> Homeless people, new mothers and low-income Americans all over the country received thousands of dollars. And it's practically invisible in the data. On so many important metrics, these people are statistically indistinguishable from those who did not receive this aid.
> I cannot stress how shocking I find this and I want to be clear that this is not “we got some weak counterevidence.”
I don't think this is surprising when considering personal experience with people, at least not for me.
I know people with various degrees of success in their lives. For instance, you meet someone who is chronically broke. At first, you empathize and see them as more or less a victim of misfortune. Unseen car repair bills, job losses, etc. But if its someone you follow over years and get to know, you begin to realize a lot of their problems are self inflicted. For instance, they may get a new job with a big pay raise. But they just adjust their spending up. Some windfall that could turn things around becomes a vacation. And so on.
The same is true with other personal problems. Like the perpetually single person, who upon further examination, doesn't do anything to help their chances. Or the overweight person with a thyroid problem, that really just over indulges.
Helping people we're close to and love is hard enough. I can't imagine just solving some strangers problems by writing them a check
The problem is that cash windfalls don't build wealth. You need consistent income to do much of anything in this world that matters that can be traced, tracked, expressed in credit reports and used to back loans for serious purchases like cars and homes.
If you simply gave young people $100k - which is a number nobody is seriously throwing around - what do you think they would materially gain from it? Very little. Their ability to purchase a home is still income-based and far more than a $100k windfall in many parts of the US can sustain for much time at all and everything else is just a slow bleed.
> what do you think [young people] would materially gain from [$100k]? Very little.
Little? It would remove most of the obstacles in their life: Move away from shitty parents or neighborhoods. Allow Finish their studies without having to hold a job at the same time. Allow a decent job search. Rent near work. Become the foundation for long term investing. Have a decent minimal-breakdowns car if useful where they live/work. Have a safety reserve in case shit happens. After a little time building a credit record, become the down payment for their home (if that's worthwhile on their trajectory), etc, etc.
I would argue though that $100k may not by itself achieve much if - in general - lack of good example, lack of good counsel, presence of terrible "friends", mental illness, etc.
In spite of some views on HN, "normal job" is still the way to a comfortable life for most.
> ...what do you think they would materially gain from it?
$100K at age 20 can become $1.6M by age 60, per the rule of 72, if invested in a diversified stock index with 7% total return. At age 60, the 4% safe-withdrawal rule says that $1.6M might provide $64K/year indefinitely.
So, they could gain a hell of a lot from $100K when young. The trick is saving/investing/time.
Personal anecdote: when I was 10 or so, a relative passed away and all children in the family inherited around 20k each. It was put into a fund. I think I got full authority over my share at 16 or so. It always felt like I was rich — that was a lot of money for a child to “own“. I have never touched it to this day, only ever adding savings to it, but it gave me a lot of peace of mind to know that I could, if I ever needed to. So, ultimately, it wouldn’t have mattered if I ever had it, or it was just a made up number on some paper; I am certain it fundamentally influenced my life in very positive ways.
Another trait about money that I inherited is all generations in my family since and including my grandparents never had any debt. Being in debt even just for a short period would totally stress me out. I only ever buy what I can afford to without credit.
Think of it another way, I hear that big cash expenses can destroy wealth. For instance, if you have no cash reserves, that means you may rely on pay day lenders. You can't afford a Costco membership. You don't have a car so you're limited on where you can work and shop. You cannot afford some vocational training or some time off to train. There are a lot of things that can save or make you money long term.
Also 100k invested in the market will yield you probably around 7k, which is a lot, especially you don't touch it and let it compound.
I think the idea behind these types of programs is not to solve all problems or realize all goals of its beneficiaries, but rather to provide some cushion against small financial upsets that would otherwise derail a person living on the edge of insolvency.
> For instance, you meet someone who is chronically broke. At first, you empathize and see them as more or less a victim of misfortune. Unseen car repair bills, job losses, etc. But if it's someone you follow over years and get to know, you begin to realize a lot of their problems are self inflicted. For instance, they may get a new job with a big pay raise. But they just adjust their spending up. Some windfall that could turn things around becomes a vacation. And so on.
AND, they are enabled and pushed into this mentality by other, also-not-very-financially-savvy people in their lives. When that once in a lifetime $1,000 windfall comes in, everyone around them tells them "Come on, blow it on a vacation! You shouldn't deny yourself a little luxury if it makes you feel good! You can't just eat ramen every day, here's your chance to live a little!" and suddenly they're back where they started, pre-windfall.
Yours exactly mirrors my own experiences with people who have chronic problems in life. It has been dispiriting in some ways, but freeing in others. The feeling of “if I could just do <x> for them” gives way to an acceptance about the limits of our power to influence others and an accompanying lightening of emotional burden.
It's really hard accepting this, which is why I believe younger people are more naive. It's easier to believe everyone is a victim, but with enough life experience and experience a larger variety of people, you learn that not everyone is just like you. There are huge discrepancies in competence, seriousness, work ethic and a million other things.
Victims absolutely exist, but the best working assumption is that someone has the results they have due to personal decisions. And this equally applies to yourself. If you feel something is wrong or missing in your life, it's best to assume its based on decisions that you made.
I’m older and the problem I’ve had is that if you stop giving regularly, you probably will continue not to give. So, articles like this with the best intent just lead to people giving less and not volunteering or providing any other help. If you think giving money doesn’t help, then try a massive reduction in giving and see how that helps. Programs get cut, people get desperate and more mentally unbalanced, start doing drugs, start selling drugs, and they start killing people.
What you say is 100% true for some. I saw a poor family run a fundraiser for themselves; they spent $300 on a donation party that brought in < $50 (and was unadvertised except amongst friends). Truly dumb implementation, by not-dumb people.
It is 100% not true for others. My neighbors know every damn trick in the book for welfare; it's a part of their budget. More money removes serious obstacles in their days.
The centerpiece of the author's thesis, which is that "the media" exaggerates the impact of cash payments to the poor, is undercut by an egregiously sloppy reading of the results of the Denver Basic Income study: she criticizes the project's claim that there was significant improvement in housing for people receiving $1000/mo vs the control group receiving $50/mo, citing results that show 43% of the controls were in housing by the end of the study while 44% of the test group were. What she fails to mention is that 12% of the controls were already housed at the beginning of the study, vs only 6% of the test group.
She also fails to mention that the Baby's First Year study was unfortunately overlapped by the Covid epidemic, introducing an enormous confounding factor (made all the more significant since the study measured child welfare), not to mention the Covid payments that likely dwarfed the $333/mo study payments and would have been received by both control and test subjects.
I am ashamed to complain she's the worst writer I've had the privilege of shaking my head at in my 37 years. There's this rushed, Eye of Sauron saccades, extremely-online, consistent undercurrent, stapled to a Stanford Rationalist™ who has never had to struggle to make a stronger argument - which opened my eyes to how much "Rationalism" is "performing thought in a particular style in a particular social group"
This is a brand new publication and I really wish they skipped her, made the whole endeavour seem unserious and extremely online to me (which it is! but I wouldn't have noticed. so I guess I'm grateful?)
It also made me appreciate how little editorial there is left, so many publications, especially online, are stripped down to the point its freelance bloggers that kinda stay the same no matter what, rather than people growing as writers.
My two most scarring facepalms in recent memory:
- [my home] Oakland is safe, the Feds coming in isn't needed, But..............the real problem of them being here would be Duh Dems complaining, people know crime is real and bad and hate being lied to.
- It'd be bad if we deported people for their views but then again we don't know what we don't know about the level of terrorist support provided by these people who complain about Gaza.
The main study mention found 3 years of 1k a month had no impact on health, stress, sleep, jobs, income, education, child's education, or time spent with children compared to the control. Other studies have also shown tiny benefits a their headline findings.
I think its clear UBI is not the savior people wish it was, sadly.
Contrary to the author's assertion, the Denver Basic Income study, which gave $1000/mo, found a significant improvement in housing for the test group vs the controls. She misread the results, failing to note the initial housing rates for control vs test.
I read your other comment with the numbers and I don't think it makes the amazing difference you seem to. Certainly not to the degree i think it makes it all worth it. Maybe if they at least plateau in different places, but they don't. I think you seem fairly defensive (you've posted the same response repeatedly) about what still seem like middling results.
As a basic example: While your point about the starting percentages is correct, the study lost partipicants over time.
Group A (the 1k/month group) lost 33% of its participants by T3, and Group C (the 50/month comparison group) lost 38% of its participants.
The table you quote from the final study doesn't include the people who were lost, only those who filled out both surveys, T1 and T3. So using it to say they helped a greater percent of people is a bit weird.
They also don't tell you the table for T2 in the final report, you have to go look at the interim one.
The T2 data makes T1->T3 look much less impressive, and definitely doesn't seem to support some amazing gain for group 1.
As far as i can tell, the data looks even less impressive for your claim if you do t1->t2, and T2->t3, instead of just t1->t3 with only both included.
It would certainly be easier to tease apart the point you try to make if they reported the number of originally unhoused vs originally housed that were retained at each timepoint, but they don't.
So what am i missing? Why should I look at these results and think it is amazing?
(Also, I don't think i'd agree the main argument the author makes is based and refuted solely by the results of the denver study)
Results for Group A (1000$/m) closely resemble results for control Group C(50$/m). Metrics like % of Unsheltered participants, change in full-time employment, % of participans in a house they rent or own... have a diference of 1 or 2 points.
Thats the point of the author, those are minimal variances, and insuficient to claim inpact due to basic income.
Personal opinion. The study itself exert a nontrivial influence on participants.
The act of being engaged, regular check-ins... affect positively. Their lives improve independent of the financial component because they are part of the study, not because of the amount of money in the procedure.
The main point of UBI isn't “more money solves problems”, it is “replacing means testing of benefits with unconditional benefits removes adverse effects of the rapid clawback of benefits with increasing-but-still-low income”.
Giving individuals money without changing the policy context doesn't actually test the mechanism of action proposed for UBI. (It does, arguably, test the mechanism of action of some proposed private charity [or business-linked] alternatives which do involve cash transfers and don't involve changing the public policy context and incentives, but that's a whole different issue.)
One of them is that means tested benefits are harmful, and I think it's a really strong one.
But another very common defense of UBI is that mass unemployment is inevitable, but because of technological developments that cause wide abundance, so UBI can be used to make that abundance available to the newly unemployed.
The harms of means testing are many. They include:
- Massive organizational overhead to do the means testing, have appeals process, have fraud detection, and fraud punishment.
- Personal overhead on those who have to 'pass' the means-testing. This can be non-trivial procedurally, and appeals tend to be very complicated. Moreover, the consequences of making a mistake that gets marked as fraudulent are severe.
This makes it quite time- and stress-costly to get these benefits, and makes some people skip them.
- It creates weird economic incentives, if done exceptionally poorly, it creates situations where an increase in net income causes a decrease in gross income. In other situations you get an effective marginal tax rate of nearly 100%, which discourages work and prevents the building of wealth by advancing a career.
To be fair many people who were still employed and making decent money for their area received stimulus checks. At that point why not treat it as fun money? After all, you’re trying to stimulate the economy. That includes luxury stores.
Others were making more on unemployment than they did while employed. They got checks on a regular basis that meaningfully increased their income level. I’m not surprised or offended if they try to temporarily increase their standard of living in frivolous ways.
The framing here is a bit off. As far as I can see, they don’t link to anyone actually saying something like “poverty is cured by direct cash transfers.” I don’t know who believes that. I browsed through the Denver study and while some metrics didn’t significantly improve, many of them did. I think the author overplays their hand somewhat.
Some NGOs that help unhoused people did shift to direct cash transfers because 1) they still help improve material conditions (even the author agrees with this), and 2) it’s politically easier than trying to convince locals to actually build affordable housing.
Of course a holistic approach is probably going to improve conditions better, but no one with actual political power is interested in doing that.
Contra, "The First $10,000 [of Net Worth] is the Most Important":
> What’s the smallest amount of money that you would consider “life-changing”? Some might say $100,000. Others over $1 million. If you had asked me this question a few years ago, I would have told you something similar.
> But today, I’m convinced that the most life-changing amount of money is $10,000—in particular, the first $10,000.
[…]
> Why? Because getting out of Level 1 fundamentally changes how you experience life. You go from focusing on your next paycheck and dreading your next bill to enjoying your time without worry. Getting out of Level 1 frees your mind so that you can focus on other things. That first $10,000 can bring: Stability […]; Confidence […]; Momentum […]; Mental freedom.
A few hundred to $1K seems too little to have much impact.
Going from 0-$1k/mo or $1K to $2k/mo means you're still broke.
You can definitely afford some food or necessities that were harder before, but fundamentally, you still need to hustle to change the fundamental financial situation.
I would still have expected that going from 0-1K to 1-2K would allow a lot more people to bootstrap themselves out of poverty. At least under the hypothesis that Poverty is a symptom of a persons circumstances, with most notably a lack of a financial buffer allowing for smart moves (e.g. the Sam Vimes theory of boots, or not being able to get a job because you cannot afford transportation).
In that case, that extra money should likely cause quite a few people to get out of those self-reinforcing poverty traps, and let them escape.
I believe this was previously flagged and has now been unflagged by the mods.
I wonder why they chose to unflag this and not, for instance, “Brennan Center for Justice Report: The Campaign to Undermine the Next Election,” which is far better journalism and had a lot more discussion: https://news.ycombinator.com/item?id=44816165
They say they don’t make moderation decisions for political reasons, but I am finding it harder and harder to see.
Readit News
> I cannot stress how shocking I find this and I want to be clear that this is not “we got some weak counterevidence.”
I don't think this is surprising when considering personal experience with people, at least not for me.
I know people with various degrees of success in their lives. For instance, you meet someone who is chronically broke. At first, you empathize and see them as more or less a victim of misfortune. Unseen car repair bills, job losses, etc. But if its someone you follow over years and get to know, you begin to realize a lot of their problems are self inflicted. For instance, they may get a new job with a big pay raise. But they just adjust their spending up. Some windfall that could turn things around becomes a vacation. And so on.
The same is true with other personal problems. Like the perpetually single person, who upon further examination, doesn't do anything to help their chances. Or the overweight person with a thyroid problem, that really just over indulges.
Helping people we're close to and love is hard enough. I can't imagine just solving some strangers problems by writing them a check
If you simply gave young people $100k - which is a number nobody is seriously throwing around - what do you think they would materially gain from it? Very little. Their ability to purchase a home is still income-based and far more than a $100k windfall in many parts of the US can sustain for much time at all and everything else is just a slow bleed.
Little? It would remove most of the obstacles in their life: Move away from shitty parents or neighborhoods. Allow Finish their studies without having to hold a job at the same time. Allow a decent job search. Rent near work. Become the foundation for long term investing. Have a decent minimal-breakdowns car if useful where they live/work. Have a safety reserve in case shit happens. After a little time building a credit record, become the down payment for their home (if that's worthwhile on their trajectory), etc, etc.
I would argue though that $100k may not by itself achieve much if - in general - lack of good example, lack of good counsel, presence of terrible "friends", mental illness, etc.
In spite of some views on HN, "normal job" is still the way to a comfortable life for most.
$100K at age 20 can become $1.6M by age 60, per the rule of 72, if invested in a diversified stock index with 7% total return. At age 60, the 4% safe-withdrawal rule says that $1.6M might provide $64K/year indefinitely.
So, they could gain a hell of a lot from $100K when young. The trick is saving/investing/time.
Another trait about money that I inherited is all generations in my family since and including my grandparents never had any debt. Being in debt even just for a short period would totally stress me out. I only ever buy what I can afford to without credit.
Think of it another way, I hear that big cash expenses can destroy wealth. For instance, if you have no cash reserves, that means you may rely on pay day lenders. You can't afford a Costco membership. You don't have a car so you're limited on where you can work and shop. You cannot afford some vocational training or some time off to train. There are a lot of things that can save or make you money long term.
Also 100k invested in the market will yield you probably around 7k, which is a lot, especially you don't touch it and let it compound.
AND, they are enabled and pushed into this mentality by other, also-not-very-financially-savvy people in their lives. When that once in a lifetime $1,000 windfall comes in, everyone around them tells them "Come on, blow it on a vacation! You shouldn't deny yourself a little luxury if it makes you feel good! You can't just eat ramen every day, here's your chance to live a little!" and suddenly they're back where they started, pre-windfall.
Victims absolutely exist, but the best working assumption is that someone has the results they have due to personal decisions. And this equally applies to yourself. If you feel something is wrong or missing in your life, it's best to assume its based on decisions that you made.
Awesome.
It is 100% not true for others. My neighbors know every damn trick in the book for welfare; it's a part of their budget. More money removes serious obstacles in their days.
Correct me if wrong.
She also fails to mention that the Baby's First Year study was unfortunately overlapped by the Covid epidemic, introducing an enormous confounding factor (made all the more significant since the study measured child welfare), not to mention the Covid payments that likely dwarfed the $333/mo study payments and would have been received by both control and test subjects.
https://www.denverbasicincomeproject.org/research
https://newrepublic.com/article/199070/government-cash-payme...
This is a brand new publication and I really wish they skipped her, made the whole endeavour seem unserious and extremely online to me (which it is! but I wouldn't have noticed. so I guess I'm grateful?)
It also made me appreciate how little editorial there is left, so many publications, especially online, are stripped down to the point its freelance bloggers that kinda stay the same no matter what, rather than people growing as writers.
My two most scarring facepalms in recent memory:
- [my home] Oakland is safe, the Feds coming in isn't needed, But..............the real problem of them being here would be Duh Dems complaining, people know crime is real and bad and hate being lied to.
- It'd be bad if we deported people for their views but then again we don't know what we don't know about the level of terrorist support provided by these people who complain about Gaza.
I think its clear UBI is not the savior people wish it was, sadly.
https://www.denverbasicincomeproject.org/research
As a basic example: While your point about the starting percentages is correct, the study lost partipicants over time. Group A (the 1k/month group) lost 33% of its participants by T3, and Group C (the 50/month comparison group) lost 38% of its participants.
The table you quote from the final study doesn't include the people who were lost, only those who filled out both surveys, T1 and T3. So using it to say they helped a greater percent of people is a bit weird.
They also don't tell you the table for T2 in the final report, you have to go look at the interim one.
The T2 data makes T1->T3 look much less impressive, and definitely doesn't seem to support some amazing gain for group 1.
As far as i can tell, the data looks even less impressive for your claim if you do t1->t2, and T2->t3, instead of just t1->t3 with only both included.
It would certainly be easier to tease apart the point you try to make if they reported the number of originally unhoused vs originally housed that were retained at each timepoint, but they don't.
So what am i missing? Why should I look at these results and think it is amazing?
(Also, I don't think i'd agree the main argument the author makes is based and refuted solely by the results of the denver study)
Thats the point of the author, those are minimal variances, and insuficient to claim inpact due to basic income.
Personal opinion. The study itself exert a nontrivial influence on participants. The act of being engaged, regular check-ins... affect positively. Their lives improve independent of the financial component because they are part of the study, not because of the amount of money in the procedure.
Giving individuals money without changing the policy context doesn't actually test the mechanism of action proposed for UBI. (It does, arguably, test the mechanism of action of some proposed private charity [or business-linked] alternatives which do involve cash transfers and don't involve changing the public policy context and incentives, but that's a whole different issue.)
One of them is that means tested benefits are harmful, and I think it's a really strong one.
But another very common defense of UBI is that mass unemployment is inevitable, but because of technological developments that cause wide abundance, so UBI can be used to make that abundance available to the newly unemployed.
The harms of means testing are many. They include:
- Massive organizational overhead to do the means testing, have appeals process, have fraud detection, and fraud punishment. - Personal overhead on those who have to 'pass' the means-testing. This can be non-trivial procedurally, and appeals tend to be very complicated. Moreover, the consequences of making a mistake that gets marked as fraudulent are severe. This makes it quite time- and stress-costly to get these benefits, and makes some people skip them. - It creates weird economic incentives, if done exceptionally poorly, it creates situations where an increase in net income causes a decrease in gross income. In other situations you get an effective marginal tax rate of nearly 100%, which discourages work and prevents the building of wealth by advancing a career.
Others were making more on unemployment than they did while employed. They got checks on a regular basis that meaningfully increased their income level. I’m not surprised or offended if they try to temporarily increase their standard of living in frivolous ways.
But your one unsubstantiated story doesn’t constitute data that can be used to compare to anything.
Deleted Comment
Some NGOs that help unhoused people did shift to direct cash transfers because 1) they still help improve material conditions (even the author agrees with this), and 2) it’s politically easier than trying to convince locals to actually build affordable housing.
Of course a holistic approach is probably going to improve conditions better, but no one with actual political power is interested in doing that.
> What’s the smallest amount of money that you would consider “life-changing”? Some might say $100,000. Others over $1 million. If you had asked me this question a few years ago, I would have told you something similar.
> But today, I’m convinced that the most life-changing amount of money is $10,000—in particular, the first $10,000.
[…]
> Why? Because getting out of Level 1 fundamentally changes how you experience life. You go from focusing on your next paycheck and dreading your next bill to enjoying your time without worry. Getting out of Level 1 frees your mind so that you can focus on other things. That first $10,000 can bring: Stability […]; Confidence […]; Momentum […]; Mental freedom.
* https://ofdollarsanddata.com/the-first-10000-is-the-most-imp...
* https://news.ycombinator.com/item?id=44931836
* https://ofdollarsanddata.com/the-wealth-ladder/
The research he cites finds that happiness starts levelling out at Levels 3-4 of his framework. Some of his posts on the subject:
* https://ofdollarsanddata.com/?s=happiness
Going from 0-$1k/mo or $1K to $2k/mo means you're still broke.
You can definitely afford some food or necessities that were harder before, but fundamentally, you still need to hustle to change the fundamental financial situation.
In that case, that extra money should likely cause quite a few people to get out of those self-reinforcing poverty traps, and let them escape.
I wonder why they chose to unflag this and not, for instance, “Brennan Center for Justice Report: The Campaign to Undermine the Next Election,” which is far better journalism and had a lot more discussion: https://news.ycombinator.com/item?id=44816165
They say they don’t make moderation decisions for political reasons, but I am finding it harder and harder to see.