[HN Gopher] How do cash transfers impact the people who don't re...
       ___________________________________________________________________
        
       How do cash transfers impact the people who don't receive them?
       (2019)
        
       Author : herbertl
       Score  : 105 points
       Date   : 2022-08-22 06:06 UTC (16 hours ago)
        
 (HTM) web link (www.givedirectly.org)
 (TXT) w3m dump (www.givedirectly.org)
        
       | origin_path wrote:
       | It's probably worth applying some scepticism to this study:
       | 
       | 1. It's an economics paper. Not a field with a reputation for
       | accurate predictions beyond the basics.
       | 
       | 2. It's commissioned by a charity that wanted academic evidence
       | of the benefits of its own policies, so it's as conflicted as can
       | be.
       | 
       | 3. It's research by academics who are as a group notoriously left
       | wing, so they're being asked to do research to support their own
       | ideological preconceptions.
       | 
       | That doesn't mean the conclusions are wrong, but it does mean
       | they shouldn't be accepted at face value, and you'd have to
       | review it very thoroughly - ideally with external double checks
       | of validity - to be able to conclude anything from it.
       | 
       | Doing even a very fast check of the paper immediately reveals a
       | major problem: the headline claim of 0.1% price inflation
       | excludes the price of labour, which inflated significantly. This
       | pretty much explains the entire effect. Not surprisingly, if you
       | start handing out cash at random in poor communities then the
       | people who aren't lucky enough to get it start demanding some of
       | that cash too. But you don't need research to know this. It's
       | economics 101, that's what's happening right now in western
       | economies (big cash transfers from governments -> inflation).
       | 
       | We may suspect the paper is being undermined by ideology and
       | funder bias because its early statements on inflation try hard to
       | hide this fact. At the start, it's saying:
       | 
       |  _" Importantly, we document ... minimal price inflation"_
       | 
       | (abstract). Then it becomes:
       | 
       |  _" For inputs, we find positive point estimates [of inflation],
       | but they are not always statistically significant. For outputs,
       | we document statistically significant, but economically minimal,
       | local price inflation."_
       | 
       | (page 4). Unless read very cynically this sounds like good news.
       | But then we notice how obfuscated this statement is. "Positive
       | [input] point increases but they are not always statistically
       | significant", i.e. some are and the magnitude of the increase
       | isn't mentioned. Later we find:
       | 
       |  _" we do see significant increases in the factors that we
       | directly measure, and particularly in the wage bill: enterprises
       | in treated (control) villages increase spending on labor by USD
       | PPP 82 (70), a sizable change relative to the control mean"_
       | 
       | (page 20). So we've gone straight from "minimal price inflation"
       | to "significant increases ... a sizeable change". I've read so
       | many academic papers in the last few years and whenever you see
       | such large slippage between claims in the abstract and claims
       | buried deep in the paper, it's always a bad sign. It's a leading
       | indicator that there's going to be other kinds of problem,
       | probably involving bogus stats/models/assumptions.
       | 
       | Moving on. We might have hoped that people would use the money
       | for investment that could permanently increase their standards of
       | living after the cash transfers end, but that doesn't happen:
       | 
       |  _" Strikingly, we do not see strong evidence of a firm
       | investment response"_
       | 
       | But this isn't something that needs research to know, it's the
       | story of decades of massive and sustained foreign aid to Africa.
       | Aid money gets spent on increased consumption but not sustainable
       | investment.
        
         | jaclaz wrote:
         | Similar to this, a few weeks ago, centered on the US:
         | 
         | https://news.ycombinator.com/item?id=32043969
         | 
         | https://news.ycombinator.com/item?id=32044076
        
           | skinnymuch wrote:
           | Worth pointing out the summary (2nd link) by the people is
           | arguably pretty bad. They are basing being better off on
           | reactionary feelings and money left in the bank. That makes
           | no sense at all for people with little wealth. It seems like
           | they purposefully picked things to make the study a failure.
           | 
           | Many of the children comments explain this well.
        
         | notahacker wrote:
         | > So we've gone straight from "minimal price inflation" to
         | "significant increases ... a sizeable change".
         | 
         | I'm not sure the fact that a different variable (total wage
         | expenditure) from the one discussed in the abstract (price
         | inflation) recorded a different outcome is a particularly
         | pertinent critique of the paper.
         | 
         | Since the paper also records that the increased wage
         | expenditure allowed wage earners to buy more goods because the
         | price of goods inflated minimally, and the enterprises spending
         | more on wages nevertheless experienced a [non-statistically
         | significant] increase in profit, leaving _all groups materially
         | better off_ , this is GDP growth, not inflation.
         | 
         | A more pertinent observation is that this is pretty much what
         | you'd expect from injecting additional money into a local
         | economy operating well below capacity and buying most of its
         | consumer goods from areas not receiving cash injections, so it
         | doesn't necessarily work at national scale or if the
         | jurisdiction self-funds its poverty alleviation funding.
        
           | origin_path wrote:
           | Although I agree with your conclusions that the study doesn't
           | tell us much, I don't think wages should be excluded from
           | claims about price inflation, especially in non industrial
           | economies heavily reliant on cheap labour. The charity
           | advertises the headline 0.1% rate and the abstract makes no
           | mention of the fact that actually some of the most important
           | prices in that society increased significantly. If they'd
           | admitted to this up front of would have seriously reduced the
           | apparent success of their initiative.
           | 
           | But there is really a deeper problem here. Every time
           | researchers do this they're training people to assume their
           | claims are deceptive in some way. Large groups of people are
           | just tuning out academic claims because of this sort of
           | thing, they don't care. But this is bad for social cohesion
           | because the people who take academic output on faith then
           | conclude that they must be a superior breed of person:
           | "reality based", "understands the science" etc. We already
           | have this problem and it's getting worse. To wit: you can't
           | afford the time to double check every claim presented as
           | important or that will affect social policy that affects you,
           | so you have to generalize, and increasingly that means
           | assuming that if an academic makes a claim convenient for
           | their prevailing ideology, it's probably a trick or
           | misleading in some way. If caught they tend to blame
           | journalists for "misrepresenting" their work, or they'll
           | point to a footnote on page 67 where they redefine a standard
           | term and use it to claim nobody should have ever assumed the
           | obvious interpretation of what they were saying. It's just so
           | tawdry. Then for people who stop listening, it gets used as a
           | weapon to beat them around the head.
           | 
           | So I think academics have a moral obligation to be brutally
           | honest in their claims and abstracts. This sort of word game
           | where they arbitrarily exclude the prices that went up from
           | their definition of price inflation, is ultimately self
           | defeating.
        
             | notahacker wrote:
             | Wage spend literally _isn 't_ price inflation though, and
             | real wage increases (or employment increases) due to
             | increased output aren't even likely to _cause_ price
             | inflation. Local enterprises sell more, so the workers get
             | more money, with which they are able to buy more stuff.
             | That is economic growth, not price inflation.
             | 
             | If you would like to argue that people earning more money
             | is always and everywhere a negative outcome aid agencies
             | should do everything in their power to avoid, that's a
             | _bold_ argument you 're perfectly entitled to make, but it
             | doesn't change the fact that it is not - by itself - price
             | inflation. If the paper has computed price inflation
             | _wrongly_ that 's another matter, but it won't be because
             | they haven't created a new definition of price inflation
             | which includes wages (or profits or units sold or unfilled
             | vacancies or speculator activity or anything else which
             | isn't price inflation, no matter how often it correlates
             | with it or causes it).
             | 
             | Put another way, academics should continue to use
             | definitions correctly, and not add fake caveats to stuff
             | which is _tautological_ to pander to the sensibilities of
             | people who (i) don 't understand the basic definitions (ii)
             | assume that a reasonable starting point is to assume that
             | if their view on what the basic definition should be
             | conflicts with the academic's understanding, it is because
             | the academic is acting in bad faith.
        
               | origin_path wrote:
               | Inflation is a general rise in prices, and what the paper
               | reports is not merely that people who received money paid
               | their employees more (yay!) but also that employers in
               | villages that didn't receive any money _also_ had to pay
               | more in wages. Literally they experienced an inflationary
               | shock in the labor market. The research is very quiet on
               | this part - in the control villages the little businesses
               | suddenly had a big problem. They couldn 't/didn't raise
               | prices because their competitors in the next village over
               | weren't doing so, but they suddenly had to pay more in
               | labor costs.
               | 
               | You can say this isn't a problem but the goal of aid is
               | to try and create sustainable increases in wealth that
               | stick around after the money flow stops. That clearly
               | didn't happen here.
               | 
               | As to definitions, that's exactly the problem in talking
               | about. The academic definition of inflation is useless
               | and misleading. They say prices didn't go up, as if labor
               | is some magical thing that doesn't have a price. And they
               | neglect to mention that a very important category of
               | prices did inflate unless you read most of the paper.
        
             | Majromax wrote:
             | > I don't think wages should be excluded from claims about
             | price inflation, especially in non industrial economies
             | heavily reliant on cheap labour.
             | 
             | As I read your quote above, it sounds to me like "increased
             | spending on labour" refers to an increase in the _quantity_
             | of labour demanded, more than an increase in the hourly
             | wage. That 's consistent with both economic improvement and
             | low inflation.
        
               | origin_path wrote:
               | I think they're taking about increases in individual
               | wages. Businesses didn't expand by my reading of the
               | paper.
        
         | pessimizer wrote:
         | > 1. It's an economics paper. Not a field with a reputation for
         | accurate predictions beyond the basics.
         | 
         | If your first reason for dismissing an economics paper is
         | because you don't like economics, that's a bad start.
         | Especially since the rest of your comment reviewing this
         | economics paper consists of _you doing economics_. You 're
         | preemptively dismissing everything you yourself have to say.
         | 
         | I mean, if economists suck, then surely the economic theories
         | of people who don't think economics is real suck more.
        
           | zmgsabst wrote:
           | I think skepticism towards individual psychology papers is
           | warranted given the replication crisis in their field.
           | 
           | I think the same is true of economics -- and is the sentiment
           | that person was expressing.
        
       | timbre1234 wrote:
       | Trickle down economics?
        
         | Mordisquitos wrote:
         | In fact it's almost exactly the opposite. Rather than the
         | supply-side economics which trickle-down focuses on, this
         | sounds like a clear example of _demand-side_ economics. By
         | improving the income of some consumers in a community, they are
         | able to buy more goods and services that they wouldn 't have
         | otherwise, thus improving the local economy altogether.
        
           | sokoloff wrote:
           | Does it improve that economy by at least as much as the cost
           | of the transfers? It seems like a lot of economic benefits
           | can be created by injections of money from outside the system
           | under study.
        
             | margalabargala wrote:
             | It wouldn't surprise me if that were the case.
             | 
             | Imagine someone who sewed things by hand, given (or even
             | loaned) the money to purchase a sewing machine, making them
             | many times more productive. Now the community can have
             | things sewn faster and more easily with less effort, with
             | tons of downstream effects (more sails, better clothing,
             | stronger soft goods, etc) and it's easy to see how the net
             | improvement to that community can far exceed the price of
             | the machine.
             | 
             | Another way to ask that question is "does there exist tools
             | whose price is less than the total amount of increased
             | economic activity they enable", which when phrased that
             | way, it seems clear that the answer is "yes".
        
             | drc500free wrote:
             | I would think that the more consumers that can "vote with
             | their wallet" on which products are the best, the more
             | quickly the market will identify and reward good products.
             | Identifying and rewarding the best products (i.e. those
             | processes that create the most valuable outputs from the
             | inputs) is one of the primary benefits of market-based
             | economies. The positive feedback loop of reinvesting
             | profits helps them lift above the general noise.
        
             | notahacker wrote:
             | That's the point of the fiscal multiplier figure: according
             | to their estimates it improves the economy by a multiple of
             | 2.6x the cost of the money transferred.
             | 
             | -
             | 
             | Seems like reverse "trickle down" in another respect too:
             | the poorest recipients got better off but the gap between
             | rich and poor still widened, presumably because the poor
             | spent much of their increased budget buying things from the
             | rich.
        
       | r_hoods_ghost wrote:
       | "while there were large economic gains for recipients (targeted
       | as the poorest), gains for non-recipients were so substantial
       | that the gap between the poorest and least-poor within villages
       | widened slightly." Now that is a novel result!
       | 
       | Publicising that might be a way of overcoming the resistance of
       | the large number of people who are mainly interested in their own
       | relative status, and so dislike giving assistance to the poorest
       | members of society. If you can show people that yes this
       | intervention will help the poorest but it will help you more then
       | those concerned mostly with their own relative status might be
       | more likely to back it.
        
         | Broken_Hippo wrote:
         | _If you can show people that yes this intervention will help
         | the poorest but it will help you more then those concerned
         | mostly with their own relative status might be more likely to
         | back it._
         | 
         | Folks have been trying this. When the poorest folks have enough
         | money to spend on things, everyone tends to benefit - it isn't
         | a new theory. But mostly, teaching folks this has failed. It is
         | either that, or you need to settle on "people simply dislike
         | giving others help, even if they reap rewards."
         | 
         | I think part of the issue is that the rewards aren't nearly as
         | visible or shockingly impactful as actually being given money
         | to thrive.
        
           | obastani wrote:
           | One important caveat is that in the study, as far as I can
           | tell, the money is coming from a different country
           | (presumably the USA) than the target country (Kenya), so
           | there is a baseline effect of increasing the net wealth of
           | Kenya. If the money is collected from and distributed to the
           | same community, the results may not necessarily be the same.
           | I think it would be very interesting to see a study along
           | these lines, but I'm not sure how feasible it would be.
        
             | bombcar wrote:
             | Which is key - a system that had money injected into it
             | showed the results expected of increasing the money supply.
             | 
             | The same may not happen on a national scale if you're
             | circulating inside it.
        
           | belorn wrote:
           | It not that simple. The same theory say that government
           | should spend more money during recessions since that send
           | more money into the hands of citizens, thus increasing
           | peoples ability to consume more and drive up the economy.
           | However, by doing so the amount of money in the system
           | increase and thus you get inflation, forcing the government
           | to spend even more money.
           | 
           | This doesn't happen every time as is demonstrated by this
           | study, but history has plenty of example where it has and
           | hasn't worked. The open question is to figure out when it
           | work and why it doesn't work in other situations.
        
             | [deleted]
        
             | Jochim wrote:
             | The cause of the inflation matters in how the response
             | plays out. The inflation we're seeing currently isn't being
             | driven by the general population having too much money but
             | the response by central banks has been to act like it is.
             | 
             | Personally I view the two major factors to be post pandemic
             | shipping costs and the Ukraine. A meaningful response from
             | government could have headed this off but instead we're
             | seeing energy producers hit record profits while large
             | parts of society are going to be unable turn their heating
             | on over the winter and on top of that rising interest rates
             | are going to see every other aspect of their budget become
             | even more expensive as well.
        
               | ceeplusplus wrote:
               | > The inflation we're seeing currently isn't being driven
               | by the general population having too much money
               | 
               | Actually, it partially is. One third of the current
               | inflation is demand driven according to the Fed (i.e.
               | stimulus checks, unemployment payments, above-market
               | wages due to unemployment checks, etc.) [1]. There are
               | also supply shortages but it's hard to disentangle what
               | part of the supply shortages are due to shipping costs
               | vs. having labor shortages due to said unemployment
               | checks.
               | 
               | We're seeing a lot of the price pressures calm down now
               | as coincidentally, the labor force grows back to pre-
               | pandemic size. [2]
               | 
               | > A meaningful response from government could have headed
               | this off
               | 
               | Like what, putting a price cap on oil? That doesn't work
               | and you and I both know it.
               | 
               | [1] https://www.reuters.com/markets/us/demand-issues-
               | account-one...
               | 
               | [2] https://www.wsj.com/articles/your-steak-is-getting-
               | cheaper-a...
        
               | belorn wrote:
               | There are multiple studies and theories being put out on
               | why inflation occur, both now and in the past. I don't
               | really see a major consensus on a single explanation.
               | 
               | The two major one that seems to make most sense to me is
               | "net importing vs net exporter", and the other is the
               | theory about low supply. For the first one, if a country
               | is importing more than exporting, then the imports is
               | being paid over time by the exports. Increasing the
               | amount of money in such country does nothing since its
               | the exported products that pay for the imports, not the
               | currency.
               | 
               | The second theory is that in periods where demand exceed
               | that of supply. In those situation people will bid to buy
               | the limited resource, and if you increase the amount of
               | money circulating then the bids will simply go up for the
               | same limited resource. Natural gas is being used as an
               | example in Europe, where the only way to reduce inflation
               | is to reduce consumption. Reduced consumption however
               | slows economic growth and thus a conflict between
               | inflation and growth.
        
               | Jochim wrote:
               | > There are multiple studies and theories being put out
               | on why inflation occur, both now and in the past. I don't
               | really see a major consensus on a single explanation.
               | 
               | I wasn't suggesting a general explanation for all cases
               | of inflation. I'm saying that the current inflationary
               | period has some easily identifiable causes and the
               | measures that central banks take against general
               | background inflation are actively harmful in this
               | situation and instead should be tackled by government
               | directly.
               | 
               | The second theory is the closest explanation for the
               | current inflationary period and the measures are
               | perfectly fine if you're talking about curbing the
               | consumption of luxury goods and services. It falls down
               | when you're targeting the necessities of survival because
               | at that point you're effectively choosing to kill off
               | some of your population because of a refusal to regulate.
        
           | ZeroGravitas wrote:
           | The general trend of history seems to suggest this isn't
           | true.
           | 
           | Why do you think it is?
           | 
           | I mostly see propaganda and lies directed at stopping this
           | from happening rather than a basic human response to it.
           | 
           | Like say the 'welfare queen' myth, or the trope that 'giving
           | people money will just cause them problems or make them
           | lazy', seems you have to really stretch to convince people
           | that helping the poor is a bad idea and the standard human
           | response is to help.
        
             | rayiner wrote:
             | > Like say the 'welfare queen' myth, or the trope that
             | 'giving people money will just cause them problems or make
             | them lazy', seems you have to really stretch to convince
             | people that helping the poor is a bad idea and the standard
             | human response is to help.
             | 
             | In my experience, these attitudes are more common among
             | those who live around poor people than among those who
             | don't. It's my wife who taught me the difference between
             | "people who are good at being poor and ones who aren't."
             | Coming from a privileged background, I had no idea.
             | 
             | It's a sociocultural adaptation to scarcity. Historically,
             | whether you were in a Bangladeshi village or rural Oregon,
             | even the rich don't really have sufficient surplus to help
             | more than a few people. And there were no rich foreigners
             | or central government to swoop in. In that scenario,
             | anticipating and expecting help is maladaptive. Everybody
             | in the village needs to be incentivized to work as hard as
             | possible for themselves before relying on anyone else.
        
               | standardUser wrote:
               | "even the rich don't really have sufficient surplus to
               | help more than a few people"
               | 
               | This wildly underestimates how rich some people are in
               | the US. For example, just 5% of the wealth from _only_
               | the _20_ wealthiest Americans would cover all federal,
               | state and local funding for housing support in a year.
        
               | Domenic_S wrote:
               | Would be interested in your math.
        
               | throwaway0a5e wrote:
               | >In my experience, these attitudes are more common among
               | those who live around poor people than among those who
               | don't
               | 
               | It shouldn't exactly come as a shock that the people who
               | have to live in proximity to the results of such systems
               | have more to say about the downsides than those who can
               | just observe from their ivory tower and can look at some
               | spreadsheet, do a little math and say things like "net
               | positive" with a clear conscience. Even if you have very
               | good results the former group is simply going to be much
               | more aware of the tradeoffs than the latter who will at
               | best only know second hand.
        
               | ZeroGravitas wrote:
               | When did rural Oregon find out that there was in fact
               | several layers of central government available to help
               | them? Didn't they feel a bit foolish at that point?
               | 
               | It's great that they were all working so hard in grinding
               | poverty and just letting the weak die or whatever, very
               | inspirational, but being vaguely aware of reality might
               | have served them better overall.
               | 
               | The New Deal agriculture subsidies must have really
               | confused them if they didn't even know about the state
               | government.
               | 
               | https://www.oregonhistoryproject.org/narratives/the-
               | world-ru...
               | 
               | Hopefully they can ditch those unhelpful socioeconomic
               | adaptations they picked up now they've rejoined society.
        
         | beambot wrote:
         | Also seems to suggest that minimizing wealth gaps may _not_ be
         | the best objective function (by itself) relative to other
         | possibilities. Curious.
        
           | em500 wrote:
           | Let's imagine this in the most extreme form in a thought
           | experiment. An identical twin is stranded in the desert. You
           | have the means (water, transport) to save one of them. Is it
           | better to save one (which one?) or leave both to die? (I have
           | not settled on a firm answer so far.)
        
             | JoshTriplett wrote:
             | Any value system in which "save one person" is not
             | obviously and objectively better than "save zero people",
             | with no other tradeoffs or details present, seems
             | objectively incorrect.
        
               | notahacker wrote:
               | tbf real world tradeoffs are usually more like "save one
               | person with high degree of likelihood of success" vs
               | "attempt to save two people with significant likelihood
               | of failure"
        
             | beambot wrote:
             | The result from this study: Give one a glass of water, and
             | the other may end up swimming in a natural oasis -- both
             | live & have better lives.
        
           | simplebutimpact wrote:
           | You can have a large wealth gap, while still having a high
           | bottom standard of living. A great example of this is Sweden
           | https://www.youtube.com/watch?v=2E0dWHCnic8
        
           | ZeroGravitas wrote:
           | Did anyone suggest it was? That seems like a very weak straw
           | man of the very many sensible arguments from multiple angles,
           | for why vast wealth inequality is a bad thing for society,
           | including the members of the society with the extreme wealth
           | but surrounded by poverty.
        
             | zmgsabst wrote:
             | I think it exactly contradicts that:
             | 
             | Wealth gaps are a sign of wealthy societies -- the question
             | is wealth distribution, not distance from the lowest to
             | highest.
        
           | yunohn wrote:
           | Supplying handouts does not affect the wealth gap - giving
           | the needy some real capital like own housing, shops, etc
           | would actually contribute to that goal. Handouts don't help
           | enough because the money is spent on their necessities (which
           | was the point), and obviously that means the money
           | immediately flows to the rich ones that supply those items
           | (housing, food, etc).
           | 
           | Reducing the wealth gap is crucial, I think you're severely
           | misunderstanding.
        
             | newaccount74 wrote:
             | Yeah, this is an unfortunate side effect of many social
             | programs. Eg. housing assistance is just money that (1)
             | goes directly to landlords and (2) removes market pressure
             | and keeps prices for low quality housing higher than it
             | should be.
             | 
             | Way more effective would be caps on rent, but for some
             | reason politicians don't want to use this tool....
        
               | lupire wrote:
               | Caps on (housing) _rent_ suppress development. Caps on
               | rental _profit_ ( _economic rent_ ) suppress
               | profiteering.
        
         | martopix wrote:
         | "Trickling up" instead of "trickling down"!
        
           | xhkkffbf wrote:
           | Or trickling from the people who do nothing to the people who
           | have to produce something nice for the lucky ones to buy.
           | From the non-workers to the workers.
        
         | colechristensen wrote:
         | But you can also say the opposite: handouts increase inequality
         | and poverty.
         | 
         | Who is going to suffer because of the enormous covid handouts
         | and subsequent inflation?
         | 
         | It was nice while it happened but a lot of rich people really
         | benefited and a lot of poor people are going to go through the
         | worst consequences of inflation and recession.
        
           | ArnoVW wrote:
           | Even if I also have a hunch that your attribution of
           | inflation to handouts is true, I do not believe that it has
           | been established.
           | 
           | What is clear however, that increased prices for labor, wheat
           | and energy, combined with post-covid logistics issues, have
           | very clearly increased consumer pricing.
        
             | colechristensen wrote:
             | Inflation is due to the amount of money (over $10 trillion?
             | hard to find a solid number that doesn't end in bickering
             | about small details) created by the US Federal Reserve, in
             | no small part in order to pay for handouts to people in
             | businesses.
        
           | chongli wrote:
           | _handouts increase inequality and poverty._
           | 
           | Or perhaps another way to say it is this: cash doesn't
           | matter. It's all about capital. If you want to reduce
           | inequality, give the poor some capital. Unfortunately, I
           | think they'll likely sell their capital to buy food or pay
           | rent.
        
             | piva00 wrote:
             | Capital is only valuable when your basic needs are met. If
             | shelter, food, energy and transportation costs creep into
             | you every week it's just logical you'd trade some capital
             | for cash to meet those needs...
        
               | chongli wrote:
               | Yes, and unfortunately we've built a society where home
               | owners have all the power to ratchet up shelter and
               | transportation costs for everyone else.
        
               | pessimizer wrote:
               | And homeowners are increasingly becoming massive
               | companies rather than individuals. That's going to end up
               | being feudalism, right? The ownership of these companies
               | is going to be passed down through families.
        
           | tpxl wrote:
           | > Who is going to suffer because of the enormous covid
           | handouts and subsequent inflation?
           | 
           | Don't know how it played where you live, but in my country,
           | most covid handouts went to the rich, not to the poor.
           | 
           | 1. Cash was given to companies they could then give to the
           | people, instead of straight to the people.
           | 
           | 2. Cheap/free loans were given to companies/rich people, not
           | poor people, because poor people can't pay off loans so
           | nobody gives them any.
           | 
           | The insane stock market profits were the result of this -
           | rich people getting excess money. If it went to the poor
           | people, they'd buy food and shelter, not stonks.
        
             | colechristensen wrote:
             | In the US 1 & 2 happened in a big way certainly, but there
             | were also large direct payments to people below a certain
             | income along with significantly bumping up unemployment
             | benefits (to the extent that many were making more
             | unemployed than they were when they had jobs)
        
               | greedo wrote:
               | The amount of fraud in the PPP program alone might be
               | north of $80B. And the fraud in the other programs isn't
               | inconsequential either. "large direct payments" is a
               | joke, right? $2500 for a family? That's about one month's
               | income for people who had lost their jobs. And many
               | states decided not to extend their unemployment, or to
               | limit it drastically because business interests started
               | to complain about not being able to find enough wage
               | slaves.
        
               | remram wrote:
               | How large?
        
             | clcaev wrote:
             | One can so see how pandemic unemployment and other direct
             | payments also substantially benefited existing businesses
             | by not having demand for their goods and services drop,
             | causing a cash crunch in otherwise healthy businesses.
        
           | ZeroGravitas wrote:
           | > But you can also say the opposite: handouts increase
           | inequality and poverty.
           | 
           | They didn't say anything that would let you conclude either
           | of those things in the article, one they said the exact
           | opposite of. Not read the whole paper yet though.
        
         | theptip wrote:
         | It's interesting, this is the sort of thing that Angus Deaton
         | suggested when he argued against the EA program in a Rationally
         | Speaking podcast[1]. His premise is that cash transfers to the
         | needy won't work in a country where an oppressive government
         | can just take the cash for themselves. Perhaps this is part of
         | the effect here? (Bribes, taxation, etc.) I'm a bit skeptical
         | that this is a knock-out argument against the GiveDirectly
         | program, but it's definitely something to keep in mind and
         | explore further.
         | 
         | [1]: https://podcasts.apple.com/us/podcast/deaths-of-despair-
         | effe...
        
         | stormbrew wrote:
         | The problem is that the conservative perspective would largely
         | rather go without these net benefits than see someone they
         | think is undeserving, or worse "immoral" in some way, get any
         | benefit.
         | 
         | That's why we have means testing at all: not to prevent people
         | from needlessly getting benefits, but to prevent those who are
         | undeserving of them from getting them.
         | 
         | A lot of things make more sense when you understand this imo,
         | and stop trying to frame other people's views into your own
         | moral framework (giving you the mistaken impression that
         | they're hypocrites about it).
        
       | martopix wrote:
       | I like givedirectly very much, especially because they try to do
       | actual research on the outcomes. However I would love to see some
       | research that is not done directly by them, but is more
       | independent.
        
         | colinmhayes wrote:
         | Givewell has pretty in depth reports on the charities they
         | recommend. They've spent a very large amount of time trying to
         | figure out the efficacy of giveDirectly, largely because it is
         | effectively an infinite sink that all other philanthropic
         | activities can be compared against. Interestingly givewell just
         | recently demoted giveDirectly to instead recommend a charity
         | that does cash handouts to parents who get their children
         | vaccinated. I've got the report on my reading list but haven't
         | had a chance yet.
        
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