Quote:
Originally Posted by kzt79
And yes, the idea of “giving money to poor people for housing” is stupid and short sighted, if well meaning. It’s like how subsidized student loans ultimately served only to inflate the cost of education while saddling students with hugely increased debt. Any meaningful solution will come down to limiting demand and/or increasing supply. (Giving people money for housing would simply increase demand and therefore drive prices higher.)
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That's completely untrue. Any policy that involves the government spending money to intervene in the economy has an inflationary effect so that can't be avoided. But it isn't a significant effect for programs that are limited in scope to helping one subgroup of the population with one thing. And spending related to helping people access basic needs like housing avoids government spending in other areas by reducing social problems that would otherwise result. The important thing is whether it addresses the problem of the specific cohort you're trying to help.
Many or even most of the policies tools governments have to address housing affordability involve government spending. The only exceptions are perhaps things like loosening certain restrictions on development, but that doesn't tend to be enough on its own. And studies have been quite clear that the most effective way to help people whose problems are caused by a lack of money is to - not surprisingly - give them money. It isn't hard to find
such studies and it's even the central realization behind the GiveDirectly organization. They explain this very well and also have a link to numerous studies on their
home page.
There's no substance behind the "that's stupid" knee-jerk reactions. It's pure bias and Malthusian "conventional thinking". Whether or not it turns out to be the most effective option only time can tell, but the rationale behind it is completely sound (in terms of the actual evidence).
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