What If We Give It Away?

Matthew Yglesias on what rich people should do with their money, if they want to help the poor:

Alternatively, one under-discussed possibility is for a guy who has a lot of money and a desire to help poor people to just identify some poor people and give them some money. It sounds banal when you say it, but one of the main obstacles to people being less poor is that they don’t have enough money. If you give them money, they’ll have more of it. Will this be optimal in all cases? Of course not. But in the vast majority of cases, you’ll do some good. 

It’s tempting to believe that you’re on the merge of some major conceptual breakthrough in the field of philanthropy. But give some consideration to the possibility that you’re not. Perhaps if you have a special talent for anything, it’s a talent for making money. It’s not very hard to identify some people who might need money more than you do. Maybe you should just give them some, and then go back to making money.

Relatedly, if I were designing a welfare system from scratch, it would completely dispense with vouchers and stamps and basically be a system of direct cash transfers to the poor and working class, in the form of a negative income tax or some other method. As far as I can tell, food stamps, tax credits, and unemployment insurance aren't efficient as much as they are ways to compensate for our country's long-standing ethnic and racial suspicion. In other words, restricting government assistance to a category is a way of keeping "those people" from spending your money on needless luxuries.

Granted, Straightforward transfers would result in some waste -- though not much, in the scheme of things -- but would have the advantage of cutting out a good chunk of bureaucracy and might even save money in the long run. In any case, most poor and working-class people are perfectly capable of addressing their needs if they have the money to do so. Instead of complicating schemes to target assistance, it really would be better to just give them the money they need.

-- Jamelle Bouie

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