6 ms·

The main political realization I had with growing up lower class, still live in poorer areas, and making it to being high income is that basing government progr

The main political realization I had with growing up lower class, still live in poorer areas, and making it to being high income is that basing government programs around income is terrible policy. 1. It's extremely unfair 2. It punishes those working to get ahead 3. It creates 'welfare cliffs' where people become worse off for getting jobs. Losing Medicaid is the best example of this. 4. It makes the program exponentially more expensive to maintain because you have to hire people to track who gets it and who doesn't, look for fraud, monitor for when the income threshold needs changed, etc.. It's just terrible policy all around. We learned this during covid. It's so much easier to write people a check and tax the the high earners more to make up for them getting a check.

wakawaka28 2y ago
I don't remember all that well but I think there aren't really sharp welfare cliffs with financial aid. The expected contribution of you and your family is subtracted from the total cost, and you are eligible for aid to pay the rest. The money you get from working is supposed to be more than your financial aid deduction anyway. So say if you made an extra $10k, it ought to reduce your financial aid by less than that. >It makes the program exponentially more expensive to maintain because you have to hire people to track who gets it and who doesn't, look for fraud, monitor for when the income threshold needs changed, etc.. We already have a system for that. It's called the IRS. The cost of a basic fraud detection system is less than the actual fraud would be of course. They have to worry about things like people enrolling and never going to class. >It's just terrible policy all around. We learned this during covid. It's so much easier to write people a check and tax the the high earners more to make up for them getting a check. It isn't easier or fairer to write everyone a check, because quite a lot of people don't need any help. The average wagie is not going to seriously be disincentivized from working a meaningful way because it might disqualify their kid from certain financial aid. The whole point of financial aid is to give hope to the hopeless and help the struggling, not give everyone benefits whether they need it or not. Taxing people who don't have kids to pay for people who can afford to pay their kids' tuition seems wrong all around.
- maxrecursion 2y ago
  Healthcare is the easiest example. A birth of a child could easily cost 10k with health insurance, and that is only if there aren't complications, it's free with medicare. 10K is a pretty massive cliff. If you have a large family losing Medicaid is easily thousands of dollars added to your new budget, and that's just counting out of pocket costs towards the massive deductible most healthcare care plans have now. You add the premium costs it is an obscenely a lot more money you are paying for what is free if with medicare
  - wakawaka28 2y ago
    Hot take: If you can't afford insurance you shouldn't be having a dozen kids, or at least shouldn't complain when others don't want to subsidize that. But $10k per kid for an average of 2 kids in a lifetime does not exactly make for a huge cliff. The income limit for Medicaid is so low in most places, getting any kind of job will disqualify you. But the money from the job will be of more utility than some bare minimum free healthcare. There's no way that a few healthy kids costs thousands per month. Maybe insurance could if you had more than 2 kids, but most people don't even need that much insurance. I never had medical insurance in my life until I got my first job out of college. There may be some people who believe they will lose money overall by working, but they're usually wrong. Do taxes and losses of freebies reduce the marginal benefit of working more? I'd say so. But in most cases it is still a net benefit to work more.
    - maxrecursion 2y ago
      There is no way to say this without sounding rude, but you clearly don't understand how insane healthcare costs are when you have kids. Premiums alone could be close to a 1k a month for a family plan. At best you're paying 500 a month in premiums, and that is guaranteed to have a 5k+10k deductible before anything is covered by insurance. Then you will probably still have a co-insurance. The notion that Medicaid is so crappy is some terrible insurance is propaganda. Free vs paying tens of thousands of dollars, and still be flooded with medical bills, is all you need to know which one is better. I know dozens of people with medicaid and they absolutely refuse to lose it, especially the ones with large families. If you, or someone in your family, have chronic health issues then you are basically guaranteed to be paying 10k in healthcare premiums and deductibles when you lose Medicaid and get private insurance.
lupire 2y ago
What we learned from COVID is that it's absolutely disastrous to send everyone a check, because most of that money gets stolen. Better to give away resources that are valuable to consume but expensive to transact in. And what we learned from taxing high earners is that the highest earners hide their money and don't pay the expected taxes.
- diego_sandoval 2y ago
  > because most of that money gets stolen. Huh? I'm out of the loop on this.
  - hypothesis 2y ago
    Not OP, but here is some data: “We estimate that SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors.” https://www.sba.gov/document/report-23-09-covid-19-pandemic-eidl-ppp-loan-fraud-landscape https://www.sba.gov/document/report-23-09-covid-19-pandemic-... IRS also covered some: https://www.irs.gov/newsroom/irs-criminal-investigation-releases-updated-covid-fraud-statistics-on-4th-anniversary-of-cares-act-nearly-9-billion-investigated https://www.irs.gov/newsroom/irs-criminal-investigation-rele...
    - chii 2y ago
      a program administered with poor oversight (may be due to time constraints or whatever reason) doesn't make that program a poor policy decision. I think means tested welfare can backfire a lot in ways that locks people into dependency on the welfare and not look for a higher paying job.
- maxrecursion 2y ago
  The money that was stolen wasn't sent to everyone. You can't steal money sent to everyone. It was the PPP 'Paycheck Protection Program' money that was stolen where tons of small businesses filed to get that money when it wasn't needed. That's not the same thing at all as putting money in the same bank accounts that file tax returns, which is the example I was providing.

wakawaka28 2y ago

I don't remember all that well but I think there aren't really sharp welfare cliffs with financial aid. The expected contribution of you and your family is subtracted from the total cost, and you are eligible for aid to pay the rest. The money you get from working is supposed to be more than your financial aid deduction anyway. So say if you made an extra $10k, it ought to reduce your financial aid by less than that. >It makes the program exponentially more expensive to maintain because you have to hire people to track who gets it and who doesn't, look for fraud, monitor for when the income threshold needs changed, etc.. We already have a system for that. It's called the IRS. The cost of a basic fraud detection system is less than the actual fraud would be of course. They have to worry about things like people enrolling and never going to class. >It's just terrible policy all around. We learned this during covid. It's so much easier to write people a check and tax the the high earners more to make up for them getting a check. It isn't easier or fairer to write everyone a check, because quite a lot of people don't need any help. The average wagie is not going to seriously be disincentivized from working a meaningful way because it might disqualify their kid from certain financial aid. The whole point of financial aid is to give hope to the hopeless and help the struggling, not give everyone benefits whether they need it or not. Taxing people who don't have kids to pay for people who can afford to pay their kids' tuition seems wrong all around.

maxrecursion 2y ago
Healthcare is the easiest example. A birth of a child could easily cost 10k with health insurance, and that is only if there aren't complications, it's free with medicare. 10K is a pretty massive cliff. If you have a large family losing Medicaid is easily thousands of dollars added to your new budget, and that's just counting out of pocket costs towards the massive deductible most healthcare care plans have now. You add the premium costs it is an obscenely a lot more money you are paying for what is free if with medicare
- wakawaka28 2y ago
  Hot take: If you can't afford insurance you shouldn't be having a dozen kids, or at least shouldn't complain when others don't want to subsidize that. But $10k per kid for an average of 2 kids in a lifetime does not exactly make for a huge cliff. The income limit for Medicaid is so low in most places, getting any kind of job will disqualify you. But the money from the job will be of more utility than some bare minimum free healthcare. There's no way that a few healthy kids costs thousands per month. Maybe insurance could if you had more than 2 kids, but most people don't even need that much insurance. I never had medical insurance in my life until I got my first job out of college. There may be some people who believe they will lose money overall by working, but they're usually wrong. Do taxes and losses of freebies reduce the marginal benefit of working more? I'd say so. But in most cases it is still a net benefit to work more.
  - maxrecursion 2y ago
    There is no way to say this without sounding rude, but you clearly don't understand how insane healthcare costs are when you have kids. Premiums alone could be close to a 1k a month for a family plan. At best you're paying 500 a month in premiums, and that is guaranteed to have a 5k+10k deductible before anything is covered by insurance. Then you will probably still have a co-insurance. The notion that Medicaid is so crappy is some terrible insurance is propaganda. Free vs paying tens of thousands of dollars, and still be flooded with medical bills, is all you need to know which one is better. I know dozens of people with medicaid and they absolutely refuse to lose it, especially the ones with large families. If you, or someone in your family, have chronic health issues then you are basically guaranteed to be paying 10k in healthcare premiums and deductibles when you lose Medicaid and get private insurance.

lupire 2y ago

What we learned from COVID is that it's absolutely disastrous to send everyone a check, because most of that money gets stolen. Better to give away resources that are valuable to consume but expensive to transact in. And what we learned from taxing high earners is that the highest earners hide their money and don't pay the expected taxes.

diego_sandoval 2y ago
> because most of that money gets stolen. Huh? I'm out of the loop on this.
- hypothesis 2y ago
  Not OP, but here is some data: “We estimate that SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors.” https://www.sba.gov/document/report-23-09-covid-19-pandemic-eidl-ppp-loan-fraud-landscape https://www.sba.gov/document/report-23-09-covid-19-pandemic-... IRS also covered some: https://www.irs.gov/newsroom/irs-criminal-investigation-releases-updated-covid-fraud-statistics-on-4th-anniversary-of-cares-act-nearly-9-billion-investigated https://www.irs.gov/newsroom/irs-criminal-investigation-rele...
  - chii 2y ago
    a program administered with poor oversight (may be due to time constraints or whatever reason) doesn't make that program a poor policy decision. I think means tested welfare can backfire a lot in ways that locks people into dependency on the welfare and not look for a higher paying job.
maxrecursion 2y ago
The money that was stolen wasn't sent to everyone. You can't steal money sent to everyone. It was the PPP 'Paycheck Protection Program' money that was stolen where tons of small businesses filed to get that money when it wasn't needed. That's not the same thing at all as putting money in the same bank accounts that file tax returns, which is the example I was providing.