeding their kids proper meals, and so on.

There is no comparison between the minimum subsistence that welfare provides and the programs that are being discussed here.

Food: The SNAP program spent $76.4 billion in 2013. The maximum amount that a family of 4 can receive is $632/month.

Other: The TANF program spent $33.3 billion in 2013. Maximum benefit for family of 3 in California is $702/month.

Housing: Section 8 Housing Choice Voucher Program spends somewhere around $17 billion per year to provide housing. The maximum voucher that can be received is $2,200/month.

Education: K-12 Public schools are free with free lunches for the poor. Depends on the neighborhood how good the education is.

Pell Grant: The program was appropriated ~$36 billion to award in 2011. Most recent maximum benefit per year was $5,645. Max number of years is six. 6 x $5,645 = $33,870.

In addition, to these benefits if a family does earn an income low enough to qualify for these benefits another benefit is not having to pay taxes. There is a 10% tax on the lowest bracket but it is returned in credits and deductions thus moving the effective tax rate to zero and if the W-4 is adjusted the taxes that will be taken out are almost nil.

If a family received half of the max for each of the items above they could for five years receive ~$1700/month plus Pell Grant money to go to college. After 5 years, TANF is no longer available.

>Those three programs are, in most cases, barely enough to live on, especially not to live comfortably.

So was the stipend in this story. 6k per year, then later 8k? who could live on this

How many people do you know personally who rely on those things to survive? I don't mean people you've met, but people you've grown up with, friends, family, schoolmate, etc. — that sort of thing.

For example, can you name three people you know who have applied for social security disability? How likely is it they'll qualify for it? How long does the process typically take? Who do they have to convince and how?

Apply 3 times and you get it (disability). The amount of people on disability has exploded in the last 15-20 years.

http://apps.npr.org/unfit-for-work/

Dependence.

Turns out that when you incentivize something, you get more of it. Who knew?

In what conceivable way do the people in a trailer park in a rural community receive a stipend? Your argument is incoherent and lacks a supporting argument.

There is a lot of reporting out there about how in poor rural communities there are doctors who basically give out diagnosis for disability or mental illness on less than factual medical grounds that qualify people to receive government benefits from, for example, the Social Security disability fund. The OP is asking what the difference between the thinly veiled fraud that is going on now is and giving a stipend when the net effect is that these people are receiving regular payments from the government.

Edit: NPR did a story on it, it isn't my assertion there is actual evidence that this happens; http://apps.npr.org/unfit-for-work/

So, bootstrappy and savvy entrepreneurs disrupting the established system to their advantage?

Because when a business skirts or even outright commits fraud against/tramples on regulations, HN tends to cheer about how the regulations had it coming. And what you are asserting happens is no different.

The point is it doesn't work anyway.

Generally when HN cheers someone skirting regulations, it's because the person/company is doing so to produce something of value rather than to avoid having to work.

Actually, if you read more articles about the doctors putting people on disability, it is far more nuanced.

When there are no jobs in the area, you don't have an education, and you don't have enough money to move, what option do you have? There are places in Alabama where 3/4 if the population is on disability; this is not because they are disabled, but because they have no other choice.

The difference between disability and a stipend is that you lose disability benefits the minute you engage in any productive activity, whereas the stipend dispersed by the Cherokee tribe came with no such conditions.

Unsurprisingly, people who are not prohibited from improving their lives tend to live better.

You seem to have an overinflated estimate of how many people are able to qualify for cash stipends from the U.S government.

Oh my. You do realize that "giving a stipend" is not a Yes or No thing right? It's the size and type? "I have no idea why the man died under my care. I fed him 100 grains of rice every single day for the last year"

I agree, we should cut tax incentives and rebates to massive corporations. The need to stop enabling them is imperative.

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