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The Almighty Buck Science

A Bit of Cash Can Keep Someone Off the Streets For 2 Years or More (sciencemag.org) 618

An anonymous reader writes: If someone is about to become homeless, giving them a single cash infusion, averaging about $1000, may be enough to keep them off the streets for at least 2 years. That's the conclusion of a new study, which finds that programs that proactively assist those in need don't just help the victims -- they may benefit society as a whole. "I think this is a really important study, and it's really well done," says Beth Shinn, a community psychologist at Vanderbilt University in Nashville who specializes in homelessness but was not involved in the work. Homelessness isn't just bad for its sufferers -- it shortens life span and hurts kids in school -- it's a burden on everyone else. Previous studies have concluded that a single period of homelessness can cost taxpayers $20,000 or more, in the form of welfare, policing, health care, maintaining homeless shelters, and other expenses. To combat homelessness, philanthropic organizations have either tried to prevent people from losing their homes in the first place or help them regain housing after they are already destitute. But there aren't many data on whether giving cash to people on the brink of becoming homeless actually prevents them from living on the street.
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A Bit of Cash Can Keep Someone Off the Streets For 2 Years or More

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  • Very Basic Income (Score:5, Interesting)

    by Anonymous Coward on Thursday August 11, 2016 @06:17PM (#52686971)

    I'd favor a basic income. A very basic income. Something like the following.

    For citizens and permanent residents (Green Card holders).
    $500/month 21+ years old
    $250/month for 21 and younger
    Add $200/month/person if we get rid of S.N.A.P.

    Increase progressive income taxes. Institute a 10% Universal Basic Income tax on AGI on citizens and permanent residents.

    Not an addition to social security payments. More like an "expanded social security", except this is below the special minimum or wharever it is called.
    I estimate it would cost $1.2 trillion to do the idea above.

    • Re:Very Basic Income (Score:4, Informative)

      by lgw ( 121541 ) on Thursday August 11, 2016 @07:00PM (#52687259) Journal

      This would require a ~50% increase in federal spending. America has tried many tax structures over the years, but nothing has ever sustained government revenue over 20% of GDP. We're currently spending 18% of GDP. There's no evidence that it's possible under any tax program to get revenue anywhere near that.

      • by AK Marc ( 707885 ) on Thursday August 11, 2016 @07:31PM (#52687475)
        Drop all other welfare, and run the numbers again. It'd be a spending cut. Not an increase. And if a welfare state is as bad as the Republicans say, we can eliminate the massive military spending, because nobody would want to invade. Net savings, and increased benefits.
        • Ok lets run the numbers

          lets call it an even 300 million people in the country instead of 320
          lets call the stipend a flat 10k instead of 12k or more proposed

          that's 3x10^8(10^4)= 3x10^12

          Or 3 trillion per year vs the entire current federal budget of approximately 3 trillion per year

          that also assumes no overhead in running the program.

          • I've run the numbers [wordpress.com], including impacts on HUD-qualified households, on low-income households, on high-income households, on families, on single individuals, on single parents, and even on retirement [wordpress.com]. I even included a public aid system targeting children and naturalized Americans in low-income households, avoiding the known-unknown risk of handing out straight cash for welfare babies and gold-digging immigrants.

            It's a trillion dollars cheaper than our current model, and completely remediates all defect

      • A basic income is easily (and ideally) self-funding. You give everyone x% of the mean income, you tax everyone x% of their income, the math automatically works out because that's what averages do, and because of the distributions of incomes we have about 75% of people see a net gain from this (the mean is about the 75th percentile), and the vast majority of even those above the mean see a very small loss overall (in increased taxes minus their own basic income they receive), because a ridiculously huge chun

    • Based on your figures, that amounts to ~$1.47 trillion if we use the 2010 census data. [census.gov] Social Security, Medicare (and similar health programs), and other safety net programs accounted for a little over $2.18 trillion in 2015.

      At that rate you could pay adults 18 and over $700 per month and children under the age of 18 $350 per month and break even assuming you eliminated those other programs. I'd suggest that all payments to children be deferred until they hit 18 otherwise you'll get some idiots acting li
  • I believe it (Score:5, Insightful)

    by Prien715 ( 251944 ) <agnosticpope@gmai[ ]om ['l.c' in gap]> on Thursday August 11, 2016 @06:24PM (#52687003) Journal

    There was a chapter in SuperFreakonomics about the cost of homelessness to society via emergency services and law enforcement and how free housing is a cost-effective solution. It's good to see another example of their hypothesis that simply providing free services to the homeless is cheaper than the status quo.

    People against this idea who say "I'm a small government conservative and I don't believe in giving people free stuff" miss the point entirely; this saves money and reduces the size of government in turn. Anyone who has moral problem with saving money by helping people is likely an Ayn Rand fan or an asshole, but probably both;)

    • Re:I believe it (Score:5, Insightful)

      by npslider ( 4555045 ) on Thursday August 11, 2016 @06:35PM (#52687081)

      I was taught to never give cash to someone who is hungry, in my town, nine times out of ten it's for booze and smokes.

      We offered food to someone who said they NEEDED money for food. They rejected the kindness with cursing.

      Giving a place to stay for the homeless, yes, that is much safer.

      • Re: (Score:2, Funny)

        by Ichijo ( 607641 )

        We offered food to someone who said they NEEDED money for food. They rejected the kindness with cursing.

        How would they know whether you had spit in it first?

      • Re:I believe it (Score:5, Insightful)

        by PatientZero ( 25929 ) on Thursday August 11, 2016 @06:48PM (#52687177)

        We offered food to someone who said they NEEDED money for food. They rejected the kindness with cursing.

        We've all read that anecdote before. I once offered a friend a bite of my sandwich because it was really good, but he said he didn't like turkey. I learned my lesson, and now I never offer to let my friends taste my food. Problem solved!

        Or maybe we should find what works for a range of situations and apply the solution that fits best in that moment? Instead of handing out bags of cash, perhaps start with an interview with a social worker trained for this, and directly pay their rent/mortgage/car/bills. Work with local grocery stores to buy groceries. It ain't rocket science.

        Giving a place to stay for the homeless, yes, that is much safer.

        The point is to help people avoid becoming homeless in the first place--and save money to boot.

        • Homeless shelters have been in the news lately because they are far from safe. Kids are developing anemia because they are so drained by bedbugs. And it's not just kids either. There are also numerous other complications [asm.org].

          And shelters are dangerous [alternet.org].

          Once someone gets that low, how does anyone expect them to get back on their feet? Far better to prevent it in the first place. The people who rant on about how it's somehow wrong better hope that karma doesn't bite their ignorant asses.

          • Yes it is far better to prevent it in the first place. The government not only cannot do this; they do not want to because a large portion of government funds and jobs go into running homeless shelters. The motivation the government has as a whole is to create more poor people, not fewer.

            The sooner you realize the government has evolved to farm poor people for its own growth, the better off you will be.

            Contribute to private charities, they are actually trying to help people.

      • Re: (Score:2, Interesting)

        by rmdingler ( 1955220 )

        We offered food to someone who said they NEEDED money for food. They rejected the kindness with cursing.

        We have daily beggars that we've pretty much made a sport of trying to circumvent. It's difficult to be a rock every day, and they eventually wear you down into some ill-advised stray-feeding.

        Our running joke is that if one of them holds up a sign that says I need a drink! he gets a twenty.

        We have a one-legged gal who Sharpied On My Last Leg as her cardboard plea.

      • Re:I believe it (Score:5, Insightful)

        by phantomfive ( 622387 ) on Thursday August 11, 2016 @06:57PM (#52687229) Journal
        Homeless people have such miserable lives. The things you and I typically worry about would be like paradise for them, and on top of that they typically have a healthy dose of hopelessness. They know they are messed up. Here's what homeless people need: friendship, love, happiness.....maybe therapy.

        In most cases, I'm not willing to give them friendship or love, so I give them a bit of cash so at least they can get a little bit of happiness (or deaden the pain, as it may be).
        • This is why I wish to truly help them and not contribute to an addiction.

        • Re:I believe it (Score:5, Interesting)

          by ajlisows ( 768780 ) on Friday August 12, 2016 @04:12AM (#52689301)
          Because i'm a little bit insane myself, I've taken in four homeless people in the last three years. I give them a place to stay and make sure they are fed. In exchange they clean up around the house and help me prepare meals. I also give them each a (barely functioning) laptop of their own so they could look for jobs. One oft hem took quickly to repairing computers and did side jobs (Mostly virus cleanup/backup and wipe type stuff. It took 4 to 7 months for the first three to get on their feet and get a job and get their own place. Not everyone has friends and family that have it within their means to help them out.....the people i took in came from poor families. I took in women and the common thread was that they did have places to stay....at the cost of being taken advantage of sexually. It is amazing how much easier it is to get your shit together when you don't have to worry about finding your next meal. It's amazing how much fewer drugs you need to abuse to get yourself to sleep on a futon in a warm house than on cold rock under a bridge. its' amazing how much trust, friendship, and loyalty (and an occasional bit of advice.....where to get help for depression....how to make a resume) mean just as much as financial help. My latest one took a bit longer....it's been 9 months and she is working part time and got enough some financial aid/grants to get into school. Shes' going to stay here a few more months and pay me a very modest rent. Her goali s to get her own place by the end of the year. They have turned out to be good, well adjusted people i am proud to call my friends. It cost me some money (and some sleepless nights), but damn it feels good to truly help someone out and see the results. i think my days of altruism to this extreme are over for awhile though!
      • I was taught to never give cash to someone who is hungry, in my town, nine times out of ten it's for booze and smokes.

        You were brought up wrong. And where do you get "nine out of ten"? Did you do a study of people asking for money on the street?

        • Re:I believe it (Score:4, Informative)

          by npslider ( 4555045 ) on Thursday August 11, 2016 @07:23PM (#52687417)

          The best way to get money for booze, smokes, or drugs is to "claim hunger". I have seen it far too often.

          This is why I will always offer food, but not CASH. I am not being evil, but careful.

          I should have said most of the time instead of 9 out of 10. That was a poor choice of words.

          My information comes from my own experience and from a non-profit group that focused on helping people on the street, with years of experience doing so.

          • Re:I believe it (Score:5, Insightful)

            by silentcoder ( 1241496 ) on Friday August 12, 2016 @07:31AM (#52689821)

            Whereas if I choose to give money to somebody begging I couldn't care less what they spend it on.
            That's how "giving" works. The second it leaves my hand it is NO LONGER MY MONEY. It's NOT My property anymore and it's NOT my business.

            But then, I'm not a sanctimonious asshole.

      • I've witnessed people giving food to beggars many times. They've all accepted it with thanks. Your example seems to be an outlier.

    • It's very very difficult to overcome the western idea that "you've got to have something to trade" in this situation - people don't see trading their stuff (tax dollars) for lack of destitution as "getting something" - that is - paying less for something in the long run is rarely seen as a "something" to get. Or alternatively, paying a little for something now rather than a lot for it later is also not seen as as a good "trade".

      There's also the problem that even for people who do think that trading a littl

      • Re:I believe it (Score:5, Insightful)

        by guises ( 2423402 ) on Thursday August 11, 2016 @07:01PM (#52687261)
        Well yes they've never seen the benefit, that's the whole problem - these sorts of benefits are invisible. It's a very common issue: is it really worth investing in rehabilitation and crime prevention? No one expects to get robbed, it's not a surprising day when a mugger doesn't hold you up. When people hear about crime they think, "We need more police to go get that criminal." not, "How can we convince this criminal to stop committing crimes?" Both approaches work, but the second option is way more effective. Same for international relations: "Spend more on aid?" or, "Buy a few more tanks?" Or how about: is it really worth investing in IT? No one throws a party for not losing the company's data.

        Or investing in infrastructure or education: even though the benefits are well documented, they're mostly invisible. Tanks and police are something you can see.
    • Re:I believe it (Score:5, Insightful)

      by Anonymous Coward on Thursday August 11, 2016 @06:48PM (#52687175)

      It can cost between 20K and 60K to put someone in prison.

      Thats per inmate, per year.

      I wonder how much money you could save by doing this:

      "This is your first offence. We'll pay you half of what it costs to keep you in prison so you can feed yourself, pay rent, look for work or keep your job. You also have to wear this GPS ankle bracelet and check in with us every few weeks to prove you're not a fuck-up. Also you need to get a job if you're able. Otherwise you're going to prison."

  • Pretty much everyone normal has had a phase in their life where they had unexpected expenses combined with an income shortfall and not enough assets to raise any cash (human or financial assets).

    I think in many cases, especially when you're young, and if its a short-term issue we all manage to squeak by, somehow without becoming homeless or destitute. But I know I can remember a couple of occasions where it was obvious to me that if one more thing happened, I would be fucked.

    The problem with bailing everyo

    • I think everyone can say in one form or another (depending on your beliefs) that but by the Grace of God, we were only one more 'thing' away from loosing it all, and at the last minute we got back on our feet. Some later, possibly did loose it all, but how many "near misses" have we had we did not even know of...

    • by frnic ( 98517 ) on Thursday August 11, 2016 @07:02PM (#52687275)

      So what if there is abuse? If the end result is a cost savings to society and an improvement in the life of most involved why not? I constantly hear this from conservative friends that we can not allow people to abuse the system - look at the people selling food stamps to buy drugs - OMG! when the fact is that a very small percentage do abuse the system while the vast majority are helped by it.

      It has always fascinated me how even a single instance of welfare fraud is unacceptable, but multiple executions of innocent individuals is an acceptable cost to getting the bad guys.

  • There is a big, but often hard to detect difference between giving someone a handout and helping them to recover from a crisis.

    It all depends on the person. Hard times can hit even the most responsible people (they need help). Other people are the definition of irresponsible, becoming parasites if enabled by others (taking handouts). There needs to be ways to determine what kind of person is requesting help, and act accordingly.

    Most Americans are just a paycheck away from financial disaster, with no savings

    • by AK Marc ( 707885 ) on Thursday August 11, 2016 @07:40PM (#52687527)
      So what? The studies on the "drug test those on welfare" have shown that the tests cost more than the benefits received by those who tested positive. If you want financial responsibility, you should pay out the drug users. But we don't want "responsibility", we want punitive games. Punish people we don't like, even if the cost of the punishment is much greater than the problem caused. Most welfare recipients are white, but people think of the "average" welfare recipient as a Black person. Why? Studies have shown that if you show the plight of poor whites, then ask about welfare, people are more willing to increase welfare, than if you ask without that background, or show Blacks on welfare.

      It's more a racial issue than a financial one.
  • A very "someone" (Score:5, Informative)

    by raymorris ( 2726007 ) on Thursday August 11, 2016 @06:31PM (#52687053) Journal

    The study showed something much more specific than the summary mentions, and sometimes the opposite of what the headlines indicates.

    Quoting the article, good outcomes were likely when :
    --
    giving one-time cash quantities to people on the brink of homelessness who can demonstrate that they will be able to pay rent by themselves in the future, but who have been afflicted by some nonrecurring crisis, such as a medical bill. Recipients need to be able to demonstrate consistent future income
    --

    Not so effective, the study found, was giving cash to people carelessly. If someone was broke last year, and the year before, and they were broke last month, they'll probably be broke again next month.

    Personal experience helping ex-cons, alcoholics, and drug addicts is that *most* people will continue doing what they've been doing, and continue getting the same results. The trick is to find the ~5% who are doing something different, so they'll get different results, and help them.

    • giving one-time cash quantities to people on the brink of homelessness who can demonstrate that they will be able to pay rent by themselves in the future, but who have been afflicted by some nonrecurring crisis, such as a medical bill.

      This is like adding money into a responsible persons emergency savings account.

      Not so effective, the study found, was giving cash to people carelessly. If someone was broke last year, and the year before, and they were broke last month, they'll probably be broke again next month.

      This is like giving an alcoholic a gift card to the corner liquor store.

    • Ya this very much seems to be a case of providing a safety net for someone who doesn't have one or who has run through theirs. I can see why that would help. Unless you are super rich, you can get hit with expenses just beyond your ability to deal with. Even if you have a few million, there are still edge cases that can happen that can deplete your resources. Of course the less you have, the easier it is to get them depleted.

      Well when that happens, it can snowball real bad and you lose everything, it gets i

  • Maybe I'm oversimplifying but it seems to me there are mostly 3 basic reasons why people are homeless.

    1) Fundamentally stable person who had a bad life emergency situation that wasn't their fault but they were unprepared, followed by a lack of opportunity to recover (e.g. laid off or bad health issues) (would do the right thing with $1000 given the opportunity, but $1000 would not be nearly enough to make a real difference)

    2) Mentally disabled (because society pushes many out on the streets instead of provi

    • It seems that by and large, a one time $1000 boost will only help a person in a very specific one-time minor predicament.

      - Major medical bills eat $1000 bills for breakfast
      - The mortgage / rent always comes the following month.. and the following month
      - A true crisis is usually not over a matter of $1000, but several contributing factors.

      • by AK Marc ( 707885 )
        A true crisis is 10 (or whatever) things, and the car breaks down. $1000 could fix/replace the car, and start back on the road to recovery. But selling the broken car for $50 and losing your job because you can't get to work on time without a car results in the homelessness.

        I've seen multiple people where they had the choice of eat or be homeless. Often it's people right on the edge, then work decides to cut their hours a little, squeezes down. They start looking for something else, but don't find a
    • Re:$1000? (Score:4, Insightful)

      by AK Marc ( 707885 ) on Thursday August 11, 2016 @07:46PM (#52687559)
      #3 is a red herring. It's the demon that's invented to lump all the #1 into, so we don't have to think about the millions of responsible and stable people who end up homeless.

      Almost all homeless are #1. And $1000 could make all the difference. But if you hate #3 so much that you'r rather have 1,000,000 #1 than pay 10 #3, then it's not a financial choice, but a personal and punitive one.
  • FTA: (Score:4, Insightful)

    by rmdingler ( 1955220 ) on Thursday August 11, 2016 @06:32PM (#52687061) Journal

    The programs work by giving one-time cash quantities to people on the brink of homelessness who can demonstrate that they will be able to pay rent by themselves in the future, but who have been afflicted by some nonrecurring crisis, such as a medical bill.

    I don't know how many of you have experience with being really poor, but if the rent/mortgage/light bill money is in jeopardy, the medical bill is from the County Hospital emergency room... and it goes in the circular file.

  • One can't argue with the economics, but it seems to me that the part left out is that said homeless person will take the two grand and find a place to live. Besides, say, buying alcohol or drugs.

    On the other hand, if a significant enough percentage of homeless do use the money wisely, maybe the program is still an overall win.

    But then, what of the people who aspire to be homeless so they can get the handout?

  • Here is the crucial quote from the article that is left out of the summary:

    The programs work by giving one-time cash quantities to people on the brink of homelessness who can demonstrate that they will be able to pay rent by themselves in the future, but who have been afflicted by some nonrecurring crisis, such as a medical bill. Recipients need to be able to demonstrate consistent future income, and the amount given needs to actually cover their housing expenses for the month.

    The primary difficulty (as the article mentions) is recognizing people who are about to become homeless who could be helped by this.

  • by twotacocombo ( 1529393 ) on Thursday August 11, 2016 @06:56PM (#52687225)

    In the area where I work, there are quite a few homeless people. I've seen one guy out here for 9 years now. He isn't homeless because of some financial disaster. He is homeless because he clearly has a disease of the brain. He spends quite a lot of his time locked in combat with somebody in the sky. I don't think giving him $1,000 or $1,000,000 would keep him off the streets for long, if at all. What he really needs to get him indoors is treatment for his disease, but as is the case with many people with his type of affliction, he'll probably be back out here sooner or later.

    "Homelessness" isn't always somebody without a home who wants one. It's a problem you can't just throw money at to make it go away. You can't just give all of these people jobs and consider the problem solved. It needs to be treated as a symptom of a disease, and one that usually cannot be permanently cured. Even if you could cure it, they are still human beings who deserve to have their wishes respected, and if they refuse treatment you cannot just force it upon them. Some people make the choice to live out there, because it's easier to cope with their disease this way. The next time you see a homeless person, please don't look down on them like some dirty bum pushing a stolen cart full of blankets and trash; they're probably suffering far more than you'll ever know, and it's most likely not at all their fault that they're in that state.

  • Welfare as lump-sum (Score:2, Interesting)

    by Anonymous Coward

    There has also been experiments done with lump-sum welfare and monitoring how people are after a period.
    There was even a TV show in the UK that generally tends to have way too many TV shows about benefits abuse.

    Basic idea is give a years worth of welfare payments all at once.
    A large percentage of these people, expectedly, had a once-off celebration before starting to get to work in order to actually get a stable income going, start their own business or find a job without having to worry their asses off abo

  • by labnet ( 457441 ) on Thursday August 11, 2016 @07:33PM (#52687489)

    American Culture seems to be strongly influenced by 'every man for himself'; or more subtly, your destiny is made by you and the effort you put into life. If you happen to be lazy, then suffer you.

    I think there are three levels of maturity in a people and society:
    1- Dependency (Child Stage)
    2- Independence (Late Teen Stage). ie I can do it without anyone's help
    3- Interdependence (Mature Stage) we all need to work together.

    The USA seems to have gotten stuck between 2 & 3, while Europe/Canada/Australia went on to stage 3.
    ie, We have strong social support systems such as good basic free medical care, good basic social security services, humane prisons with some attempt to reform.
    While I as a tax payer don't like supporting lazy people, I think it is the lesser of two evils. ie having destitute people resort to crime with all the associated costs.
    So I think the article is right, but culturally I don't see the USA ever changing within my lifetime.

  • In other news (Score:4, Insightful)

    by silentcoder ( 1241496 ) on Friday August 12, 2016 @05:52AM (#52689523)

    Libertarians across the USA are scrambling to explain that giving people cash before they go homeless will only turn them into dependent slaves and no matter what the science says it is guaranteed to doom them to poverty even faster while simultaneously requiring the stealing of money from people who worked harder than they did because libertarians can't quite figure out that there is such a thing as luck and sometimes somebody can have great luck and sometimes you can have terrible luck and a huge chunk of the luck you have in life is already present in who your parents are and what color their skins is.

    Because libertarians would rather trip over sidewalks full of starved corpses than spend an extra dollar in taxes.

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