• Posts
  • RSS
  • ◂◂RSS
  • Contact

  • Debt Relief Is Bad Means Testing

    January 22nd, 2013
    giving, money  [html]
    Forgive student loans! End foreclosures and let people own their homes free and clear! Allow the free coinage of silver! The idea of reducing debt, either outright through forgiveness or indirectly through inflation has a long history. It's easy to see the appeal: forgiveness sounds merciful, people with debt seem particularly deserving, and lenders are unsavory. This comes down to moving money to debtors from lenders, the government [1], or donors.

    The "give people money and they will be better off" approach is a good one, but who should get the money? Student loan forgiveness primarily helps people who went to college; what about people who couldn't afford college in the first place, even without loans? People with mortgages to forgive are people with houses, but lots of people are too poor to own. The "has debt" criterion is not a good proxy for "needs our help".

    If we're going to give people money, the government would do better to expand the EITC (or institute a negative income tax). Individual donors would do better with unconditional cash transfers with targeting like "people in Kenya with thatch roofs". Targeting based on "do you have debt" is worse than our societal default of "is your income below $X".


    [1] A major lender in itself.

    Comment via: google plus, facebook

    Recent posts on blogs I like:

    The Gift of It's Your Problem Now

    Recently a security hole in a certain open source Java library resulted in a worldwide emergency kerfuffle as, say, 40% of the possibly hundreds of millions of worldwide deployments of this library needed to be updated in a hurry. (The other 60% also …

    via apenwarr January 1, 2022

    The container throttling problem

    This is an excerpt from an internal document David Mackey and I co-authored in April 2019. The document is excerpted since much of the original doc was about comparing possible approaches to increasing efficency at Twitter, which is mostly information tha…

    via Posts on December 18, 2021

    Experiences in raising children in shared housing

    Sometimes I see posts about people’s hope to raise children in a group housing situation, and it often seems overly optimistic to me. In particular they seem to expect that there will be more shared childcare than I think should be expected. Today I talke…

    via The whole sky October 18, 2021

    more     (via openring)


  • Posts
  • RSS
  • ◂◂RSS
  • Contact