Free money might be the best way to end poverty

[pErvinalia]

In May 2009, a small experiment involving 13 homeless men took off in London. Some of them had slept in the cold for more than 40 years. The presence of these street veterans was far from cheap. Police, legal services, health care: Each cost taxpayers thousands of pounds every year.

That spring, a local charity decided to make the street veterans — sometimes called rough sleepers — the beneficiaries of an innovative social experiment. No more food stamps, food-kitchen dinners or sporadic shelter stays. The 13 would get a drastic bailout, financed by taxpayers. Each would receive 3,000 pounds (about $4,500), in cash, with no strings attached. The men were free to decide what to spend it on.

The only question they had to answer: What do you think is good for you?

“I didn’t have enormous expectations,” an aid worker recalled a year later. Yet the homeless men’s desires turned out to be quite modest. A phone, a passport, a dictionary — each participant had ideas about what would be best for him. None of the men wasted his money on alcohol, drugs or gambling. A year later, 11 of the 13 had roofs over their heads. (Some went to hostels; others to shelters.) They enrolled in classes, learned how to cook, got treatment for drug abuse and made plans for the future. After decades of authorities’ fruitless pushing, pulling, fines and persecution, 11 vagrants moved off the streets.

The cost? About 50,000 pounds, including the wages of the aid workers. In addition to giving 11 individuals another shot at life, the project had saved money by a factor of multiples. Even The Economist concluded: “The most efficient way to spend money on the homeless might be to give it to them.”

...........

In recent years, numerous studies of development aid have found impressive correlations between free money and reductions in crime, inequality, malnutrition, infant mortality, teenage pregnancy rates and truancy. It is also correlated with better school completion rates, higher economic growth and improvement in the condition of women.“The big reason poor people are poor is because they don’t have enough money,” economist Charles Kenny, a fellow at the Center for Global Development, wrote in June. “It shouldn’t come as a huge surprise that giving them money is a great way to reduce that problem.”

In the 2010 report “Just Give Money to the Poor,” researchers from the Organisation for Economic Co-operation and Development give numerous examples of money being scattered successfully. In Namibia, malnourishment, crime and truancy fell 25 percent, 42 percent and nearly 40 percent, respectively, after grants were given. In Malawi, school enrollment of girls and women rose 40 percent in settings where money was given with or without conditions on its use . From Brazil to India and from Mexico to South Africa, free-money programs have flourished in the past decade. More than 110 million families in at least 45 countries benefit from them.

It is time to apply these lessons to rich but increasingly unequal societies. A world where wages no longer rise still needs consumers. Middle-class purchasing power has been maintained through loans, loans and more loans. The Calvinistic reflex that you have to work for your money has turned into a license for inequality.

http://www.washingtonpost.com/opinions/ ... story.html

[cronus]

Poverty caused by a lack of money? Doesn't make any kind of sense to me.

[FBM]

Huh. This...is going to require some thought.

[Tyrannical]

And they don't have money because they don't have jobs

Now what are some reasons for not having jobs
dropped out of school
drug or alcohol addict
criminal record
lazy
dishonest
violent


If you were looking for an employee, what characteristics would you avoid? Poor people often have these negative characteristics, that's why they are poor. No one wants to hire them because of their bad behavior.

[Jason]

I wonder about the dependency problem. Will free money create a culture of dependence or will people take what they're given and do something to improve their life?

For example, many students get large loans and blow it all on whatever instead of paying for their education. Like my younger sister who just recently blew through $15,000 of student loans.

[laklak]

Saw a news report on the student loan "crisis". They interviewed this women who had borrowed $300,000 to get a 4 year degree in fucking photography and now (surprise surprise surprise) can't make enough money to pay back the loan.

So, color me skeptical as a motherfucker.

[JimC]

I wonder about the dependency problem. Will free money create a culture of dependence or will people take what they're given and do something to improve their life?

For example, many students get large loans and blow it all on whatever instead of paying for their education. Like my younger sister who just recently blew through $15,000 of student loans.

In Oz, the basic type of student "loan" is simply that the university fees are paid automatically via a low-interest loan, which you start paying back when you have a job. Most uni students these days live at home, so all they need is some part-time work to pay for entertainment and sundries.

Mind you, the uni fees can be paid up-front as well. To encourage this, if you pay in that way, the entry requirements for a course are slightly lower. That means rich kids whose daddies can pay fees up front have a slight advantage, which is not a good thing...

[MrJonno]

I wonder about the dependency problem. Will free money create a culture of dependence or will people take what they're given and do something to improve their life?

For example, many students get large loans and blow it all on whatever instead of paying for their education. Like my younger sister who just recently blew through $15,000 of student loans.

Some people will abuse it some will get themselves out of trouble, you need to take the morality out of it and ask 'will this cost society less overall by doing this?' and 'will more people be better off than worse off'?

[cronus]

I wonder about the dependency problem. Will free money create a culture of dependence or will people take what they're given and do something to improve their life?

For example, many students get large loans and blow it all on whatever instead of paying for their education. Like my younger sister who just recently blew through $15,000 of student loans.

Some people will abuse it some will get themselves out of trouble, you need to take the morality out of it and ask 'will this cost society less overall by doing this?' and 'will more people be better off than worse off'?

Take the morality out of the equation and please ignore the rising inflation figure in the corner as this free money works it way up to the top where it belongs.

[Xamonas Chegwé]

Well, I for one am prepared to give it a try. Can I have my 3 grand now, plz?