Home > Uncategorized > The K.I.S.S. Solution to Inequality

The K.I.S.S. Solution to Inequality

January 20, 2014

I first recall hearing the K.I.S.S. (Keep It Simple Stupid) acronym in a ROTC class as a freshman in college. The lieutenant teaching the course used it to make the point that if directions or procedures are complicated, it increases the chances for mistakes. Therefore, whenever possible the military tried to keep procedures as simple as possible because mistakes would cost lives.

A recent study reported in the NYTimes is evidence that the KISS acronym should be applied to the government’s efforts to address inequality. We have a convoluted and bureaucratic means of distributing money to those in poverty.  Instead of giving low-income people a predictable stream of money and letting them spend it as they see fit, the government develops means tests that require bureaucrats to oversee and develops complicated rules that require even more bureaucrats to manage. Invariably, some people try to break the rules, which often results in MORE rules or MORE layers of bureaucracy. This cycle repeats itself and before you know it there is a byzantine bureaucracy, endless rules, and blame placed on victims.

The Times article, “What Happens When the Poor Receive a Stipend?”, describes a study that was designed to measure how members of the Cherokee Nation were affected when they began receiving a $6,000 direct payment from the tribal leaders when a casino opened on their reservation in 1996… a stipend that increased to $9,000 as the revenues from the Casino increased. Here’s what the study found:

The poorest children tended to have the greatest risk of psychiatric disorders, including emotional and behavioral problems. But just four years after the supplements began, Professor Costello (the person who conducted the study) observed marked improvements among those who moved out of poverty. The frequency of behavioral problems declined by 40 percent, nearly reaching the risk of children who had never been poor. Already well-off Cherokee children, on the other hand, showed no improvement. The supplements seemed to benefit the poorest children most dramatically.

The story gets better. Because the stipends have now been in place for several years, it was possible to conduct longitudinal studies on children at different times of their lives… and here’s what she found:

The earlier the supplements arrived in a child’s life, the better that child’s mental health in early adulthood…. (children who received supplements earliest) were roughly one-third less likely to develop substance abuse and psychiatric problems in adulthood, compared with the oldest group of Cherokee children and with neighboring rural whites of the same age.

The article details several studies on how poverty affects brain growth, parental stress, and how a predictable revenue stream mitigates those adverse affects. As one researcher concluded: “…cold hard cash made the real difference” in the positive outcomes… Cash that was provided unconditionally and predictably. BOTTOM LINE: A guaranteed minimum wage for an honest days work would be easier to enforce than all of the convoluted rules and regulations that are used to supplement income today.

 

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