Wednesday, December 14, 2011

This is brilliant

This is one of the most brilliant synopses of the American welfare problem I’ve ever read. 

“By putting a pretty good safety net under people we've eliminated a lot of the really bad results that come from making poor choices. Few people dying of hunger, not likely to be kidnapped and sold into slavery, debtor's prisons are rather empty now. In other words we've severely reduced the area in the left tail of the distribution.
But the unexpected consequence of reducing the left tail is that many people don't really care if bad things happen. If you're OK with ending up in what we call low poverty -- low paying or no job, living in public housing, foregoing long term relationships, rarely eating out but with lots of food money to spend -- then the amount of work necessary to get out of the poverty trap just isn't worth it.
So the safety net keeps people out of historic versions poverty, but keeps them low by American standards since the effort to keep where they are is so small but the effort to move up the income distribution curve is daunting. A modern tradeoff. Probably for the better, but only time will really tell.”

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