Wednesday, August 9, 2017

Cash Aid to the Poor Huge Success!!!

I keep coming back to something Milton Friedman once proposed, a minimum income tax check to every American earning under a certain amount. He called it a negative income tax. It was crazy right? Here's Friedman's thinking:

Friedman's experiment would be impossible to pass legislatively, since Republicans are going in the opposite direction, making it almost impossible to get support by requiring drug tests, work requirements and time limits.

Kenya and Zambia Leading the Way: A variation of Friedman's idea is now taking off, slowly, but showing surprising success. Still, there are those who still think the waste factor and lazy people will make the whole thing impossible to carry out. There's a hope that two successful program experiments in Kenya and Zambia might start changing peoples minds. Here's the audio from NPR:
GiveDirectly announced that it will give every adult in this impoverished village in Kenya an extra $22 each month for the next 12 years — with no strings attached. The money is wired to bank accounts linked to each villager's phone.

GiveDirectly has actually been advocating for this kind of cash aid for the past decade. Founded by four grad students in economics who wanted to challenge traditional aid, the charity has already given $65 million to people across Kenya, Rwanda and Uganda, provided by a mix of Silicon Valley foundations and ordinary citizens who contribute through GiveDirectly's website. And GiveDirectly has shown through rigorous, independent study that people don't waste the money.

Some of the world's foremost researchers of anti-poverty strategies will be doing an independent study of the data that emerges.
Zambia recently ran a bold experiment: Instead of giving poor people traditional aid — seeds, or a cow or job training — officials handed out cash, with no strings attached.

GiveDirectly wants to see what happens when you give extremely poor people a much longer runway — a guaranteed "basic income" they can count on for years. Michael Faye, the chairman of GiveDirectly, says they've chosen to set the payment at $22 because in Kenya $22 per person per month is "the food poverty line — the amount of money it would take to afford a basic basket of food for yourself."

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