Introducing Fiddler: Paging Charles Dickens

by Doctor Science

Your ObiWi front-pagers are doing some re-shuffling, again, as various people find they have less time for blogging than they'd hoped. I'd like to introduce a new candidate, "Fiddler", and her first post.

I've e-known Fiddler under another pseud for years (since before the '04 elections, IIRC) -- she was long one of my main sources for news and links on politics, energy, art, feminism, and interesting stuff. She lives in the DC area, very broadly speaking, and has worked in the newspaper business (when there was one) and politics. She's also a musician (guitar, cello, fiddle), hence the choice of pseud for Obsidian Wings. And of course, there are cats.

In terms of the political landscape, Fiddler is on the lefty side (as am I, of course), but with a *really* solid understanding of the nuts & bolts of policy -- much of what I know I've learned from her. Give us your usual forthright yet civil feedback, and we'll see how this works out. Herewith:

---

Paging Charles Dickens, by Fiddler

Back in the 1980s, I spent a time working for a daily newspaper in a small city in New York state. The newspaper was part of a media chain owned out-of-state, and the pay scale was set for the other state, which didn't have New York's higher taxes. Because of this, as a single working person, I was qualified to receive government assistance for food in the form of free cheese and other occasionally available food products. I won't deny it came in very handy at the end of the month, particularly in midwinter with sub-zero temperatures and high heating bills. But at the next desk, the reporter was a man who made the same money I did and who was married and had children. He and his family were on food stamps in order to keep food on the table all the time, although he, like me, was working full-time. In a different industry, we might have been able to work overtime to make up some of the difference, but according to company policy none of us were allowed overtime except on election night, which didn't pay for a lot of groceries.

It's no secret that use of federal food stamps, also called the Supplemental Nutrition Assistance Program, is a sign of economic hardship. What is not always understood by people unfamiliar with the program is that food stamp use is restricted to certain kinds of food and little else. It doesn't cover toilet paper, for example, or soda. A Florida man receiving food stamps recently turned to robbery in order to get money to pay for cat food, beer, cigarettes and toilet paper, all of which aren't covered.

I'm not sure if the rationale behind restricting cat food is that if you're that badly off in economic terms you're not supposed to be allowed to have a pet, or if it was a reaction at some past time to urban legends about elderly people making ends meet by using food stamps for cat food to feed themselves. There are a lot of urban legends about poor people abusing the system, but most of those stories have as much verifiable fact as the urban legends of the vanishing hitchhiker. Perhaps in part because of the urban legends, there's a lot of official suspicion of people who are helped by the food stamp program. Quoting this article from the blog The Brooklyn Fridge:

...There's not an iota of evidence that people in the program shop any less nutritiously than other poor people. The problem is that they don't have enough money to buy healthier food. We're the only industrialized nation in the world where poor people don't just get cash from their government to buy food.

We so distrust them that we micromanage every part of their lives. It's humiliating. In New York you have to be fingerprinted to get food stamps. It sends the message to low-income people that they can't be trusted to make their own decisions. People say, "but Joel, it's government money!" And I point out the zillion times a day that our tax dollars subsidize the non-virtuous behavior of rich people, like heliports for rich people to take on drinking binges. I debated the New York Health Commissioner on NPR and I said "My tax dollars pay for the health insurance of every one of your employees. So would you ban soda in office buildings?" He answered "Of course not." So that proves the double standard....And you know what? Occasionally low-income people need some joy. They can't afford to go to Disneyland, there's probably not a movie theatre in their neighborhood. They can't have an occasional soda? I'd rather they be able to have lobster cordon bleu or whatever they'd like, but, since they can't afford that, an occasional soda may provide a rare moment of joy.

The better alternative is to give people more purchasing power. That's why we have our CSA projects, which allow people to use food stamps. We have one in Flatbush, one in Clinton Hill. People line up and go on waiting lists. When good food is available and affordable, they will eat it....

Food stamps are a federal program, but administered individually by each state, which determines eligibility. In November 2010, the federal income limit for food stamps was set at 165 percent of the federal poverty guidelines, which comes out to $36,382 of income per year for a family of four; a requirement that applicants spend down their savings to qualify was eliminated. That's the total of all income from all sources for a year, not counting work on the U.S. census, which is exempt, at least in Idaho. This income has to pay for rent, clothing, health care, furnishings, birthday and holiday gifts, if any, as well as food -- it's everything. Applicants also must have Social Security numbers and must be legal residents or citizens.

In Oregon, one out of five people in the state receives food stamps, according to the state's Department of Human Services, with each household receive an average of $250 per month. In Minnesota, 10 percent of families are eligible.

In Kentucky, Commonwealth officials are considering requiring food stamp recipients and Medicaid recipients to be randomly targeted for drug tests, with loss of benefits if they should fail the test.

In Idaho, officials want to set the value of the personal property a family can own and still be eligible for food stamps. The older law allowed for property valued at $2,000 for "typical families" and $3,000 for elderly families, but this was suspended in 2008 by Idaho Gov. Butch Otter, who believed that economic conditions prevented those with assets from selling them, and thus kept eligible citizens from getting cash for food and other necessities. The proposal would allow applicants to have up to $5,000 in total assets, excluding one vehicle per adult per household. The value of assets like boats, snowmobiles and trailers would be included in the limit. Currently, one in seven residents of Idaho is on food stamps. According to the article, 11 other states (names not given) have asset tests for eligibility for food stamps, Utah allows applicants to own property valued at $2,000 only, and Washington, Oregon, Nevada and Montana do not place limits on assets.

In Delaware, state officials are considering revising the state code to allow felons to apply for food stamps, in order to help them establish their lives after prison, though not everyone favors this.

I think by now I've established that applicants for food stamps have to be in very bad financial condition, with few if any assets, and willing to undergo the public humiliation of having the government determine what they're allowed to buy, as well as asset tests, possible drug tests, fingerprinting and more. Here's the point at which it feels as if the ghost of Charles Dickens should be lurking in the shadows, pen in hand. Instead of Ebenezer Scrooge wringing financial benefit from others' misery, it's the financial firm of J.P. Morgan Chase & Co., which is making considerable money from state contracts to run the food stamp program for 26 states and Washington, D.C., and then using that money to outsource the call center for these programs to India.

Yes. That's right. One of the wealthiest financial firms in the country is making more money every time another poor individual or family has to struggle to make ends meet by using food stamps. I would not be surprised to learn that the contracts were a result of budget cuts at the state level, eliminating the jobs of people in state human services departments who formerly did that work. It seems like adding insult to profiteering when someone in West Virginia or Pennsylvania, or any other state whose programs Morgan Chase administers, has to reach a call center on a different continent to ask about problems with their food stamps. I hope those calls are all on toll-free numbers.

ABC News talked to state officials in those 26 states and the District of Columbia that are served by Morgan Chase. Many state officials had no idea that this was happening. West Virginia officials were upset enough at this that they have requested a domestic call center, citing political concerns; their current contract expires on August 31.

All of this gets even more interesting, considering that Morgan Chase CEO Jamie Dimon has said that the company fully supports the newly created President's Council on Jobs and Competitiveness, which is supposed to help create jobs for Americans. There's a little more info on this council here in the NY Times, and the Wall Street Journal, but I suspect most of the information on it will show up in the State of the Union Address on Jan. 25. Perhaps some of Morgan Chase's support for the program could be made more concrete by creating call center jobs for the food stamp programs they administer within the United States?

It's also worth noting that J.P. Morgan Chase & Co. executives recently received sizable increases in pay, via multi-million-dollar stock transfers. Undoubtedly those executives oversee many other programs, but the coincidence stings a bit.

J.P. Morgan Chase & Co. has not just been playing the Scrooge card with food stamps. They've overcharged 4,000 military families on their mortgages, and illegally foreclosed on at least 14 of those families. This was in violation of the Servicemembers Civil Relief Act, which forbids charging more than 6 percent interest on mortgages as well as foreclosing on military persons or their families. But the firm has refunded $2 million in overcharges, and is in the process of reimbursing or reversing the foreclosures, which is praiseworthy. Huffington Post notes that the Veterans' Administration has been slow in making payments to veterans and far too fast in illegally foreclosing on their VA-backed mortgages, which is as illegal for them as it is for everyone else. I've seen nothing so far on any repayments or reversals from the VA. It would be good if they were as quick to remedy these situations as Morgan Chase was to repair its own similar mistakes.

Comments

[Doctor Science]

I never suspected that food stamps didn't cover *toilet paper*. Yes, technically it's not a *food* -- but it's an inevitable consequence of food, not just an optional side effect.

[wj]

If I recall correctly, the decision about which foods would be covered by food stamps had a lot more to do with which agricultural lobbies had more clout in Washington than with any mind of analysis of what kind of food would be the best (most nutritious, cheapest, etc.). Hence avoidance of just giving poor people money to buy food -- it wasn't so much a matter of lack of trust as it was of making sure that the money ended up channeled to the "right" agricultural products.

[GoodOleBoy]

I must conclude from reading Fiddler's post, that there is a lot not to like about the food stamp program's effectiveness and its administration. Just reading about some of the machinations and rules makes my head spin. There are numerous other federal, state, and local poverty assistance programs (including tax related like earned income credit and property tax abatement) that would spin my head even more. Makes me want to drag out Charles Murray's 'In Our Hands' and see if all this could be wrap up in one big package, after all.

But then I tell myself, be careful.

“There is always a well-known solution to every human problem — neat, plausible, and wrong.” – H.L. Mencken

[GoodOleBoy]

Here's a thought to ponder for those with sharp analytical skills on economic matters. If we, the United States, were to revamp our revenue systems and came up with something very simple (when compared to the current complex income tax system) and revamp our poverty assistance programs to something simple like Murray's single government payment to each individual, what is the downside?

I could see maybe 90 percent of the revenue collection and welfare distribution bureaucracy going away, not to mention all of the related private sector work. Scary, huh! Maybe its that part that keeps good things from happening.

[LoriK]

To the best of my knowledge the rules about what can & can't be purchased with food stamps are federal and therefore the same in every state. That being the case, people can by soda with food stamps.

You can't buy non-food items; so no toilet paper, soap, shampoo, toothpaste, feminine hygiene products or other personal care necessities. You can't by prepared food from the deli counter or any items from the bakery. You can buy prepared foods from the fresh food case or the freezer section. No alcohol or tobacco products of any kind. No food not meant for human consumption, i.e. pet food.

J.P. Morgan Chase & Co. makes their money off administering the benefits debit cards. Back in the day people received a check for cash assistance and books of actual stamps for food stamps. Now each beneficiary or head of household gets a debit card & a PIN instead, and funds are added to the account electronically each month.

People who have cash assistance through TANF can use the card at stores or withdraw cash through most ATMs. Food stamp recipients can use the card for elligable food anywhere those foods are sold. That now includes some farmer's markets, but is obviously mostly limited to grocery stores.

[Bernard Yomtov]

GOB,

I'm not familiar with Murray's proposal, but as was pointed out in another thread, Milton Friedman was an advocate of a negative income tax, and I believe was once quoted as saying,

"The way to help poor people is to give them money."

Broadly, I think this idea is correct, not that there are not more complex issues involved in the case of some proportion of people.

Unfortunately, politics tilts the field toward having lots of rules and restrictions, even when they are clearly counterproductive - in the sense that it would be better to put up with a few more cheaters than to spend the money on enforcement and to put honest claimants through bureaucratic mazes. In the public mind one scammer counts for more than major improvements that have the byproduct of letting the occasional extra scammer through.

Is there a Reaganite/Friedmanite split among conservatives on these issues?

[Uncle Kvetch]

And Number 2
You have the right to food money
Providing of course you
Don't mind a little
Investigation
Humiliation
And if you cross your fingers
Rehabilitation

Know your rights
These are your rights

[GoodOleBoy]

Bernard:

Murray's approach takes Friedman's idea one step further by making a payment to every individual to put them above the poverty level. Then the tax system would, at some income level, recover these payments from those whose income far exceeds any need for the anti-poverty subsidy. I'm unaware of what approach one could take to cheat, but certainly someone will find it.

I don't know about a Reaganite/Friedmanite split, but I bet there would be plenty of opposition to an approach like Murray's from many diverse political sources just because of all the essentially non-productive jobs, government and private sector, that would be made unnecessary as a result. Here's where I think a lot of the noise that goes on about the cheating may just be a smokescreen that keeps us from being able to make a significant change that would displace many of today's workers who have jobs but whose job functions would disappear.

[jrudkis]

I always thought part of the purpose of the restrictions was to prevent the money intended for food being taken by others: similar in concept to micro loans to women because they are more likely to use the money to aid the family.

I imagined that the idea was that an influx of cash into a compromised community would result in crime, extortion, etc, whereas coupons or cards for food only helped ensure actual food.

Is this an unreasonable take on the project? Personal knowledge of food stamps is limited to soldiers who qualified, but did not need the supposed protections.

[russell]

If we, the United States, were to revamp our revenue systems and came up with something very simple (when compared to the current complex income tax system) and revamp our poverty assistance programs to something simple like Murray's single government payment to each individual, what is the downside?

The problem I see with Murray's plan is that the cash grant is $10K per year, with a requirement to spend $3K of that on health insurance.

That is intended to be a full replacement for every other entitlement program. It's not $10K plus SS, or Medicaid, or Medicare, or SNAP, or anything. It's $10K, of which you must spend $3K for health insurance.

If you're healthy, youngish, and have a pretty clean family history, you can probably find a reasonable health insurance plan for $3K a year. Otherwise what you are going to get is a very high deductible and/or catastrophic coverage only plan.

$7K a year is about $585 a month. In my area (north of Boston) that might get you a SRO rental unit at market rate. Then again, it might not.

I emphasize market rate because all of the other subsidies and programs that make housing available to poor people would be gone, in Murray's plan.

And that would be that. No money for food, clothing, transportation, telephone, laundry, personal care stuff like soap shampoo or toothpaste, or any and all of the medical expenses you might have short of your deductible.

None. Rent or food, you pick.

So, an interesting idea, but in a lot of the country $10K ain't gonna get it done. Not even close.

[Catsy]

That is intended to be a full replacement for every other entitlement program. It's not $10K plus SS, or Medicaid, or Medicare, or SNAP, or anything. It's $10K, of which you must spend $3K for health insurance.

As opposed to, say, making the entitlement $7k and then spending the $3k on a public option of some flavor or another that spreads the risk pool across a wider demographic.

Not saying that's what it costs, I'm just suggesting that at a high level it seems silly to give out extra money and say "go spend this on health insurance" rather than cutting out several layers of middlemen and using the money that they would've been required to spend on health insurance anyway to administer it at the Federal level and take advantage of economies of scale, etc.

But that would be a gummint takeover of health care, which is automatically bad for some reason. So, not likely to happen.

[bobbyp]

It may be comforting to those a bit better off to think of the poor as immoral, or morally weak (pretty much the same thing), or just incapable....but it would be wrong.

If you gave it even the slightest bit of thought, you could imagine all those poor disappearing tomorrow, but then who would clean the toilets?

[GoodOleBoy]

'So, an interesting idea, but in a lot of the country $10K ain't gonna get it done. Not even close.'

I understand your point, but it seems to me that when you are talking about a person who does not work for extended periods, say years, that almost no approach to poverty assistance is going to be perfect, particularly if that person insist on living in the highest cost areas of the country where even many people who have jobs most of the time can struggle. The scenario might look completely different for those who have need of help for shorter periods or need help to augment their low earned income, even in high cost areas.

On the issue of other 'entitlements' such as Social Security and Medicare, the transition and conditions afterward would change since for working people (right now that's still most of us) would no longer be paying FICA and Medicare from their earnings so they would be able to shift these funds to other needs, maybe healthcare and retirement.

It seems as if the overall analysis gets complex and so should not be dismissed too simplistically.

[bobbyp]

"....essentially non-productive jobs, government and private sector...."

GOB: So there are only so many "productive" jobs to go around? Our society cannot find useful work for everybody able to do so?

Somehow I am disappointed. I sincerely hope you are also.

[joel hanes]

GOB :

If we, the United States, were to revamp our revenue systems and came up with something very simple

Unpossible. Every exemption, deduction and tax credit has a constitutency that will fight tooth and nail for its preservation. The beneficiaries of the more complex and obscure ones tend to be wealthy and well-connected; that's how the thing ended up in the tax law in the first place, some rich guys who stood to benefit hired a lobbyist to write a proposed law, and Congress helped out their very good friend$$ by passing it.

And it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. -- Machiavelli The Prince

[GoodOleBoy]

bobbyp:

'Our society cannot find useful work for everybody able to do so?'

I cannot answer this question because I don't know.

In the context of this discussion, we can find work for everyone if we are willing to have them do things that no one would need to do if we took a more enlightened approach to solving the problems that create the need for that work.

If I manage an operation requiring a thousand people to produce payments by check to be mailed to millions of people periodically and innovation allows my operation to be reduced to twenty people producing electronic payments delivered by direct deposit to financial accounts, what is my responsibility and what should I do?

[Sebastian]

"Yes. That's right. One of the wealthiest financial firms in the country is making more money every time another poor individual or family has to struggle to make ends meet by using food stamps. I would not be surprised to learn that the contracts were a result of budget cuts at the state level, eliminating the jobs of people in state human services departments who formerly did that work."

I'm second to very few in my unhappiness with JP Morgan across lots of different dimensions, but I don't go along with this kind of argument at all. Going from physical food stamps, with all of the associated paperwork that has to be done on a per store level, to a credit card system which can be administered electronically is an enormous savings. The fact that states don't have to create and administer their own separate credit card system, is much more likely to be a pure efficiency/avoidance of gross waste choice on an enormous scale, than something worth throwing up shadowy associations with. You're using computers for communication for heaven's sake. You're probably a huge part of the problem if you think that is a problem.

The strange thing for me, as a reader, is that you had a great thing going with the listing of flaws and hardships created by the food stamp system. I was expecting it to end in a discussion about maybe moving to cash, or reducing the restrictions. But then it feels like it totally got derailed onto a weird side thing against JP Morgan Bank. I'm all for a rant against JP Morgan Chase bank, but the connection is super-tenuous. Of all the things that they seem to be doing wrong, and there are so many, administering food stamp programs doesn't really seem to be one of the problem areas.

[GoodOleBoy]

Joel Hanes:

'Unpossible. Every exemption, deduction and tax credit has a constitutency that will fight tooth and nail for its preservation. The beneficiaries of the more complex and obscure ones tend to be wealthy and well-connected; that's how the thing ended up in the tax law in the first place, some rich guys who stood to benefit hired a lobbyist to write a proposed law, and Congress helped out their very good friend$$ by passing it.'

I recognize this state of affairs and, in fact, much the same exists in the plethora of poverty assistance programs.

'And it ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. -- Machiavelli The Prince'

Now Machiavelli was right about many things but not all the time.

Isn't it amazing what dedicated leaders were able to accomplish in America between 1760 and 1790. And I would say their challenge fit Machiavelli's criteria.

Novus Ordo Seclorum!

[GoodOleBoy]

'Now Machiavelli was right about many things but not all the time.'

I need to clarify this. He was right in all he said and those dedicated leaders still accomplished what they set out to do.

[russell]

I understand your point, but it seems to me that when you are talking about a person who does not work for extended periods, say years, that almost no approach to poverty assistance is going to be perfect, particularly if that person insist on living in the highest cost areas of the country where even many people who have jobs most of the time can struggle.

Murray's plan could be made quite a bit more practical simply by making the cash grant a number that someone could actually live on.

We could fund that by not giving the cash grant to people who don't need it. Like, for instance, me.

And not for nothing, but a plan that relies on the emigration of poor people from high cost of living areas to low cost of living areas is not really going to make anybody happy. Least of all the people living in low cost of living areas.

Stuff like that happens now, and it doesn't really go all that smoothly. It sounds reasonable on paper -- rent's too high in the Boston area, move to Oklahoma! -- but in real life, on any kind of scale that would make a useful dent in the problem, it would be a pretty bumpy ride.

The scenario might look completely different for those who have need of help for shorter periods or need help to augment their low earned income, even in high cost areas.

No doubt.

Look, I have no problem with the argument that federal (or really most government) programs - of any kind, not just welfare - are quite often bureaucratic, crazy, illogical mazes.

The reason that is so is because 300 million people live here, they have 500 million opinions about how to go about doing things, and making anything happen at all requires finding some kind of weird triangulated sweet spot sufficient to gain a critical mass of support.

Anything that happens in a self-governed organization with a membership larger than, say, ten is going to look like a Rube Goldberg cartoon.

Your guy Murray's program would devolve into something similar in about two weeks.

But we either sign up to help each other out, or we don't. If we do, then the goal should be to actually achieve the goal of helping.

If your program requires people to pick between rent and food, or requires them to move halfway across the country in order to lower their rent, that's not a program that actually solves the problem.

We live in an economy that sheds jobs every time the stock market burps. That's the economy we say we want to live in. If we want to live with that kind of instability and regular disruption, we should step up to the task of cleaning up the mess.

Cleaning up the mess means making sure folks don't get left behind with no place to live and nothing to eat.

$10K won't do it.

[RepubAnon]

A columnist in the San Francisco Chronicle named Jon Carrol promotes the "Untied Way" every year. Not affiliated with the "United Way" or any other charity, the Untied Way consists of getting a stack of $20 bills from your bank and distributing them to anyone needing money.

Some will undoubtedly misuse the money for unhealthy things like drugs/ alcohol/ contributions to the Palin in 2012 campaign, etc. However, it beats all the money spent on administrative costs.

[Phil]

particularly if that person insist on living in the highest cost areas of the country where even many people who have jobs most of the time can struggle.

Boy, does that "insist" need some unpacking here. I mean, as opposed to what?

[Brett Bellmore]

As opposed to telling your employer to either pay you a living wage in the area he expects you to be working in, or find another employee?

Look, I can understand how simple inertia can cause one to stay at a job that doesn't quite cover your expenses, while fantasizing that he's suddenly going to see the light, and pay you a living wage. I was in that situation for several years, myself. First to help out a business owner who was a friend, and then because the corporation that took over the business lied to us about their intention of adjusting pay rates. But enabling somebody to stay in that situation doesn't help them, it just prolongs the agony.

That's why I think all but the most short term aid should be conditioned on being willing to make changes to improve your long term situation. Including, yes, moving to someplace where there are jobs.

The people in the location you move to don't like the influx of job seekers? Tough, nobody's got a right that new people don't move into their neighborhood.

[rea]

"most short term aid should be conditioned on being willing to make changes to improve your long term situation. Including, yes, moving to someplace where there are jobs"

(1) We have 10% unemployment, and people like Brett think the problem is that the unemployed or underemployed aren't trying hard enough.

(2)Moving people with families around the country chasing jobs isn't always very practical.

[Slartibartfast]

Know your rights

This has been a public service announcement...with guitar!

[Turbulence]

Tough, nobody's got a right that new people don't move into their neighborhood.

Unfortunately, in America, many people have exactly this right, in practice if not in theory. My experience with local neighborhood groups is that their primary goal is to use every means available to prevent the construction of new housing in their area. Their best trick is to simply raise developer costs so high that developers bail out or never get started.

[Phil]

Ah, so "insist," when unpacked a la Bellmore, is something that relies on a combination of mindreading and moral-superiority poses. Got it.

Unfortunately, in America, many people have exactly this right, in practice if not in theory. My experience with local neighborhood groups is that their primary goal is to use every means available to prevent the construction of new housing in their area.

Banks still redline so that none of "those people" move into certain neighborhoods, even though they'll claim they don't.

[GoodOleBoy]

Is the primary cause of poverty unwarranted marketplace discrimination?

[russell]

Tough, nobody's got a right that new people don't move into their neighborhood.

We have a real electoral winner right there.

I basically don't disagree with this statement, however I would like to draw your attention to, basically, the entire history of the United States (at least) as a counter-example to its practicality.

If you want to help poor people, give them money. If you don't, don't. But horsing around with requirements that they jump through 97 different kinds of hoops to prove themselves "worthy" of your assistance is horsecrap.

You think government assistance programs are complicated now? Try a requirement that we track where folks used to live, how much they used to make there, how much they paid for housing and transportation and food there, when they moved, how much they make now, how much less they pay for housing and food and transportation now, what the net differential is in cost of living vs income, and how much more or less that translates into cash assistance.

At least we'll get a lot of new federal jobs out of it.

If you want to help poor people, give them money. Some of them will kick back and spend their days eating pizza and watching cable. Most of them won't. EIther way, it will net out to be cheaper than what we do now.

[GoodOleBoy]

Some comments and interpretations amaze me. The theme seems to be: society causes poverty therefore society has the absolute and total obligation to remedy poverty and on terms acceptable to those who suffer poverty. And this benevolence needs to be legislatively enacted which will then allow those who may not subscribe to be punished.

Insist could be replaced with choose. The point I was making is that poor choices (from among reasonably available choices) frequently exacerbate problems associated with poverty and reduce the effectiveness of remedies. And there was nothing magical about Murray's $10000, but it was a starting point. I really haven't uncovered any counter analysis that offered any other numbers to elaborate the proposal.

[hairshirthedonist]

The theme seems to be: society causes poverty therefore society has the absolute and total obligation to remedy poverty and on terms acceptable to those who suffer poverty. And this benevolence needs to be legislatively enacted which will then allow those who may not subscribe to be punished.

I think the theme is that poverty sucks and the richest nation in history can afford to do something about it, and that there are better ways than what we're doing now, which comports with the general thrust of the Murray proposal, even if his numbers need work. It's not a question of what terms are acceptable to the poor so much as what the best way is to help them. (I don't even know what it means, really, to say that "society causes poverty." Does society cause wealth, too?)

There are plenty of good selfish reasons for the not-poor to help the poor if one gives it some thought. Punishment is not required.

[GoodOleBoy]

Thanks for that sensible view, HSH.

[russell]

society causes poverty

For the record, "society", aka our deliberate choices about how to organize our economic life, *does* cause poverty.

Some people are poor because they're lazy irresponsible boneheads.

Some people are poor because the normal operation of our economy distributes income and wealth in such a way that some folks end up poor. Period.

So yeah, "society", please read as "people who live in the United States and benefit from it's wealth", have a positive obligation to mitigate poverty.

[Fiddler]

Sebastian, I don't object to outside contractors taking on government jobs; that happens all the time. I object to Morgan Chase taking money for administering a federal poverty program and using it to create jobs outside this country. This is unsavory, to say the least. The money for those jobs comes from the tax dollars of the people in the states whose programs they administer; I haven't taken a survey, but I doubt they intended their federal tax dollars to go to India.

Call center jobs aren't wonderful. Workers' jobs pay moderately, perhaps a little above minimum wage, and the work is long hours of talking to unhappy people in a highly regimented and regulated environment; I have that knowledge from a friend who worked in a regional call center, as well as my own experience of working in a call center many years ago. Apparently, the work has not changed. However, those jobs put food on the table and pay the rent and improve the local economy in the areas where call centers are located. If the economy is to improved by money from federal poverty programs, I strongly prefer that that occur in the US.

According to the ABC article I linked, Morgan Chase also provides child-support debit cards in 15 states and unemployment insurance cards in seven states. Morgan Chase is also the only company still running overseas call centers for these programs; their officials said they had domestic call centers for some states but refused to say which. ABC found that Indiana and South Carolina insisted on having their call centers within the US. In India, call-center workers earn about $2.50 to $3 an hour. The other two major companies who handle these programs on contract, Fidelity National Information Services and ACS, have call centers within the US; a Fidelity spokesman called it a matter of long-term sensitivity.

[Slartibartfast]

Where are my manners?

Welcome, Fiddler!

[GoodOleBoy]

Russell:

'If you want to help poor people, give them money. If you don't, don't. But horsing around with requirements that they jump through 97 different kinds of hoops to prove themselves "worthy" of your assistance is horsecrap.'

I don't disagree with this. Rather than requirements to jump through hoops (which I don't support), where I do have some concerns is providing assistance at the level of enabling continuing self-destructive behavior (where that is what is happening) versus helping to overcome such behavior. I would not feel really good about myself if I accorded anonymous and capable fellow humans assistance at levels that provided no incentive for them to actually do for themselves, when , at the same time, I would not provide that for similarly capable members of my own family. This is usually not a problem for those who are capable and attuned to the need to do for themselves. Its just my own fairness or equity doctrine.

If one looks at the concept behind Murray's approach, it fits with the way I think about this. Most Americans would operate within his framework without noticing much out of the ordinary. People in need, assuming numbers similar to what we now have, would constitute something less than 20% of the population. His approach looks to me as if it could work effectively for those encountering temporary bumps in life's journey. For those with more chronic conditions, his approach helps with basic life needs. I not sure there is any way to fix the world for this cohort.

I guess a question each of us must ask ourselves is: do we want to help these people or do we want to take over the responsibility for their lives?

[russell]

Rather than requirements to jump through hoops (which I don't support), where I do have some concerns is providing assistance at the level of enabling continuing self-destructive behavior (where that is what is happening) versus helping to overcome such behavior.

I appreciate what you're saying here. But IMO (please note the IMO) it probably makes more sense to treat poverty and self-destructive behavior as separate issues.

Obviously those things overlap and interact, but I think their *solutions* are different.

Also IMO (and again please note the IMO) poverty per se -- insufficient funds to procure the needful things in life -- is an order of magnitude simpler and less expensive problem to solve than self-destructive or self-defeating patterns of behavior.

I also generally agree with the idea that it's more valuable to give people access to ways to improve their own lives than to simply give them enough cash to not starve.

But when actual poverty is part of an individual's mix of issues, obtaining food, shelter, and other basics sort of has to be the first step.

It's difficult - counter-productively difficult - for folks who are actually homeless or chronically transient, or who have to choose between eating and procuring other necessities, to take advantage of whatever other services are needed.

For a lot of people, poverty is potentially quite temporary. They have skills, work ethic and work history, etc., they just (for example) get laid off because whoever they work for needs to cut costs. Or the industry they work in contracts. Etc etc etc.

What those folks need is basically money, for a little while, so they don't totally slip out of the productive economy and into chronic impoverishment.

They need to maintain an address that isn't a PO box. They need to keep the phone on. They need to eat, and shower, and launder their clothes. They need to be mobile enough to take advantage of whatever opportunities become available to them.

All of the above does not have to be extremely expensive, and it is the difference between "I was out of work for a year" and "I live on the street now".

[McKinneyTexas]

Welcome Fiddler.

On the issue of food stamps being limited to the purchase of food, but not every consumable or ancillary product (knives, forks, a table to eat on, a home for the table), there is the concern, IIRC, that some appreciable number of recipients with dependents, if given the choice of beer or Wheaties, will go with beer.

A second observation is that there are all manner of things that are necessities that, by definition, fall outside the scope of food stamps.

Direct cash payments to individuals is no guarantee that children and others dependent on the cash recipients will benefit as intended.

I imagine the process of applying for any welfare-type service is unpleasant. So too are IRS audits.

The consensus here seems to be that a single check to people making less than X (I suspect brackets would be in order, but the principle is the same) is the way to go. The counterarguments include (1) how to ensure that the recipients are spending their money responsibly, (2) how to verify that the recipients continue to be eligible and (3) how to incentivize a recipient to move into productive employment. Suppose, for example, two parents with children both refuse to work, but in fact do spend their stipend (?) responsibly. Are the payments suspended, even though the brunt of doing so is born by the children?

[wonkie]

I propose that we require accountablility for how money is spent in porportion to how much money is given and include corporations, farmers, the timber industry, cattle and sheep ranchers...

Granted there is some effort toward account ability for those recepients of tax largesse but there is no where near the presumption of wasteful behavior, no where near the scapegoating for budget deficets, and nowhere near the likelihood of the money getting cut off if the recepient misbehaves.

So... accuontabiity for the poor, sure, in proportion to what they get compared to what others get.

[Phil]

I imagine the process of applying for any welfare-type service is unpleasant. So too are IRS audits.

Yeah, except only one of them means that you might be starving.

The counterarguments include (1) how to ensure that the recipients are spending their money responsibly,

Maybe we can hire people to stand over their shoulders in the grocery line and make sure they aren't buying anything of which you might disapprove.

[russell]

there is the concern, IIRC, that some appreciable number of recipients with dependents, if given the choice of beer or Wheaties, will go with beer.

I'm actually not unsympathetic to this concern. More accurately, I agree that it's not a useful or good thing to give cash money, with no conditions or controls, to people who will simply use it to continue a personal addiction.

As noted above, however, I think the concern as you have stated it conflates the issues of *poverty* and *addiction*.

They're often found in the same place, but they are not synonymous, and don't require the same solution.

The consensus here seems to be that a single check to people making less than X

That was actually Murray's proposal, suggested here by GOB.

I'm not sure there's a consensus here that it's a good idea.

[Bernard Yomtov]

Russell,

But IMO (please note the IMO) it probably makes more sense to treat poverty and self-destructive behavior as separate issues.

IMO too.

McK,

there is the concern, IIRC, that some appreciable number of recipients with dependents, if given the choice of beer or Wheaties, will go with beer.

No doubt. But that concern is equally valid for those whose cash comes from work. In other words, if we are concerned that children are not being properly cared for, then methods of checking that are appropriate whether the parents are on welfare or not.

(1) how to ensure that the recipients are spending their money responsibly,

Very complex. It may be impossible or unwise to really do this. Even defining "responsibly" is hard. Under what circumstances would you consider the purchase of a six-pack of beer, or Coca-Cola, irresponsible? What about a bag of potato chips? Always? If there are children in the household? If the recipient is single and buys a six-pack once a month or so?

I think it's very easy for puritanism and the desire to punish to overtake common sense and decency.

(2) how to verify that the recipients continue to be eligible

Wouldn't Social Security numbers and W-2 forms and so on help here?

(3) how to incentivize a recipient to move into productive employment. Suppose, for example, two parents with children both refuse to work, but in fact do spend their stipend (?) responsibly. Are the payments suspended, even though the brunt of doing so is born by the children?

I think this is part of the "behavior" issue that Russell suggests ought to be dealt with apart from poverty. And of course a stronger economy, decent child care arrangements, and so on will help alleviate the problems of of the involuntarily unemployed. Not to deny that there will be freeloaders, I'd like to get a sense of the size of that population before thinking about what the best thing to do about them is.

[McKinneyTexas]

As noted above, however, I think the concern as you have stated it conflates the issues of *poverty* and *addiction*.

They're often found in the same place, but they are not synonymous, and don't require the same solution.

There are any number of behaviors short of addiction that taxpayers have the right to say "no" to subsidizing. Welfare is a pejorative for many Americans. Any kind of consensus for paying out monies to people who are not working without any limits on how that money might be used is going to be a very tough sell. My prediction is that it won't fly.

But that concern is equally valid for those whose cash comes from work. In other words, if we are concerned that children are not being properly cared for, then methods of checking that are appropriate whether the parents are on welfare or not.

Equally valid? No, not equally. While it is equally despicable to abandon your kids, it's even more so to do it with someone else's money.

But let's leave kids out of it--does anyone expect a majority of both houses to sign on to providing a subsistence living to people who won't work?

It may be impossible or unwise to really do this. Even defining "responsibly" is hard.

It may be hard for some to define 'responsibly', but not for others. There is a reason why there is a list of approved foods, and there is a reason why there are strings attached to getting gov't money. I agree with Wonkie, there ought to be more strings attached to getting gov't money. Or, better yet, end subsidies. I'm pretty much fine with that.

Wouldn't Social Security numbers and W-2 forms and so on help here?

Probably not. There isn't some magic data base that a front line application reviewer can tap into and get someone's net worth and last five years taxable income. As for producing W-2's, unemployed people don't have those and they only tell you what someone made the year before. If we had a reliable verification and validation system, fraud and abuse would be minimal.

[Julian]

http://www.tc3.edu/instruct/sbrown/stat/falsepos.htm

That is the example I see most often used to explain conditional probability, and I think it's useful here.

To opine that "fraud and abuse would be minimal" is to conflate Type I and Type II errors. W/r/t welfare, it seems to me that government can make either kind of error: you can pay welfare to someone who fraudulently qualifies (fraud / abuse), or you can fail to pay someone who rightly qualifies.

The legislation which controls our error rate controls both of these kinds of errors. I think it is misleading to behave as though legislation which cracks down on welfare in general will only reduce abuse and will not also produce more "failure to pay qualified recipient" errors.

My position is that it may be more important to pay money out on sufficiently generous terms that people who deserve it get it, even if that means more people who do not deserve it also get it. I believe this because I think the innocent are worth saving at the risk of leniency to the guilty. Of course, a full Cost Benefit Analysis would have to be done to determine the optimal strategy, but I think it is very, very important to avoid framing the debate in terms as simplistic as "get rid of abuse!"

Lastly, I wish this ferocious accounting zeal were directed more frequently at the DoD, where I imagine the amount of money wasted beats up the welfare budget and takes its lunchbox.

[Julian]

"will reduce only abuse"

misplaced modifiers ...

[Julian]

Actually, right the first time. Sorry about that.

[wonkie]

Why is welfare a pejorative for many Americans? Becaue welfare recpeients were demonized first by racist lies about niggers on welfare and later by less obviously racist lies about welfare queens?

Does it go back to those godawful Pilgrims and their nasty, negative Calvinism?

Or maybe the root is the hypocrisy of people such as rachers and loggers who expect the government to subisdize their life stye for generations but can't stand the thougbht of a tax dollar being "wasted" on someone other than themselves.

[Brett Bellmore]

Or maybe it's as simple as people who worked for their pay figuring that they're entitled to spend it themselves, rather than having it taken away and given to somebody else. I know it's more fun to think badly of people who want to keep the money they work for, but Occam's razor, after all...

[wonkie]

Well, it couldn't be that because all of those simple people want someone else's tax dollars to be spent on them one way or the other. Red state folks are especiually prone to demanding subsidies for themselves: farming, ranching, timber, mining, pork barrel military expenditures, earmarks that create jobs in Alaska...

Would it make those simple people feel better if old folks,sick people and children had to go out and work for their food stamps?

BTw if I remember correctly the average amount of time a family received Food Stamps was a little less than two years, taxpayers have been suppprting farmers and ranchers for generations.

[bobbyp]

Why, yes, you might be on to something there, Tex. So when the Fed hands out zero interest loans to Citi and Goldman Sachs (this is WELFARE by the way), we have every right to make sure those clowns eat healthy and don't blow all that boodle on booze and coke, right? I mean, what's good for the goose and all that....

[bobbyp]

Somehow the computer ate the copy paste. My post above should lead with the following from McKinney: "It may be hard for some to define 'responsibly', but not for others. There is a reason why there is a list of approved foods..."

Why, yes, you might be on to something there, Tex. So when the Fed hands out zero interest loans to Citi and Goldman Sachs (this is WELFARE by the way), we have every right to make sure those clowns eat healthy and don't blow all that boodle on booze and coke, right? I mean, what's good for the goose and all that....

[bobbyp]

Or maybe it's as simple as people who worked for their pay figuring that they're entitled to spend it themselves...

Why I get that same feeling when my hard earned money is: Thrown at rich farmers paid to grow less food; Given away to greedy bankers to 'loan themselves back to prosperity; Thrown at well connected defense contractors who promise the moon and deliver nothing; Simply given away to rich tax cheats...yes, socialism for the rich.

We think alike sir. Ponder that for just a few moments.

[Ashcomp]

My problem with all forms of assisitance is the notion that there's some magic dollar amount of earnings that will get you abruptly cut off. The system should not operate in such a way that getting a job means that you lose your assistance--which might be more than you earn.

[russell]

Any kind of consensus for paying out monies to people who are not working without any limits on how that money might be used is going to be a very tough sell. My prediction is that it won't fly.

IMO that is an extremely safe bet.

Or maybe it's as simple as people who worked for their pay figuring that they're entitled to spend it themselves, rather than having it taken away and given to somebody else.

Also IMO, that is exactly the reason that McK's prediction is a dead cert.

By the most conservative reading of "unemployed", about ten percent of the workforce is currently unemployed. That's about 15 million people.

It's a pretty complex undertaking to keep track of how many six packs 15 million people are buying. Or to figure out if 15 million people really deserve our help, or if they're just goldbricking.

You want a nanny state? Keeping track of whether 15 million people are satisfying your standards for worthiness will get you your nanny state in a new york minute.

Oops, forgot. You don't like a nanny state.

Entire industries have been offshored in the last couple of decades. That's OK, because we want low labor costs to maximize shareholder value.

American manufacturing is consistently undercut on price by countries where labor costs are lower. But we don't want to protect domestic manufacturing through industrial policy or tariffs, because that will interfere with free trade.

Folks who work in large enterprises are generally completely unrepresented in corporate governance. If they're in a union, maybe they can bust b@lls enough to have their interests represented, otherwise they are viewed as a completely fungible commodity, like bricks or light bulbs. They can, and are, cut loose anytime costs need to be trimmed. The idea of accepting a lesser return on investment, no matter how minor, in order to preserve the livelihoods of people who work for the enterprise is anathema.

That's how we want to run things here.

That means we have millions and millions and millions of people who are intelligent, motivated, and willing to work, but who can find no work to do.

Not some, not a few, not a handful. Millions and millions.

That's the reality.

Why is that the reality? Because on a day to day basis, the market isn't actually that efficient, or optimal, or fair. It's just a bunch of people making, buying, and selling stuff, and it's prone to all of the distortions and weirdness of any other mass human behavior.

And you should treat anyone who tries to tell you otherwise like a member of a weird and delusional intellectual cult, because that is exactly what they are. They're nuts.

You want a free and unregulated market? That's how you get your "liberty" jollies?

A free and unregulated market creates winners and losers, and not in a fashion that maps particularly cleanly with "deserves" and "doesn't deserve".

If you want to play the free market game, you have to pay the free market piper. Paying the free market piper means dealing, and dealing fairly, with the folks who get screwed.

You don't do that, I say you're the freeloader.

[JanieM]

You don't do that, I say you're the freeloader.

Yes. Yesssssssssss. This is the best "what Russell said" so far, and that's saying something. One more and we've got ourselves an organization:

And if two people, two people do it, in harmony, they may think they're both faggots and they won't take either of them. And three people do it, three, can you imagine, three people walking in singin a bar of Alice's Restaurant and walking out. They may think it's an organization. And can you, can you imagine fifty people a day,I said fifty people a day walking in singin a bar of Alice's Restaurant and walking out. And friends they may thinks it's a movement.

I wish the additional forty-seven weren't so hard to find.

[KS in MA]

Amen! Sign me up for the "what Russell said" organization.

[Hartmut]

Over here there is a requirement for people receiving unemployment benefits/welfare to prove on a regular base (either it was every 3 or 6 months) that they are actually seeking work. The usual way to do that is to bring copies of your job applications and the negative answers of the companies in question. If you got job interviews, you can request a signed form. There are also some other activities that count. The scrutiny applied by the unemployment agency depends on the impression you leave and to a degree on your status. Someone with an engineering degree who's out of work for half a year will be trusted more than an unskilled worker who's last employment was 10 years ago.
Until quite recently there was standardized reimbursement for costs of job applications (e.g. 5€ for each letter of application), today this has been reduced somewhat for budgetary reasons and requires the actual receipts.
Also the unemployment agency keeps a database (no names and home addresses included) that employers can connect to. They can signal interest and the agency will then ask you to contact the company or to give them a very good reason why you think that is not useful. Also companies can enter open positions into a database that the unemployed can use. I got my current employmnet hat way and before that I got several contact requests as described above. Most people still seek for jobs without making use of that though
As far as I know in Norway a similar system is in place and the vast majority of available jobs is in the database and most job applicants go through there.
But again, I do not believe that it would work in the US.

[jerseycityjoan]

The most you can get is $200 a month for one adult.

That's obviously way too little. It should be at least $300, if not $350.

If you could spend your food stamps on nonfood items, you would come up short on your food.

Of course there is fraud associated with Food Stamp use. There are hundreds of households in which the female wiht kids claims no income, get all kinds of benefits, while boyfriend, older kids or other relatives bring in lots of money through criminal activity.

It seems to me people always want to dodge this truth. I think it would be better to admit it and say that there's always going to be a percentage of people -- poor and rich alike -- who will lie to get any government benefit available but we should't run government programs based on the few bad apples.

[jerseycityjoan]

Correction to 4th paragraph:

"There are hundreds of households in which the female wiht kids claims no income" should read:

"There are hundreds of THOUSANDS, IF NOT MILLIONS OF households in which the female with kids claims LITTLE TO no income"

[russell]

It seems to me people always want to dodge this truth.

The claim that there are hundreds of thousands of households that are nominally single-parent, but in which another non-married parent (or at least adult) lives or participates financially, is likely true.

I don't know how many of those households exploit the non-official status of parent #2 to misrepresent the total household income, but I'm sure it's well north of zero.

I'm not sure what the "criminal activity" thing is about. At that point IMO you're statistically at the noise level.

So yeah, if there are actually two folks bringing income into an actual household, and only one income is reported for purposes of applying for benefits, that's fraudulent. We should try to prevent that.

32 million people in the US receive food stamps.

So, if a total of one million are doing so by not reporting live-in daddy's income, that's 3 percent.

And the net result is relatively poor folks, most notably their kids, are getting something to eat.

Personally, I can live with that.

[jerseycityjoan]

Russell,

Sad to say that you should change the 32 million to 42 million plus.

"The number of Americans who are receiving food stamps rose to a record 40.8 million in May ...

Recipients of Supplemental Nutrition Assistance Program subsidies for food purchases jumped 19 percent from a year earlier and increased 0.9 percent from April, the US Department of Agriculture said in a statement on its website.

An average of 40.5 million people, more than an eighth of the population, will get food stamps each month in the year that began Oct. 1, according to White House estimates.

The figure is projected to rise to 43.3 million in 2011."

http://www.boston.com/news/nation/washington/articles/2010/08/05/food_stamp_use_hit_record_408m_in_may/

I bring up the criminal activity because of the stereotype of the people covering in gold using their Food Stamps card and taking home the grocerie s in a $50,000 vehicle. Yeah these people exist but they shouldn't be the "face" of Food Stamps.

My point was that I think it's better to acknowledge that we have a criminal element and a circle around them that aren't hurting financially yet typically collect lots of government benefits. People are understandably really ticked off abou this. However, that shouldn't be a reason to keep benefits artificially low or extremely hard to get though.

There was an AP article last fall that said due to changes in federal law, around 20 states were allowing people to get Food Stamps if they didn't have any income. That means the people who lose their unemployment but still have savings above $2000 and other normally disqualifying assets can get Food Stamps. Right now it's up to individual states to change their laws and regulations. I wish this change would be made at the federal level so it would apply in all 50 states.

[wj]

does anyone expect a majority of both houses to sign on to providing a subsistence living to people who won't work?

McK, the answer to that is obviously No. But a better question is: How do we differentiate between "can't work" and "could work, but won't" for any individual? Which entails both deciding what kinds of disability someone might have, and what kind of work might be appropriate for that individual.

For example, if you lose a leg, your career as a professional basketball player is over. Can't work at that. But could you work at something else? How much training/retraining is reasonable to expect?

Also, what are your inherent abilities (which determines what you can be trained to do)? Personally, I could be trained to work as a waiter. I'd hate it, as well as being not very good at it, but I could do it. I could not, however, be trained to work as a professor of biochemistry -- I simply don't have the ability to deal with organic chemistry at that level.

And picture the fun of the Congress deciding how to write a law which covers all of those questions for all of the possible jobs someone might have. Even at the level of providing adequate direction for a (probably huge) administrative department to make regulations to cover it. The mind boggles!

[CharlesWT]

For quite a few people, it's illegal for them to have a job.

[McKinneyTexas]

Because on a day to day basis, the market isn't actually that efficient, or optimal, or fair. It's just a bunch of people making, buying, and selling stuff, and it's prone to all of the distortions and weirdness of any other mass human behavior.

I never said it was, but I will say it is far superior to central/gov't planning. It does produce more for more people than any other system devised so far, and it let's pretty much anyone establish their own operation with the application of hard work, foresight, etc. Most choose not to do so, but at least the choice and the opportunity is there. If there is a better place with a better system, tell me about it.

If you want to play the free market game, you have to pay the free market piper. Paying the free market piper means dealing, and dealing fairly, with the folks who get screwed.

You don't do that, I say you're the freeloader.

In a free market, anyone who doesn't work has a right to some level of subsistence? Funded by those who do work? Without strings, without conditions, with no time limitation, no requirements of performing public service while on the gov't payroll? Public service that is graded as would any private employment, i.e. don't show up on time and do what is assigned in a competent manner or lose your paycheck?

But a better question is: How do we differentiate between "can't work" and "could work, but won't" for any individual? Which entails both deciding what kinds of disability someone might have, and what kind of work might be appropriate for that individual.

The Social Security Administration does that right now and if someone is found to be disabled, they get a check every month, plus health care.

The overarching issues here are (1) cost and (2) tolerance of a culture that pays a subsistence living to adults who are capable of work.

Now, what might work is an "employer of last resort" mechanism where people who are out of work show up somewhere and do what is assigned until they can find a better job elsewhere. Any system has to be objectively less attractive than holding a job and it has to require more than showing up once a month to register for an extension of benefits.

[russell]

I will say it is far superior to central/gov't planning.

Nobody's arguing for central/gov't planning.

Neither is anyone other than Charles Murray arguing for cash disbursements without strings or conditions.

Here is my point of view.

The free market is not good, bad, or indifferent. It's just a phenomenon. It's a bunch of people making, buying, and selling stuff.

In general, it's a better way to allocate resources, find prices, determine risk, etc., than a centrally planned economy.

But it doesn't have any inherent direction or purpose. It's just a bunch of people doing stuff.

IMO we should think of economic markets as a kind of naturally occurring phenomenon. Like the weather, or the flow of ocean currents, or the migration patterns of birds.

We don't try to control those things, or plan them centrally, but in cases where the natural operation of those things are likely to create problems for us, we generally take the obvious measures to mitigate those problems.

We monitor weather, and when it looks like a hurricane is going to hit, we do what we can to make sure that folks get out of the way and property damage is minimized.

To Bobby Jindal's chagrin, we monitor volcanic and other seismic activity, and if it looks like there might be trouble, we take steps to mitigate it.

The *normal operation* of economic markets makes some people poor. Not because they are lazy, or fail to take initiative, or lack foresight, or have insufficient gumption and moxie. Just because.

It's just what happens. Ask Vilfredo Pareto.

Since *that is what happens* when free economic markets do their thing, and since we want more rather than less free markets, if we have any intelligence or basic sense of responsibility at all we will take steps to mitigate the harms that flow from that.

If we fail to do that, we are being irresponsible. If we fail to do that because we only like the upside of the free market, and are content to let other folks absorb the downside, then we are in fact the freeloaders. If "freeloader" is too harsh a word, feel free to read that as the more neutral economic term of art "free rider".

But whatever you call it, if that's how we behave, then that is what we are.

That is what I am saying.

So yes, some people who don't work will get money from those of us who do.

Just like some people who have a hurricane demolish their house will get money from those of us whose homes weren't demolished.

Lather rinse and repeat for any other example of people being harmed by the normal operation of naturally occuring systems.

If you think that the 10% of the workforce (more accurately something closer to 20%) who currently don't have jobs are in that position due to some kind of personal failure, then you will likely not see things this way.

If you don't think that, it may make sense to you.

[GoodOleBoy]

'And picture the fun of the Congress deciding how to write a law which covers all of those questions for all of the possible jobs someone might have. Even at the level of providing adequate direction for a (probably huge) administrative department to make regulations to cover it. The mind boggles!'

Yes, the mind does boggle. How would we ever get to the point where we would think this is a job for Congress? Congress did have some specified functions to be executed at the Federal level, but it was not envisioned at the outset that they would be responsible for social issues like this. We ask too much. Maybe the mind would not boggle at the tasks if we were to devolve this responsibility to a lower government level, which would include an ability to incorporate serious consideration of more localized impacts that are affecting the social situations of people in need. But no, we prefer to do the one size fits all. Although, in recent comments, it's seems some who hold this view have a divergence when it come to the Second Amendment and gun control issues. There we had some suggestions that the same application of law may not be applicable to Chicago and Utah.

[GoodOleBoy]

And again Russell, I generally concur with your analysis of the free market and the unsatisfactory social conditions that result naturally and that society can act to mitigate these condition.

We just don't see the governing level where we deal with those issues and what kinds of solutions are needed to deal with differing social results the same way.

[Phil]

Being at a lower level of government does not automatically confer an ability to execute difficult tasks more efficiently. Like, at all. The point of wj's comment is that the task described could not efficiently be executed by anyone, because it is ridiculous.

[McKinneyTexas]

Russell, what I think is that a permanent system of paying a subsistence living to people who aren't working will cause even more problems than our current system. I also think that, given the other, crushing economic issues of the day, incurring more debt is a bad idea.

I also believe that there are usually reasons why many poor people are poor. Within that set are subsets of those who (1) can barely function in a modern economy through lack of intelligence and other innate characteristics that make some people more able than others ,(2) have made multiple poor decisions and cannot be helped effectively because they are decisionally challenged, (3) are the products of broken homes, with little to no guidance/examples of how to utilize the opportunities presented by free public schools, a work ethic, etc. and (4) have a range of personal issues--lack of initiative, apathy, chronic personality clashes with other employees, lack of motivation, etc--that make them marginal employees when on someone's payroll.

Check writing to any but perhaps the first class isn't going to do much to advance anyone's interests. There is significant overlap between classes 2 thru 4.

I understand there are good folks, ready to work, who are swept up in this phase. If I were calling the shots, there would be a bona fide effort to separate the subsets of unemployed.

[russell]

There we had some suggestions that the same application of law may not be applicable to Chicago and Utah.

And, in fact, we have local differences in determining who is eligible, for what, what benefits they will receive, and in what amounts.

Makes sense to me in both cases (poverty remediation - gun laws).

[russell]

Check writing to any but perhaps the first class isn't going to do much to advance anyone's interests.

I would say that "check writing" to groups 2 - 4 would get them fed and housed. That seems in everyone's interest, to me.

I'd also say that folks in groups 2 and 3 would benefit quite a bit from some simple instruction in basic life skills. Whatever we, collectively, were able to do along those line would fall, IMO, under the heading of "investment", and would basically be short money.

Last but not least, I'd say folks in group 4 - folks who are hampered by chronic emotional, psychological, or personality issues - can productively be considered to be disabled. I don't see a useful distinction between being unable to hold a job due to emotional disorder and being unable to hold a job due any other disorder.

A lot of those folks can be made quite productive through simple medical interventions - medications, counseling, what have you.

Some will never be able to overcome their problems, in which case I'd say "writing a check" to provide them with the necessities of life makes as much sense as doing so for folks who are, frex, unable to work due to physical disability.

My point of view only, obviously.

[Hartmut]

I would add a fifth group: those legally screwed by those that control the levers. Think something between company town and peonage. Has been worse in the past but great efforts are taken to get back there, I'd say.

[Brett Bellmore]

"I would say that "check writing" to groups 2 - 4 would get them fed and housed. That seems in everyone's interest, to me."

It occurs to me that just about anything you might do to benefit anybody would be judged, "in everyone's interest", if you ignore the cost. The complaint here has never been about people getting fed and housed, it's always been that it's happening at somebody else's expense.

[Phil]

Yeah, because the increased crime and other pathologies associated with poverty aren't costs. Only taxes are a cost.

[russell]

It occurs to me that just about anything you might do to benefit anybody would be judged, "in everyone's interest", if you ignore the cost. The complaint here has never been about people getting fed and housed, it's always been that it's happening at somebody else's expense.

Cost and who pays are orthogonal issues.

If there's no money, there's no money. If we get to (or are at) the point where we don't have the money to address the needs of needy people, we're in sorry shape.

Could be we actually are in sorry shape, my personal suspicion is that we just prefer to spend the money on other stuff.

Who pays is another question. If you are unwilling to pay for the negative consequences of an economic system whose upside you personally benefit from, IMO you're a free rider, for the reasons I've outlined above.

I take GOB's point about at what level of government the responsibility lies. Personally I don't much care who does stuff as long as what needs doing gets done. But I also don't see a problem with the feds addressing stuff that is actually national in scope. My opinion only, obviously.

[McKinneyTexas]

Russell, if someone is already paying at or just below half of their gross earnings in local, state and federal taxes, are they freeloading? Is it freeloading to pay in this amount and then disagree on spending priorities? I might point out that SS does not pay a poverty level subsistence living and it only goes to the elderly and disabled. SS, many say, is breaking the bank, particularly in association with Medicare and Medicaid. Can we really afford another entitlement program? One where we recognize the theoretical possibly that some will game the system, but we accept that because others will fall outside the system if it isn't sufficiently encompassing? Is is freeloading to raise these issues?

[McKinneyTexas]

Here's a SS link. Wish I knew how to do this better.

http://apnews.myway.com/article/20110127/D9L0BDUG0.html

[GoodOleBoy]

'I take GOB's point about at what level of government the responsibility lies.'

Just to elaborate my view, for any given issue that is deemed a social problem that exists to varying degrees across the nation, and for the sake of simplicity, assume there are 2 significantly different political approaches being advanced as solutions where the support is nationally equally divided but distributed something like (forgive this usage but it works) blue counties and red counties. If the effort to solve this social problem is centered at the national level, the typical outcome satisfies one group and not the other or results in a compromise that neither likes. If the responsibility is at the state and local areas, two or more solutions will emerge where more localized populations will be able to adopt an approach more suitable to the prevailing local social and political values, all while honoring all constitutional rights of its residents. In the former approach, as a U.S. resident, one has little choice once the solution approach is implemented (except at the ballot box). In the latter, the ability to change the social and political environment in which one resides is available.

The Second Amendment and gun control issues (on another thread) is a good example of the application of this concept. Within constitutional limitations expressed by the Courts, some localities may choose to have rules and regulations regarding gun ownership and possession and others may choose not to have such rules and regulations. This works for me.

[yods]

It would be interesting to know what fraction of your taxes actually go to SS, compared to say, the military.

[Turbulence]

SS, many say, is breaking the bank, particularly in association with Medicare and Medicaid.

The people who say that SS is breaking the bank are ignorant people.

Every year, the SS trustees make 3 projections: an optimistic one, a pessimistic one, and one in between. If you look at the in-between projection, you can see deficits that show up decades into the future. But looking at that is dumb: the in-between projection has been consistently wrong for over half a century. The optimistic projection has a much much better track record. And according to it, there's no problem. So yes, if you insist on ignoring the projection that has been accurate in favor of a projection that has consistently been wrong, we might have a problem several decades from now. But only an idiot would do that.

Medicare and Medicaid have real problems, but the cause of their problems is that healthcare costs, for everyone, are growing too fast. If Medicare/Medicaid didn't exist, we'd still be screwed because healthcare costs are growing too fast: private sector insurance has the exact same problem. So we need to find ways to reduce healthcare spending. If we don't, Medicare/Medicade and the private insurance will blow up.

[Phil]

SS, many say, is breaking the bank, particularly in association with Medicare and Medicaid.

If the responsibility is at the state and local areas, two or more solutions will emerge where more localized populations will be able to adopt an approach more suitable to the prevailing local social and political values, all while honoring all constitutional rights of its residents.

Yeah, that worked out pretty well with Jim Crow, huh?

[Phil]

Pretty rich for McKinneyTX to complain about SS breaking the bank while also having asked over the last year for it to be made even less solvent via an "SS Tax Holiday."

[cleek]

is there any way we could get conservatives to focus their intense hatred for system-gaming onto what gets spent on "defense" ?

for example...

[GoodOleBoy]

'Yeah, that worked out pretty well with Jim Crow, huh?'

Yeah, it didn't work for building the pyramids either.

[McKinneyTexas]

It would be interesting to know what fraction of your taxes actually go to SS, compared to say, the military.

Good question. Assume I pay the max tax of 37.9%. Defense spending is 23% of the budget per the link below. Let's call it 25%. Federal taxes are 76% of my tax load, which (I think) would make defense spending 19% of my total tax load. Since I am ok with most defense spending, other than a couple of wars I can think of, this is not a big issue for me. Parenthetically, as much as I wish we would leave Afghanistan, this link causes me much concern: http://www.dailymail.co.uk/news/article-1350945/Horrific-video-emerges-Taliban-fighters-stoning-couple-death-adultery.html

Here's the link on defense spending as a percentage of total spending: http://en.wikipedia.org/wiki/Military_budget_of_the_United_States

[russell]

Is is freeloading to raise these issues?

No. It's not freeloading to raise any issue.

IMO, it's freeloading to assume that it's not your responsibility to help out folks who are poor. And by "your responsibility", I mean as a positive obligation, and through public means, not noblesse oblige via charity.

Nothing wrong with charity, it's just not what I'm talking about.

I appreciate that you're paying a lot of taxes. My point is not about how much you, or anyone, should be paying. My point is that addressing the negative effects of the economy is part of the price of benefiting from its upside.

[McKinneyTexas]

Pretty rich for McKinneyTX to complain about SS breaking the bank while also having asked over the last year for it to be made even less solvent via an "SS Tax Holiday."

Rich indeed. A short term suspension to (hopefully) restart the economy in a far more efficient manner than congress picking winners and losers and then taking years to actually get the money in circulation. Long term, SS seems to have issues. Maybe only idiots believe that, but there seem to be a lot of idiots. I'm not an economist. When heavy state spenders on the domestic side, such as Turb, tell me "don't worry, be happy", I take that with a grain of salt. When someone on the far right tells me the party is over next week, I take that with a grain of salt too. My link seems authoritative, and telling me I'm a dumb*ss for raising it does not address the substance of the link.

[GoodOleBoy]

Turbulence:

I agree with your comment at 11:32 AM.

Many reports conflate the SS Trust Fund solvency issue with the national debt and annual budget deficit issues. Any need for adjustments to the Social Security taxes and benefits should be computed only using the Trust Fund. As the Trust Fund depletes, the Treasury Bonds it holds will be redeemed in order to pay benefits, and this means that if the national debt continues to increase, the Treasury will have to find other lenders, at likely higher interest rates than paid to the Trust Fund. This creates a need to deal with the constant annual deficits and growing national debt, but none of this is caused by Social Security.

[McKinneyTexas]

IMO, it's freeloading to assume that it's not your responsibility to help out folks who are poor. And by "your responsibility", I mean as a positive obligation, and through public means, not noblesse oblige via charity.

So, if I put 10 people to work, is that freeloading? Is the only way to help the poor via some governmental intermediary?

My point is that addressing the negative effects of the economy is part of the price of benefiting from its upside.

This is true only if your premise is true: that subsidizing people who can but won't work is an acceptable burden to lay on those who do work. Russell, in your world, the bar is set quite low as to who qualifies and for how long for "no strings (or "no meaningful strings")" subsistence living. It is hardly freeloading for any taxpayer to question your largess.

[McKinneyTexas]

As the Trust Fund depletes, the Treasury Bonds it holds will be redeemed in order to pay benefits, and this means that if the national debt continues to increase, the Treasury will have to find other lenders, at likely higher interest rates than paid to the Trust Fund.

The gov't secures a loan to itself with bonds it issues to itself. Who else could put that on a balance sheet and claim solvency? Seriously. I lend myself $1000 and then call the note: who pays the note?

[Phil]

'Yeah, that worked out pretty well with Jim Crow, huh?'

Yeah, it didn't work for building the pyramids either.

Yes, let's by all means compare literally ancient history to something that happened within some of our commenters' lifetimes. Great argument. Seriously.

This is true only if your premise is true: that subsidizing people who can but won't work is an acceptable burden to lay on those who do work.

There are as many negative consequences to not doing so as to doing so, but so far your only argument against it is "I don't wanna," which . . . well.

[cleek]

Seriously. I lend myself $1000 and then call the note: who pays the note?

the government is not a single, atomic, entity. it has multiple, distinct revenue streams funding multiple independent divisions, at least one of which is allowed to print money and issue bonds.

you don't.

[GoodOleBoy]

'The gov't secures a loan to itself with bonds it issues to itself. Who else could put that on a balance sheet and claim solvency? Seriously. I lend myself $1000 and then call the note: who pays the note?'

MKT:

Here's what I'm saying: The SS Trust Fund is made up of all the payments made by workers into the fund plus interest earned on loans to the general fund reduced by the amount of benefits paid out. The balance of that fund at present is positive. At the current and projected rate of the same transactions noted above, the fund will go negative at some future point. This requires some adjustments. But let's not pretend that benefits paid to Social Security recipients now or in the next few years have anything at all to do with our annual deficit and national debt problems and the fact that the federal government overall is insolvent at the moment (saved by its ability to monetize debt and tax its workers and wealth).

[GoodOleBoy]

'Yes, let's by all means compare literally ancient history to something that happened within some of our commenters' lifetimes. Great argument. Seriously.'

History is history and what's over is over. Except for those who can't let it go.

[Phil]

And those who don't learn from history are doomed to repeat it.

Assuming history is a guide to anything -- and you certainly think it is when it comes to what the sainted Founders wanted, don't you? -- then it's proven repeatedly that, when it comes to certain issues, the states cannot be trusted to play nicely or fairly.

[McKinneyTexas]

But let's not pretend that benefits paid to Social Security recipients now or in the next few years have anything at all to do with our annual deficit and national debt problems and the fact that the federal government overall is insolvent at the moment (saved by its ability to monetize debt and tax its workers and wealth).

Per the link above, SS is running negative this year. Projections, as the population ages, trend upward significantly. Redeeming bonds in the out years is functionally the same as someone paying him/herself back with their own money. If that person has no money to pay back, he/she borrows or defaults. Or, prints a bunch of money, if its the gov't. Hello, Greece.

[russell]

So, if I put 10 people to work, is that freeloading?

No. That is called "hiring people".

Is the only way to help the poor via some governmental intermediary?

No. It's not even the preferred way. Sometimes the preferred way is not sufficient.

This is true only if your premise is true: that subsidizing people who can but won't work is an acceptable burden to lay on those who do work.

Depends on why they "won't work". IMO.

It also depends on how many resources we want to spend on distinguishing the "worthy" from the "unworthy" poor, and how much of the benefit of actually helping people out we are willing to forgo to avoid inadvertently giving any of our money to the "unworthy".

Russell, in your world, the bar is set quite low as to who qualifies and for how long for "no strings (or "no meaningful strings")" subsistence living.

You're talking to the wrong guy. The guy you want to talk to regarding "no strings" is Charles Murray.

It is hardly freeloading for any taxpayer to question your largess.

Quite right.

Let's try once more, if that doesn't get it it's probably a waste of time to continue batting it back and forth.

In My Humble Opinion, a refusal to acknowledge a responsibility to help poor people, as a positive obligation, through public means, is freeloading. By which I mean, it is an example of being an economic free rider.

"Why?", I hear you ask.

Because we have an economy that is organized in a particular way, with that particular way established and enforced in that particular way by centuries of law, precedent, and common practice. We choose to do things the way we do.

One consequence of how our economy is organized is that some people will end up poor. Not because they are lazy or incapable or stupid or have bad grooming habits, but because *that is a natural consequence of the operation of the economy*.

Some folks end up poor. SOL. Up sh*t's creek without a paddle.

So if you enjoy the plentiful upsides of our economic system, as established and enforced by our entire political, legal, and social system, it behooves you to help out the folks who get screwed by it.

If you spill milk, you clean it up. That's what we do at my house, I'm sure you do the same at yours.

Will some people game a situation like that? Yes, they will. People game every freaking thing in the whole wide world. At some point you have to just accept that as the price of doing business and move on. And for "doing business", please read "living in a reasonably well-ordered and humane society".

If you want to go the Darwinian route, there are costs there too. Don't doubt it.

[McKinneyTexas]

Russell--we have the system we have because it works better than anyone else's system for a population our size. The number of poor in America, compared to any comparable sized country is, historically, minimal. There is no system that will eliminate poverty at the extreme without severely restricting individual liberty (we could limit childbirths, sterilize those who have children they can't support, etc, but only after a bloody revolution which neither you nor I, probably fighting on the same side, would survive). It is not as if nothing is done for the poor. The debate we're having is that it's not enough, or it is, depending on the viewpoint. My view is the best incentive to not be poor is to be that way and not like it or to see others that way and conclude it is not a good way to live.

[GoodOleBoy]

'Per the link above, SS is running negative this year. Projections, as the population ages, trend upward significantly. Redeeming bonds in the out years is functionally the same as someone paying him/herself back with their own money. If that person has no money to pay back, he/she borrows or defaults. Or, prints a bunch of money, if its the gov't. Hello, Greece.'

Nothing I'm saying disputes the overall picture you are describing or the overall national effect. I just would like to focus on what has created and continues to exacerbate the condition, namely, federal spending, but not for Social Security, which until recently, has been able to cover annual benefit payments from annual collections. Now that the time has come for the Trust Fund to need bond redemptions in addition to annual FICA collections to meet benefit payments requirements, suddenly the politicians are acting like the Social Security System is what is causing our deficit problems. This needs a lot of exposure for its falsity and we need to cut federal spending in programs other than Social Security benefits to deal with the deficit.

[russell]

That's all fine, McK.

The only thing I'm arguing against is the idea that it is not our responsibility, as citizens and participants in the society and economy, to help people who are poor and/or unemployed.

I want to establish, at least as my point of view, the idea that *we are obliged* to help each other when that's needed. Not because we're nice people, not as a matter of private virtue. As a public obligation.

If you play in the game, you gotta take the bad with the good. That is the sum and total of my point about "free riders" / "free loaders" / etc.