I suggest trying to actually help someone. With the bottom 20% of the population not being very sharp limits their ability to learn or navigate the welfare system. Many are un-mentorable when you try to help. You get their lives back on track and then they are underwater again with some silly decisions.
Our liberals don't try using their own resources and haven't learned that monopoly agencies make decisions in their own self-interest, which is rewarded by cutting benefits to the most needy and providing benefits to those whine the most and make them look productive.
I have tried to help some marginal people and it is hard and sometimes impossible. The people that really need help are often not competent enough to fill out stupid government forms and work the system. The marginal people without a "helper" in their corner will loose benefits from SSI to section 8 housing as some bureaucrat screws up.
There's a huge problem with mobility of citizens. Federal programs can tax people wherever they live, and can exclude recent immigrants. Without border control (or at least barriers to changing jurisdiction), states are very constrained in designing closed-loop programs.
Most people won't move just to optimize taxes, but some will. Living where taxes are low when you have income, and where benefits are high when you don't seems pretty tempting...
Another neoliberal social reform would be to de-link health insurance from employment. a) It raises unnecessary issues about employers imposing their preferences ("religious liberty or otherwise) on the insurance choices of employees. b) In practice it is much more expensive to employ low wage workers relative to their marginal product. It is just another wage tax to finance a consumption transfer, but a tax that is higher on low wage workers.
$2500 per year, per person, about $200 a month, would probably help a lot, to a very few unlucky but mostly responsible poor.
Yet this "per household" is just another testing scheme, if it's not per person. And if it IS per person, let it be clear it is per person. An unmarried woman with more kids gets more cash.
(not so good).
A man and a woman getting married lose no cash (very good).
The huge binary drop-offs in eligibility are the main means-test problem, either 100% or 0% of some benefit, at some clear level. Instead we need to move towards benefits at multiple levels, like 10% intervals of 90, 80 ... down to 20, 10, 0.
Maybe even 100 intervals of 1%.
But for most non-poor folks, it's a nice little UBI bonus that does help, tho for most poor folks, with bad lifestyle choices, it reduces their discomfort at continuing to live with their bad lifestyle choices, of some drug, alcohol, sex, gambling addiction or another.
What those poor folk need are jobs, and paths towards more self-respect.
I’m not sure what the absolute size of a governing entity has to do with the policy parameters of social programs.
I agree with raising the age eligibilities of Social Security, but mainly as a way of undermining th the idea of a “retirement age.”
Neither social security or Medicare not unemployment insurance should be financed with a wage tax. Use a VAT to tax consumption, not income.
The problem with too much devolution to states – great for innovation -- is that states for competitive reasons cannot tax very progressively. Maybe large unblocked grants could work.
I think we should just acknowledge that SS, Medicare, and Medicaid aren't going anywhere. It is immensely unpopular and has no constituency that supports it. Trends in recent times have been for expansion, and my own company thinks there is a realistic chance of lowering, rather than raising, the Medicare eligibility age. The electorate isn't getting any younger, and the party that is ideologically opposed to the welfare state is disproportionately old and white. I think it's time to be smart and stop wasting effort on this pipe dream.
It's pointless to lament that it will drive us to bankruptcy. Quite frankly, that is probably in the cards. Between now and bankrupt lets try our best.
I think the number one goal of reformers should be to reward higher TFR in the middle class. That's has the best effect on the long run fiscal situation. Earlier Medicare retirement age for people who had more kids! Big child tax credit that never fades out. School vouchers.
I hate means testing and I hate strings attached. Just get rid of them. Make benefits as universal and simple as possible.
Seems this should result in Fed gov actually doing what it should in light of the US Constitution. How would tax policy work under pushing lots downstream both at Fed level and local level?
Compare a remarkable study by Hilary Hoynes and Jesse Rothstein, "Universal Basic Income in the United States and Advanced Countries," Annual Review of Economics 11 (2019) 929-58. Here is a link to the un-gated typescript:
The authors find that UBIs are a very inefficient, costly way to alleviate poverty:
"We develop a framework for describing transfer programs, flexible enough to encompass most existing programs as well as UBIs, and use this framework to compare various UBIs to the existing constellation of programs. A UBI would direct much larger shares of transfers to childless, non-elderly, non-disabled households than existing programs, and much more to middle-income rather than poor households. A UBI large enough to increase transfers to low-income families would be enormously expensive." (Abstract)
The authors adduce some evidence that small UBIs -- i.e., UBIs roughly at the level Arnold Kling has in mind -- don't discourage work, but do increase children's body mass index:
"Universal but not basic income:
We know of only two examples of universal programs without strict eligibility requirements, though in each case the transfers are too small to qualify as a basic income as we define it. The Alaska Permanent Fund is a demogrant (with varying yearly payments), financed by the state’s oil revenues. Payments in recent years range from $1,000 to $2,000 per year. Jones and Marinescu (2018) use a synthetic control design to evaluate the program and find that the dividend had no effect on employment. They attribute this to a positive general equilibrium effect - the additional income leads to higher consumption, boosting labor demand – that offsets the negative income effect.
The Eastern Cherokee Native American tribe provides a demogrant to its adult members, financed out of revenues from tribal casinos. Payments, around $4,000 per person per year, do not depend on employment status, income, or residence on reservation. Several studies identify effects of the payments using difference-in-differences designs, comparing Native American children from families receiving the transfers to non-Native children from the same geographic area in North Carolina, before and after the transfers began. The payments had positive impacts on children’s educational attainment and criminal arrests (Akee et al, 2010) and on children’s emotional and behavioral health (Akee et al. 2018), though they increased children’s body mass indices (Akee et al. 2013). Akee et al. (2010) find no impact on labor force participation, even though the payment recipients were not a large share of the local labor force so general equilibrium effects were unlikely.
There is no reason to expect that families would have felt stigmatized for receiving payments under either the Alaska or the Eastern Cherokee programs. However, in each case the payments were relatively small. It is possible that a larger payment would have had more transformative effects on labor supply." (Section 6.A)
My intuition is that a crux of sound welfare reform is to re-calibrate means-tested programs with gradual phase-outs that encourage work. Or is that like squaring a circle?
But the economics of welfare programs are secondary. The primary problem is culture, especially norms of responsible household formation.
I agree with a phase out of existing Federal programs dealing with economic hardship. I have two questions however.
First, regarding social security and medicare, is not the most equitable manner of phase-out simply doing away with those programs for anyone who has not yet begun to pay in? Mortality would take care of the rest.
Second, why must discarded government programs be replaced with other government-sponsored welfare programs? There was a time when most aid was private in nature. One might argue that government welfare programs "crowd-out" the myriad of private and charitable organizations that have historically dealt with these problems. Given that "[t]he more remote you are from individuals, the less likely that you will design and implement programs that target their needs", it seems private organizations based in communities would be far better at dealing with true cases of need. Private aid would also help resolve incentive problems that arise from government aid.
If there weren't such a problem with polarization of cultural and moral values in the United States, I would be much more sanguine about these ideas. Unfortunately in many regions of the country, the norm is that the poor should never face accountability of any sort, while the norm everywhere else is hatred of the poor.
Perhaps an equilibrium would eventually be reached after people adjust to the new incentives created by the new system. I can't imagine that process taking much less than a century, though, in which time the suffering incurred would be massive in scale. That is my prediction at least.
It's generally recognized that the crazy-quilt of benefits is suboptimal. What are the factors that prevent a large scale compromise that consolidates them? What kind of compromises would work?
What I think this misses is the reason why SS and Medicare exist, which is that corporate lobbyists during the New Deal era sought to externalize their pension costs to the federal government, having been dissatisfied with the competition between states that resulted in the externalization of those costs to the state. Political progressives have promoted a myth that welfare is about being nice to people, because they are just such angels, or that the government is "better" at providing this type of compensation than companies are.
Neoliberals tend to be more in favor of corporate dynamism and competition than the New Deal corporatists were. The quandary is that corporations themselves are not terribly in favor of dynamism and competition: rather, they will use as much state power as they can grasp at to limit competition. So the issue is not really the people so much as it is imposing discipline on corporate America, properly reifying their costs away from the government and towards their own coffers.
I agree that welfare should not be comfortable. A modest proposal for means testing would be that anyone getting public assistance should be put to the same relatively strict household budget tests that are imposed by federal bankruptcy courts. It makes no sense whatsoever that judges will put bankrupt people on a budget, but other branches of the same government will stand by as many exploit the welfare system to live lush lifestyles. For example, my mother is a millionaire who owns European beach property, but she bills her expensive experimental brain cancer treatments to the government because she like anyone else of any sophistication appears to be a pauper deserving of the deluxe super-Cadillac health plans provided by the government. She doesn't pay a penny. And there are many like her!
The current system is a hodge-podge of Federal, local and state resources, with federal grants, federal revenue sharing and federal programs. And constraints created by a mix of poor individuals, poor families, poor neighborhoods, poor cities, poor counties, and poor states. Today’s column is maririage counseling by a priest.
I suggest trying to actually help someone. With the bottom 20% of the population not being very sharp limits their ability to learn or navigate the welfare system. Many are un-mentorable when you try to help. You get their lives back on track and then they are underwater again with some silly decisions.
Our liberals don't try using their own resources and haven't learned that monopoly agencies make decisions in their own self-interest, which is rewarded by cutting benefits to the most needy and providing benefits to those whine the most and make them look productive.
I have tried to help some marginal people and it is hard and sometimes impossible. The people that really need help are often not competent enough to fill out stupid government forms and work the system. The marginal people without a "helper" in their corner will loose benefits from SSI to section 8 housing as some bureaucrat screws up.
There's a huge problem with mobility of citizens. Federal programs can tax people wherever they live, and can exclude recent immigrants. Without border control (or at least barriers to changing jurisdiction), states are very constrained in designing closed-loop programs.
Most people won't move just to optimize taxes, but some will. Living where taxes are low when you have income, and where benefits are high when you don't seems pretty tempting...
Another neoliberal social reform would be to de-link health insurance from employment. a) It raises unnecessary issues about employers imposing their preferences ("religious liberty or otherwise) on the insurance choices of employees. b) In practice it is much more expensive to employ low wage workers relative to their marginal product. It is just another wage tax to finance a consumption transfer, but a tax that is higher on low wage workers.
$2500 per year, per person, about $200 a month, would probably help a lot, to a very few unlucky but mostly responsible poor.
Yet this "per household" is just another testing scheme, if it's not per person. And if it IS per person, let it be clear it is per person. An unmarried woman with more kids gets more cash.
(not so good).
A man and a woman getting married lose no cash (very good).
The huge binary drop-offs in eligibility are the main means-test problem, either 100% or 0% of some benefit, at some clear level. Instead we need to move towards benefits at multiple levels, like 10% intervals of 90, 80 ... down to 20, 10, 0.
Maybe even 100 intervals of 1%.
But for most non-poor folks, it's a nice little UBI bonus that does help, tho for most poor folks, with bad lifestyle choices, it reduces their discomfort at continuing to live with their bad lifestyle choices, of some drug, alcohol, sex, gambling addiction or another.
What those poor folk need are jobs, and paths towards more self-respect.
I’m not sure what the absolute size of a governing entity has to do with the policy parameters of social programs.
I agree with raising the age eligibilities of Social Security, but mainly as a way of undermining th the idea of a “retirement age.”
Neither social security or Medicare not unemployment insurance should be financed with a wage tax. Use a VAT to tax consumption, not income.
The problem with too much devolution to states – great for innovation -- is that states for competitive reasons cannot tax very progressively. Maybe large unblocked grants could work.
I think we should just acknowledge that SS, Medicare, and Medicaid aren't going anywhere. It is immensely unpopular and has no constituency that supports it. Trends in recent times have been for expansion, and my own company thinks there is a realistic chance of lowering, rather than raising, the Medicare eligibility age. The electorate isn't getting any younger, and the party that is ideologically opposed to the welfare state is disproportionately old and white. I think it's time to be smart and stop wasting effort on this pipe dream.
It's pointless to lament that it will drive us to bankruptcy. Quite frankly, that is probably in the cards. Between now and bankrupt lets try our best.
I think the number one goal of reformers should be to reward higher TFR in the middle class. That's has the best effect on the long run fiscal situation. Earlier Medicare retirement age for people who had more kids! Big child tax credit that never fades out. School vouchers.
I hate means testing and I hate strings attached. Just get rid of them. Make benefits as universal and simple as possible.
Seems this should result in Fed gov actually doing what it should in light of the US Constitution. How would tax policy work under pushing lots downstream both at Fed level and local level?
Compare a remarkable study by Hilary Hoynes and Jesse Rothstein, "Universal Basic Income in the United States and Advanced Countries," Annual Review of Economics 11 (2019) 929-58. Here is a link to the un-gated typescript:
https://gspp.berkeley.edu/assets/uploads/research/pdf/Hoynes-Rothstein-UBI-081518.pdf
The authors find that UBIs are a very inefficient, costly way to alleviate poverty:
"We develop a framework for describing transfer programs, flexible enough to encompass most existing programs as well as UBIs, and use this framework to compare various UBIs to the existing constellation of programs. A UBI would direct much larger shares of transfers to childless, non-elderly, non-disabled households than existing programs, and much more to middle-income rather than poor households. A UBI large enough to increase transfers to low-income families would be enormously expensive." (Abstract)
The authors adduce some evidence that small UBIs -- i.e., UBIs roughly at the level Arnold Kling has in mind -- don't discourage work, but do increase children's body mass index:
"Universal but not basic income:
We know of only two examples of universal programs without strict eligibility requirements, though in each case the transfers are too small to qualify as a basic income as we define it. The Alaska Permanent Fund is a demogrant (with varying yearly payments), financed by the state’s oil revenues. Payments in recent years range from $1,000 to $2,000 per year. Jones and Marinescu (2018) use a synthetic control design to evaluate the program and find that the dividend had no effect on employment. They attribute this to a positive general equilibrium effect - the additional income leads to higher consumption, boosting labor demand – that offsets the negative income effect.
The Eastern Cherokee Native American tribe provides a demogrant to its adult members, financed out of revenues from tribal casinos. Payments, around $4,000 per person per year, do not depend on employment status, income, or residence on reservation. Several studies identify effects of the payments using difference-in-differences designs, comparing Native American children from families receiving the transfers to non-Native children from the same geographic area in North Carolina, before and after the transfers began. The payments had positive impacts on children’s educational attainment and criminal arrests (Akee et al, 2010) and on children’s emotional and behavioral health (Akee et al. 2018), though they increased children’s body mass indices (Akee et al. 2013). Akee et al. (2010) find no impact on labor force participation, even though the payment recipients were not a large share of the local labor force so general equilibrium effects were unlikely.
There is no reason to expect that families would have felt stigmatized for receiving payments under either the Alaska or the Eastern Cherokee programs. However, in each case the payments were relatively small. It is possible that a larger payment would have had more transformative effects on labor supply." (Section 6.A)
My intuition is that a crux of sound welfare reform is to re-calibrate means-tested programs with gradual phase-outs that encourage work. Or is that like squaring a circle?
But the economics of welfare programs are secondary. The primary problem is culture, especially norms of responsible household formation.
My guess is that even w/o a federal income tax states would have marginal rates lower than 37%
Jew will not tolerate any such thing.
I agree with a phase out of existing Federal programs dealing with economic hardship. I have two questions however.
First, regarding social security and medicare, is not the most equitable manner of phase-out simply doing away with those programs for anyone who has not yet begun to pay in? Mortality would take care of the rest.
Second, why must discarded government programs be replaced with other government-sponsored welfare programs? There was a time when most aid was private in nature. One might argue that government welfare programs "crowd-out" the myriad of private and charitable organizations that have historically dealt with these problems. Given that "[t]he more remote you are from individuals, the less likely that you will design and implement programs that target their needs", it seems private organizations based in communities would be far better at dealing with true cases of need. Private aid would also help resolve incentive problems that arise from government aid.
If there weren't such a problem with polarization of cultural and moral values in the United States, I would be much more sanguine about these ideas. Unfortunately in many regions of the country, the norm is that the poor should never face accountability of any sort, while the norm everywhere else is hatred of the poor.
Perhaps an equilibrium would eventually be reached after people adjust to the new incentives created by the new system. I can't imagine that process taking much less than a century, though, in which time the suffering incurred would be massive in scale. That is my prediction at least.
It's generally recognized that the crazy-quilt of benefits is suboptimal. What are the factors that prevent a large scale compromise that consolidates them? What kind of compromises would work?
What I think this misses is the reason why SS and Medicare exist, which is that corporate lobbyists during the New Deal era sought to externalize their pension costs to the federal government, having been dissatisfied with the competition between states that resulted in the externalization of those costs to the state. Political progressives have promoted a myth that welfare is about being nice to people, because they are just such angels, or that the government is "better" at providing this type of compensation than companies are.
Neoliberals tend to be more in favor of corporate dynamism and competition than the New Deal corporatists were. The quandary is that corporations themselves are not terribly in favor of dynamism and competition: rather, they will use as much state power as they can grasp at to limit competition. So the issue is not really the people so much as it is imposing discipline on corporate America, properly reifying their costs away from the government and towards their own coffers.
I agree that welfare should not be comfortable. A modest proposal for means testing would be that anyone getting public assistance should be put to the same relatively strict household budget tests that are imposed by federal bankruptcy courts. It makes no sense whatsoever that judges will put bankrupt people on a budget, but other branches of the same government will stand by as many exploit the welfare system to live lush lifestyles. For example, my mother is a millionaire who owns European beach property, but she bills her expensive experimental brain cancer treatments to the government because she like anyone else of any sophistication appears to be a pauper deserving of the deluxe super-Cadillac health plans provided by the government. She doesn't pay a penny. And there are many like her!
The current system is a hodge-podge of Federal, local and state resources, with federal grants, federal revenue sharing and federal programs. And constraints created by a mix of poor individuals, poor families, poor neighborhoods, poor cities, poor counties, and poor states. Today’s column is maririage counseling by a priest.