https://www.cbpp.org/press/statements/in-pandemics-second-year-government-policies-helped-drive-child-poverty-rate-to-a
Jump for joy. Did anyone think to factor in 8% inflation, ongoing, and more rate hikes?
QuoteThe expanded Child Tax Credit alone kept 5.3 million people above the annual poverty line and helped drive a stunning reduction in child poverty to a record low.
'Stunning' strikes me as not neutral language; more like spin. Do these people work for the democratic party too? Now that we know the republican party is a threat to our freedom, I guess all kinds of new things are now justified.
From the article:
"Indeed, we find that it is also the lowest back to 1967, analyzing historical data from researchers at Columbia University and adjusting 2021's poverty threshold backward for inflation."
Sure, backward...I was thinking of 'going forward.'
I understand your thinking. Wages went up significantly, so the adjustment is supposed to offset that I think.
Not a lot of interest in discussing this, so I won't be posting anything else. For me the historical aspect was really significant, as well as the fact that while wages had gone up many were still out of work or underemployed. Maybe adds some more justification for a UBI, IMO.
Just hope Sen. Manchin noticed.
Quote from: jimbogumbo on September 14, 2022, 06:55:46 PM
I understand your thinking. Wages went up significantly, so the adjustment is supposed to offset that I think.
Not a lot of interest in discussing this, so I won't be posting anything else. For me the historical aspect was really significant, as well as the fact that while wages had gone up many were still out of work or underemployed. Maybe adds some more justification for a UBI, IMO.
Just hope Sen. Manchin noticed.
Not surprising. Most of the people on the forum voted us into this situation. The less said the better.
Hmm, vs., say, Jan 1, 2021, how many people here have experienced a significant increase in their wages/ salary, at least to the level of the inflation since then? How many nationally?
Quote from: jimbogumbo on September 14, 2022, 06:55:46 PM
I understand your thinking. Wages went up significantly, so the adjustment is supposed to offset that I think.
Not a lot of interest in discussing this, so I won't be posting anything else. For me the historical aspect was really significant, as well as the fact that while wages had gone up many were still out of work or underemployed. Maybe adds some more justification for a UBI, IMO.
Just hope Sen. Manchin noticed.
I don't pretend to understand UBI. If you have insight/knowledge, might you explain. And we will ignore ......
Quote from: nebo113 on September 15, 2022, 03:51:06 PM
Quote from: jimbogumbo on September 14, 2022, 06:55:46 PM
I understand your thinking. Wages went up significantly, so the adjustment is supposed to offset that I think.
Not a lot of interest in discussing this, so I won't be posting anything else. For me the historical aspect was really significant, as well as the fact that while wages had gone up many were still out of work or underemployed. Maybe adds some more justification for a UBI, IMO.
...
I don't pretend to understand UBI. If you have insight/knowledge, might you explain. And we will ignore ......
This is a perfectly reasonable article about a fall in child poverty attributable to transfer payments triggered by the Covid problem. It is descriptive, and as far as I can tell correct. The article even recognizes that the official poverty measure, on its own terms, grossly overestimates poverty. Inflation is a red herring, for the poverty measure is recalculated every year in nominal terms.
Yes, money wages have gone up, but because of inflation, real wages have declined. So, this time around wage growth has not contributed.
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
Quote from: dismalist on September 15, 2022, 04:28:30 PM
Quote from: nebo113 on September 15, 2022, 03:51:06 PM
Quote from: jimbogumbo on September 14, 2022, 06:55:46 PM
I understand your thinking. Wages went up significantly, so the adjustment is supposed to offset that I think.
Not a lot of interest in discussing this, so I won't be posting anything else. For me the historical aspect was really significant, as well as the fact that while wages had gone up many were still out of work or underemployed. Maybe adds some more justification for a UBI, IMO.
...
I don't pretend to understand UBI. If you have insight/knowledge, might you explain. And we will ignore ......
This is a perfectly reasonable article about a fall in child poverty attributable to transfer payments triggered by the Covid problem. It is descriptive, and as far as I can tell correct. The article even recognizes that the official poverty measure, on its own terms, grossly overestimates poverty. Inflation is a red herring, for the poverty measure is recalculated every year in nominal terms.
Yes, money wages have gone up, but because of inflation, real wages have declined. So, this time around wage growth has not contributed.
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
I always wonder this when I read someone who knows a lot about taxes: how could the tax code be tweaked to incentivize fathers to live with their children instead of taking off? Or to incentivize mothers to work harder to keep the man of the house around. Maybe not much if the people affected don't earn enough to pay tax....?
The best way for mothers to raise money is be part of a team. And fewer and fewer are.
Quote from: mahagonny on September 15, 2022, 05:48:17 PM
Quote from: dismalist on September 15, 2022, 04:28:30 PM
Quote from: nebo113 on September 15, 2022, 03:51:06 PM
Quote from: jimbogumbo on September 14, 2022, 06:55:46 PM
I understand your thinking. Wages went up significantly, so the adjustment is supposed to offset that I think.
Not a lot of interest in discussing this, so I won't be posting anything else. For me the historical aspect was really significant, as well as the fact that while wages had gone up many were still out of work or underemployed. Maybe adds some more justification for a UBI, IMO.
...
I don't pretend to understand UBI. If you have insight/knowledge, might you explain. And we will ignore ......
This is a perfectly reasonable article about a fall in child poverty attributable to transfer payments triggered by the Covid problem. It is descriptive, and as far as I can tell correct. The article even recognizes that the official poverty measure, on its own terms, grossly overestimates poverty. Inflation is a red herring, for the poverty measure is recalculated every year in nominal terms.
Yes, money wages have gone up, but because of inflation, real wages have declined. So, this time around wage growth has not contributed.
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
I always wonder this when I read someone who knows a lot about taxes: how could the tax code be tweaked to incentivize fathers to live with their children instead of taking off? Or to incentivize mothers to work harder to keep the man of the house around. Maybe not much if the people affected don't earn enough to pay tax....?
The best way for mothers to raise money is be part of a team. And fewer and fewer are.
Institute a Universal Basic Income [Negative Income Tax] as a substitute for existing means tested welfare programs. Make the tax rate on earned income something reasonable, not the 100% it now is in certain cases.
Quote from: dismalist on September 15, 2022, 04:28:30 PM
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
UBI universalizes receiving a handout (no strings attached), which reinforces an entitlement mentality. Also, labor supply is down among men, who generally don't receive as much in welfare benefits as women. I'm concerned that the income effect of UBI will dominate among that group of younger men who are averse to work.
Quote from: Anon1787 on September 15, 2022, 06:36:34 PM
Quote from: dismalist on September 15, 2022, 04:28:30 PM
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
UBI universalizes receiving a handout (no strings attached), which reinforces an entitlement mentality. Also, labor supply is down among men, who generally don't receive as much in welfare benefits as women. I'm concerned that the income effect of UBI will dominate among that group of younger men who are averse to work.
The margin, the margin! UBI as a substitute for what we have now, not an addition. What we have now is a destroyer of work incentives, not because of the level of aid, but because of the conditions for aid: Earn an extra dollar and we take it away.
There is no difference in principle between aid for poor men and poor women. A practical difference results because women take care of children, and it's therefore the women who get more aid and are most affected by the means testing.
One can spend the same amount as now on aid, just changes its conditions, and no one can be worse off, while the poor will be better off.
The earned income tax credit incentivizes working. The idea that you earn a dollar and your benefits fall by a dollar is literally from a different century when we had AFDC instead of TANF.
The fact that government policy can dramatically decrease the number of children living in poverty is a big deal.
Recently there has been a couple of stories in the NYT about families in poverty - I wasn't really crazy about the feature on the father wasn't working much while he was getting an online degree in "music production," as I don't think the ROI is very high on that, but in the recent stories low-income working families are described as getting $8,000-$10,000 a year in "refundable tax credits" - that's the Earned Income Tax Credit. Here is a story about low-income families in West Virginia.
https://www.nytimes.com/2022/09/12/us/politics/child-poverty-families-west-virginia.html
"After welfare reform, the focus of the government's anti-poverty efforts shifted from people who weren't working to people who were — and, thanks partly to the generosity of the new programs, child poverty plummeted. The size of the decline, Dana Thomson, a co-author of the study, said, "is unequaled in the history of poverty measurement."
https://www.nytimes.com/2022/09/14/briefing/child-poverty-plunging-us-economy.html
And someone above asked if the tax system could be tweaked to: "to incentivize mothers to work harder to keep the man of the house around.
Mothers need to WORK HARDER to keep the man of the house around? Is this really the policy problem? My goodness, people.
Quote from: Dismal on September 15, 2022, 10:12:18 PM
Recently there has been a couple of stories in the NYT about families in poverty - I wasn't really crazy about the feature on the father wasn't working much while he was getting an online degree in "music production," as I don't think the ROI is very high on that, but in the recent stories low-income working families are described as getting $8,000-$10,000 a year in "refundable tax credits" - that's the Earned Income Tax Credit. Here is a story about low-income families in West Virginia.
https://www.nytimes.com/2022/09/12/us/politics/child-poverty-families-west-virginia.html
"After welfare reform, the focus of the government's anti-poverty efforts shifted from people who weren't working to people who were — and, thanks partly to the generosity of the new programs, child poverty plummeted. The size of the decline, Dana Thomson, a co-author of the study, said, "is unequaled in the history of poverty measurement."
https://www.nytimes.com/2022/09/14/briefing/child-poverty-plunging-us-economy.html
You might be wrong. This guy may have talents and skills that with a degree and the knowledge it provides, he would be able to put to good use and earn a lot more money. I know a guy who does sound production and design for live performances. He always seems to be in demand and does well financially. Probably better to let this guy and his family make these decisions instead of trying to judge from afar whether his degree will have a good ROI.
Besides,
Quote from: Dismal on September 15, 2022, 10:18:39 PM
And someone above asked if the tax system could be tweaked to: "to incentivize mothers to work harder to keep the man of the house around.
Mothers need to WORK HARDER to keep the man of the house around? Is this really the policy problem? My goodness, people.
Yes they do, some. Marital harmony and fulfillment is a collaboration. I think any marriage/relationship counselor would them tell there's work involved.
Groceries with largest year over year increase by percentage:
Eggs 39.8%
Margarine: 38.3%
Butter: 24.6%
Flour/prepared flour mixes: 23.3%
Olives, pickles, relish: 19.4%
Quote from: jimbogumbo on September 16, 2022, 09:52:56 AM
Groceries with largest year over year increase by percentage:
Eggs 39.8%
Margarine: 38.3%
Butter: 24.6%
Flour/prepared flour mixes: 23.3%
Olives, pickles, relish: 19.4%
And "wine at home" prices increased a mere 2.5% year-on-year. Eat fewer eggs, drink more wine, and feed children with savings. :-)
Quote from: Anon1787 on September 15, 2022, 06:36:34 PM
Quote from: dismalist on September 15, 2022, 04:28:30 PM
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
UBI universalizes receiving a handout (no strings attached), which reinforces an entitlement mentality. Also, labor supply is down among men, who generally don't receive as much in welfare benefits as women. I'm concerned that the income effect of UBI will dominate among that group of younger men who are averse to work.
The thing with UBI proponents is that they love to move the goalposts, sometimes to the point of full-blown doublespeak. If you define "universal" as "all resident adult citizens" (a pretty narrow definition, as it excludes all minors, green card holders, citizens living abroad (who, in the case of the US, are still liable for taxes), etc) and "basic" as anything resembling the federal minimum wage, then it's basic arithmetic that it's pie-in-the-sky unaffordable by the US - as in, not even in the same order of magnitude as affordable. That's where the moving goalposts come in - "universal" means "a minority" (existing welfare recipients, for example) or "a lottery won by a tiny minority of citizens" ("pilot programs" in Europe); "basic" means "peanuts even compared to the minimum wage," etc.
UBI does exist, kind of - in the Gulf countries. The result hasn't been an explosion in entrepreneurship and creativity - the result has been the entrenching of a parasitic aristocracy reliant on imported labor to do the actual work and the inability to competitively produce anything domestically other than hydrocarbons and terrorists.
Perhaps a better model is Sweden, which apparently has carefully designed its welfare system (and its minimum wage) so that it always pays more to work - yes, you can basically live your whole life there without working, but there are always financial incentives to get a job.
Quote from: Stockmann on September 16, 2022, 11:30:53 AM
Quote from: Anon1787 on September 15, 2022, 06:36:34 PM
Quote from: dismalist on September 15, 2022, 04:28:30 PM
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
UBI universalizes receiving a handout (no strings attached), which reinforces an entitlement mentality. Also, labor supply is down among men, who generally don't receive as much in welfare benefits as women. I'm concerned that the income effect of UBI will dominate among that group of younger men who are averse to work.
The thing with UBI proponents is that they love to move the goalposts, sometimes to the point of full-blown doublespeak. If you define "universal" as "all resident adult citizens" (a pretty narrow definition, as it excludes all minors, green card holders, citizens living abroad (who, in the case of the US, are still liable for taxes), etc) and "basic" as anything resembling the federal minimum wage, then it's basic arithmetic that it's pie-in-the-sky unaffordable by the US - as in, not even in the same order of magnitude as affordable. That's where the moving goalposts come in - "universal" means "a minority" (existing welfare recipients, for example) or "a lottery won by a tiny minority of citizens" ("pilot programs" in Europe); "basic" means "peanuts even compared to the minimum wage," etc.
UBI does exist, kind of - in the Gulf countries. The result hasn't been an explosion in entrepreneurship and creativity - the result has been the entrenching of a parasitic aristocracy reliant on imported labor to do the actual work and the inability to competitively produce anything domestically other than hydrocarbons and terrorists.
Perhaps a better model is Sweden, which apparently has carefully designed its welfare system (and its minimum wage) so that it always pays more to work - yes, you can basically live your whole life there without working, but there are always financial incentives to get a job.
Methinks the gentleman doth protest too much.
It's only ever about two things, which need not be tradeoffs tradeoffs -- generosity and the incentive to work.
The incentive to work is preserved with a reasonable marginal tax rate, not like losing a benefit 'cause you earned too much.
The generosity of the system is up to our collective taste. A perfectly viable UBI would not spend one dollar more on transfer payments that are already paid.
Quote from: dismalist on September 16, 2022, 12:12:42 PM
Quote from: Stockmann on September 16, 2022, 11:30:53 AM
Quote from: Anon1787 on September 15, 2022, 06:36:34 PM
Quote from: dismalist on September 15, 2022, 04:28:30 PM
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
UBI universalizes receiving a handout (no strings attached), which reinforces an entitlement mentality. Also, labor supply is down among men, who generally don't receive as much in welfare benefits as women. I'm concerned that the income effect of UBI will dominate among that group of younger men who are averse to work.
The thing with UBI proponents is that they love to move the goalposts, sometimes to the point of full-blown doublespeak. If you define "universal" as "all resident adult citizens" (a pretty narrow definition, as it excludes all minors, green card holders, citizens living abroad (who, in the case of the US, are still liable for taxes), etc) and "basic" as anything resembling the federal minimum wage, then it's basic arithmetic that it's pie-in-the-sky unaffordable by the US - as in, not even in the same order of magnitude as affordable. That's where the moving goalposts come in - "universal" means "a minority" (existing welfare recipients, for example) or "a lottery won by a tiny minority of citizens" ("pilot programs" in Europe); "basic" means "peanuts even compared to the minimum wage," etc.
UBI does exist, kind of - in the Gulf countries. The result hasn't been an explosion in entrepreneurship and creativity - the result has been the entrenching of a parasitic aristocracy reliant on imported labor to do the actual work and the inability to competitively produce anything domestically other than hydrocarbons and terrorists.
Perhaps a better model is Sweden, which apparently has carefully designed its welfare system (and its minimum wage) so that it always pays more to work - yes, you can basically live your whole life there without working, but there are always financial incentives to get a job.
Methinks the gentleman doth protest too much.
It's only ever about two things, which need not be tradeoffs tradeoffs -- generosity and the incentive to work.
The incentive to work is preserved with a reasonable marginal tax rate, not like losing a benefit 'cause you earned too much.
The generosity of the system is up to our collective taste. A perfectly viable UBI would not spend one dollar more on transfer payments that are already paid.
*yawn*
If you spread the existing transfer payments in any way that could plausibly be called "universal" it would amount to peanuts per person, not even in the same ballpark as the minimum wage (so much less than "basic"). if memory serves from when I did the math, it would amount to a few k per year, depending exactly on what you count as welfare - and that's if divided among adult American citizens only, if you include minors, green card holders, etc it works out to be even less. The incentive to work can be maintained by a system of conditional payments, etc, and/or restrictions like a lifetime maximum, etc but that's also not "universal." Even if there is some financial incentive to work, some people will always choose not to work if they can survive without working (as seen in a number of European countries... and the Gulf states, on a much bigger scale). There's a reason the only countries having anything that could plausibly be called UBI have a modest population and are drowning in oil money. Even Venezuela, with the world's largest proven oil reserves, couldn't sustain anything like it.
That's challenging the label and the generosity, not the analysis of incentives.
The generosity we all have different views about, as I said.
It's better to think of this as a negative income tax. Recipients start paying taxes on the first dollar earned, just not at the absurd rate of 100%. That preserves the incentive to work.
As this is meant to be a substitute for existing welfare programs, there is no automatism to spend a dollar more on transfers than is spent now.
Of course, the political appeal of the word "universal" may well be that we think everybody gets $5K per month and keeps all of it when he starts working! Forgedddabouddit!
Quote from: dismalist on September 16, 2022, 06:00:43 PM
That's challenging the label and the generosity, not the analysis of incentives.
The generosity we all have different views about, as I said.
It's better to think of this as a negative income tax. Recipients start paying taxes on the first dollar earned, just not at the absurd rate of 100%. That preserves the incentive to work.
As this is meant to be a substitute for existing welfare programs, there is no automatism to spend a dollar more on transfers than is spent now.
Of course, the political appeal of the word "universal" may well be that we think everybody gets $5K per month and keeps all of it when he starts working! Forgedddabouddit!
Eh, don't let me be a bother to anyone. I don't have to work.
Quote from: Anon1787 on September 15, 2022, 06:36:34 PM
Quote from: dismalist on September 15, 2022, 04:28:30 PM
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
UBI universalizes receiving a handout (no strings attached), which reinforces an entitlement mentality. Also, labor supply is down among men, who generally don't receive as much in welfare benefits as women. I'm concerned that the income effect of UBI will dominate among that group of younger men who are averse to work.
I encourage everyone to look at the effects when the Eastern Band of Cherokees started paying out casino profits to enrolled tribe members who happened to also be part of the ongoing Great Smoky Mountains Study of Youth. (hint — huge decreases in childhood emotional, behavioral, and psychiatric issues, with no impact on labor participation publications here (https://jamanetwork.com/journals/jama/fullarticle/197482) and here (https://pubmed.ncbi.nlm.nih.gov/20483972/) and here (https://ucla.app.box.com/s/ejz4xstgif1jd2jey1rwrypd00foyna7))
Quote from: dismalist on September 16, 2022, 06:00:43 PM
That's challenging the label and the generosity, not the analysis of incentives.
The generosity we all have different views about, as I said.
It's better to think of this as a negative income tax. Recipients start paying taxes on the first dollar earned, just not at the absurd rate of 100%. That preserves the incentive to work.
As this is meant to be a substitute for existing welfare programs, there is no automatism to spend a dollar more on transfers than is spent now.
Of course, the political appeal of the word "universal" may well be that we think everybody gets $5K per month and keeps all of it when he starts working! Forgedddabouddit!
What if men averse to working end up with more income under a UBI than under current welfare rules? They won't care about the lower marginal tax rate on work and will just buy more (or more comfortable) leisure.
Quote from: onthefringe on September 17, 2022, 06:55:16 PM
Quote from: Anon1787 on September 15, 2022, 06:36:34 PM
Quote from: dismalist on September 15, 2022, 04:28:30 PM
Public discussion of aid to the poor focuses on "how much" to give, how much is fair, and so on. Some want for others to get more, some want to give less. This discussion is human, understandable, and omits something important. What is relevant for incentives is not the money one receives, but the money one loses when one works. With all the benefit losses upon earning one dollar more through means testing, the poor face marginal tax rates that would make the rich blush.
The idea of a UBI, a Universal Basic Income, or Negative Income Tax, is to substitute all the particular benefits the poor are entitled to with a single transfer. If they work more, they would pay some reasonable tax rate on each extra dollar they earned, not lose all their means tested benefits.
The child credit has a lot of the characteristics of the UBI -- if one works more, one doesn't lose the benefit. However, it leaves an incentive to have more children, though that may well be smaller than under the current system.
My guess is that a reform of the welfare system to the UBI would promote additional work more than it would promote having additional children.
UBI universalizes receiving a handout (no strings attached), which reinforces an entitlement mentality. Also, labor supply is down among men, who generally don't receive as much in welfare benefits as women. I'm concerned that the income effect of UBI will dominate among that group of younger men who are averse to work.
I encourage everyone to look at the effects when the Eastern Band of Cherokees started paying out casino profits to enrolled tribe members who happened to also be part of the ongoing Great Smoky Mountains Study of Youth. (hint — huge decreases in childhood emotional, behavioral, and psychiatric issues, with no impact on labor participation publications here (https://jamanetwork.com/journals/jama/fullarticle/197482) and here (https://pubmed.ncbi.nlm.nih.gov/20483972/) and here (https://ucla.app.box.com/s/ejz4xstgif1jd2jey1rwrypd00foyna7))
Lovely, fringe, I like! If these researchers want to show that having more income is a good thing, that's fine. However, I never had any doubt that having higher income is a good thing. What is interesting here is in the third link, which mentions the conditions under which the extra income was distributed:
A portion of the profits from this new business operation is distributed every six months on an equalized, per capita basis to all adult tribal members regardless of employment status, income, or other household characteristics.No conditions! If one works more, the cash is not taken away:
Therefore, it appears that households affected by cash transfers are not reducing their labor force participation.Wonderful.
Quote from: onthefringe on September 17, 2022, 06:55:16 PM
I encourage everyone to look at the effects when the Eastern Band of Cherokees started paying out casino profits to enrolled tribe members who happened to also be part of the ongoing Great Smoky Mountains Study of Youth. (hint — huge decreases in childhood emotional, behavioral, and psychiatric issues, with no impact on labor participation publications here (https://jamanetwork.com/journals/jama/fullarticle/197482) and here (https://pubmed.ncbi.nlm.nih.gov/20483972/) and here (https://ucla.app.box.com/s/ejz4xstgif1jd2jey1rwrypd00foyna7))
The third study discusses children, mothers, and fathers. What about single adult men (who behave differently from married men)?
Quote from: Anon1787 on September 17, 2022, 07:12:58 PM
Quote from: dismalist on September 16, 2022, 06:00:43 PM
That's challenging the label and the generosity, not the analysis of incentives.
The generosity we all have different views about, as I said.
It's better to think of this as a negative income tax. Recipients start paying taxes on the first dollar earned, just not at the absurd rate of 100%. That preserves the incentive to work.
As this is meant to be a substitute for existing welfare programs, there is no automatism to spend a dollar more on transfers than is spent now.
Of course, the political appeal of the word "universal" may well be that we think everybody gets $5K per month and keeps all of it when he starts working! Forgedddabouddit!
What if men averse to working end up with more income under a UBI than under current welfare rules? They won't care about the lower marginal tax rate on work and will just buy more (or more comfortable) leisure.
What if men averse to working received the
same income under a UBI as under present system. Work an hour more. With UBI you keep something of your extra earnings. Presently, you keep nothing. It doesn't pay to work if an extra earned dollar is taken away from you.
Now, suppose one gave the poor more money -- under the condition that an extra dollar they earned would not be completely taken away. They would still work more.
The incentive is at the margin received, not the average.
Quote from: dismalist on September 17, 2022, 07:14:06 PM
Quote from: onthefringe on September 17, 2022, 06:55:16 PM
I encourage everyone to look at the effects when the Eastern Band of Cherokees started paying out casino profits to enrolled tribe members who happened to also be part of the ongoing Great Smoky Mountains Study of Youth. (hint — huge decreases in childhood emotional, behavioral, and psychiatric issues, with no impact on labor participation publications here (https://jamanetwork.com/journals/jama/fullarticle/197482) and here (https://pubmed.ncbi.nlm.nih.gov/20483972/) and here (https://ucla.app.box.com/s/ejz4xstgif1jd2jey1rwrypd00foyna7))
Lovely, fringe, I like! If these researchers want to show that having more income is a good thing, that's fine. However, I never had any doubt that having higher income is a good thing. What is interesting here is in the third link, which mentions the conditions under which the extra income was distributed:
A portion of the profits from this new business operation is distributed every six months on an equalized, per capita basis to all adult tribal members regardless of employment status, income, or other household characteristics.
No conditions! If one works more, the cash is not taken away:
Therefore, it appears that households affected by cash transfers are not reducing their labor force participation.
Wonderful.
While I realize the outcome that more income is better is in some ways a trivial finding, what impresses me is that a comparatively small amount made this big a difference. Over the course of the study the annual payout ranged from $4000 to $6000 per tribal member, and payments to minors are held in trust and can't be used by their household until they are 18. These aren't amounts big enough to stop working, or even to buy that much more leisure. It's enough money that the transmission going out on your car might not lead to a choice between transportation and heat, or enough that you might be able to turn down one overtime shift to see your kid play soccer sometimes.
1. Does anyone know how the effects of the Alaska oil payouts compare to the Cherokee payouts?
2. Would access to health/dental care substantially affect child poverty?
3. If businesses such as Walmart paid a "living wage" (whatever that is) would it decrease the number of children in poverty?
I am not an economist, so I may not even be asking reasonable questions.
Quote from: nebo113 on September 18, 2022, 07:13:20 AM
1. Does anyone know how the effects of the Alaska oil payouts compare to the Cherokee payouts?
2. Would access to health/dental care substantially affect child poverty?
3. If businesses such as Walmart paid a "living wage" (whatever that is) would it decrease the number of children in poverty?
I am not an economist, so I may not even be asking reasonable questions.
My understanding is that the Alaska permanent fund payouts are even smaller, but do seem to have an effect on some social issues without apparently affecting labor force participation (http://humcap.uchicago.edu/RePEc/hka/wpaper/Jones_Marinescu_2019_labor-market-impacts-universal-transfers.pdf). The Cherokee tribe payouts make a really nice natural experiment because they suddenly changed the status of people who were enrolled in an ongoing study, but to the best of my limited understanding nothing from studies of the Alaska fund is in conflict with the studies of the Cherokee payments.
I'm also not an economist and don't know of actual studies addressing your points 2 and 3, though I assume there must be some (and my gut feeling is that the answer to both would be "yes", though I know economic results can be quite counterintuitive).
Quote from: onthefringe on September 18, 2022, 06:01:03 AM
Quote from: dismalist on September 17, 2022, 07:14:06 PM
Quote from: onthefringe on September 17, 2022, 06:55:16 PM
I encourage everyone to look at the effects when the Eastern Band of Cherokees started paying out casino profits to enrolled tribe members who happened to also be part of the ongoing Great Smoky Mountains Study of Youth. (hint — huge decreases in childhood emotional, behavioral, and psychiatric issues, with no impact on labor participation publications here (https://jamanetwork.com/journals/jama/fullarticle/197482) and here (https://pubmed.ncbi.nlm.nih.gov/20483972/) and here (https://ucla.app.box.com/s/ejz4xstgif1jd2jey1rwrypd00foyna7))
Lovely, fringe, I like! If these researchers want to show that having more income is a good thing, that's fine. However, I never had any doubt that having higher income is a good thing. What is interesting here is in the third link, which mentions the conditions under which the extra income was distributed:
A portion of the profits from this new business operation is distributed every six months on an equalized, per capita basis to all adult tribal members regardless of employment status, income, or other household characteristics.
No conditions! If one works more, the cash is not taken away:
Therefore, it appears that households affected by cash transfers are not reducing their labor force participation.
Wonderful.
While I realize the outcome that more income is better is in some ways a trivial finding, what impresses me is that a comparatively small amount made this big a difference. Over the course of the study the annual payout ranged from $4000 to $6000 per tribal member, and payments to minors are held in trust and can't be used by their household until they are 18. These aren't amounts big enough to stop working, or even to buy that much more leisure. It's enough money that the transmission going out on your car might not lead to a choice between transportation and heat, or enough that you might be able to turn down one overtime shift to see your kid play soccer sometimes.
Often, the trick to understanding poverty seems to be to think of poor people as people like everyone else, who just don't have much money. When I was in grad school, I received a smallish inheritance. It was somewhere in the vicinity of 50k, I think. A decent bit, but not enough to change the way I thought about my long term prospects or my career or anything like that.
That money made my life much easier, however, through grad school. I kept it in a separate place, and basically just used it to fill the gaps between the not particularly extravagant lifestyle I lived, and the really crummy stipend I received. It wasn't like I was going on expensive vacations, or living in palatial splendor. I just could live in a decent apartment, I didn't need to have a roommate, and I didn't have to worry about every penny, all of which made my life a lot less stressful and more pleasant. It also meant I never had to take out loans and I didn't have any credit card debt. As a result, once I was out of grad school, my wife and I could fully contribute to the retirement fund even though we weren't making much money, which has probably helped us at a better spot long term than we otherwise would be.
That was all true even though my use of the money was sort of medium in terms of responsibility. I didn't blow it all on cocaine and ponies, but I did use it so I could hang out at the bar more. So of course, that relatively small amount of money would make even more difference for people who are actually close to poverty-and their use of it doesn't have to optimal for it to have huge benefits.
Perhaps an unfortunate coda:https://www.politico.com/news/magazine/2022/09/28/poor-kids-just-dont-matter-in-american-politics-00059018
Do you agree with Greenfield's analysis as to the reasons why the Democrats are not campaigning on the issue of restoring these programs that explicitly aid poor kids this year, and, if so, what could be done about changing their minds on these issues?