shanek and Giving USA

[Thanz]

Since shanek keeps referring to Giving USA stats in his various responses to various threads, I thought it might be a good idea to discuss them in a thread that can be easily referenced and referred to by all concerned.

Also, I'd like to take issue with the numbers as he presents them in his arguments.

From another thread, here is a post of shanek's where he argues that private giving would make up the welfare gap if we eliminate the income tax: Why can't they do more? Possibly because government takes 48% of the National Income in taxes. According to Giving USA, people give on average 2.1% of their take-home pay to charities, regardless of tax rate, deductions, etc. Let's do some figuring:

On average, people have 7% of their paychecks taken to pay for welfare. The Federal government loses 2/3rds of this money to overhead, whereas private charities all lose less than 1/3rd. So even being generous, we're still looking at half as much money, or 3.5%, actually gets to welfare recipients. Since fully half of the people on welfare are actually capable of supporting themselves (who are weeded out by charities), this takes down to 1.7% the amount which go to people that need it.

We're already below the amount that would go to the poor through charities if we simply repealed the Income Tax. Now, add to that the fact that it costs the government 66¢ to collect $1, and we're left with just .5% of our tax money actually going to those who need it.

Whereas, if we cut out all of these programs and eliminated the Income Tax, the poor would receive over four times as much money through as the government gets to them now!

I don't know where shanek gets the stat that 2/3 of welfare money goes to overhead. Seems high to me. But, leaving that aside, I would like to address his assertion that the poor would receive four times as much as they presently do.

I have found an online source for the giving usa stats here (http://www.netaonline.org/02ForumAltman.ppt) It is a power point presentation, but contains many of the basics.

First, I'd like to challenge shanek's 2.1 assertion. The graph in the source above indicates that individual giving is about 1.8% of personal income (fairly steady over the last 30 years) Not a big difference, but we may as well be accurate.

Second, and more importantly, shanek's arguments make the unwarranted assumption that the entire 1.8% (not the claimed 2.1%) would go to "the poor". This is simply untrue. The breakdown of giving, as provided in that source, is as follows:

Religion - 38.2%
Education - 15.0%
Human Services - 9.3%
Health - 8.7%
Arts, Culture - 5.7%
Public - Society - 5.6%
Environment - 3.0%
International Affairs - 2.0%
Foundations and Unallocated - 12.1%

Unfortunately, the presentation doesn't say what is included in each category. But as I add it up, that makes over 70% of giving to religion, education, health, arts & culture, environment and international affairs. Some of the religion donations will go to helping the poor, but not all of the other categories will be 100% for the poor. So, I think that it is fair to say that only 30% (at its highest) of giving goes to directly helping the poor.

So, rather than shanek's claimed 2.1% of income going to the poor, we actually have 30% of 1.8% of income, or .54% of income - at the maximum. It is likely even less, as I would expect the unallocated category to contain a whole hodge podge of causes unrelated to helping the poor.

Even if we accept shanek's breakdown of costs and "the people who really need it", they are better off now than under his system.

Now: .5% from welfare, plus .25% from charities (approx - .5% of the 50% of take home income) for a total of .75% of income.

After repeal: .54%(highest) of income.

So, even if people increase their giving after the repeal of income tax to remain at the same percentage basis (which is arguable - most people give in absolute rather than percentage terms) the poor would be worse off if we repeal the income tax and demolish welfare.

shanek, I look forward to your response.


edited to fix link

[Victor Danilchenko]

And don't forget, there is a fundamental economic problem with charity -- it's extremely susceptible to free-rider condition. People may be willing to give a higher rate of their income to charitable purposes, provided everyone gives thusly -- hence taxation and redistribution. This issue makes it extremely difficult to sustain the argument that charitable giving alone can do as much to relieve poverty and hardship as government infrastructure can.

In fact, poverty existed and was extremely harmful before government intervention -- consider UK poor-house laws for example, where a basic (and rather inhumane) destitution relief infrastructure was instituted in during the industrial revolution, to address the rampant problem of umeployment, poverty, and deprivation.

[a_unique_person]

One of the major problem with government services is that they are exactly that. Private institutions can 'downsize', ignore markets, automate, outsource overseas, mechanise.

The government has to provide services to all people, using people. The cost savings to be had are not much. There is also the fact that for some reason, investment in infrastructure that would actually save money is seen as government 'waste'. Hence, while other western countries were installing modern air traffic control systems, the US was stuck with computers that still ran on valves.

[Tmy]

Lots of people give to charity because of tax deduction purposes. No income tax, no deductions, no giving to charity.


where do they get this "7% of paycheck to welfare" number?.

[Michael Redman]

There is, I think, absolutely no reason to think that people will give the same portion of their income, rather than the same amount of money, or some other amount altogether. Is there any evidence, anywhere, that even suggests that people will give away the same portion of income if they get to keep more of it?

[shanek]

Originally posted by Thanz
I don't know where shanek gets the stat that 2/3 of welfare money goes to overhead. Seems high to me.

I'll have to dig the source back up and get back to you on that one. If you choose to disregard it until I do, that's understandable.

I have found an online source for the giving usa stats here (http://www.netaonline.org/02ForumAltman.ppt) It is a power point presentation, but contains many of the basics.

I don't have powerpoint, and for some reason OpenOffice doesn't want to open it. I'll take it as read for the time being that they're the same figures, but just note I haven't seen the presentation yet.

The original source information is here: http://www.aafrc.org/giving/

Second, and more importantly, shanek's arguments make the unwarranted assumption that the entire 1.8% (not the claimed 2.1%)

From examining your figures quoted below, they match the 2002 report at the site above (I initially used the 2001 report when I first compiled these statistics). The 2001 report does in fact show 2.1% of giving. Here's an excerpt from the 2002 report:

"Research shows that giving is closely tied to the economy. Not surprisingly, giving in 2001 fits the pattern that we have seen during previous recessions... In six of the eight recession years since 1971, giving dropped by 1 to 5 percent when adjusted for inflation. Despite fears last fall that giving might decline precipitously, in fact, the change in giving in 2001 falls within the normal range for a recession year."

The 2001 report on page 6 said, "Total giving represented 2.1 percent of the Gross Domestic Product in 2001, close to the level from 2000 and 1999."

So my 2.1% figure is more reflective of the average, and your 1.8% figure is lower than average, because those statistics were collected during a recession.

would go to "the poor". This is simply untrue. The breakdown of giving, as provided in that source, is as follows:

Religion - 38.2%
Education - 15.0%
Human Services - 9.3%
Health - 8.7%
Arts, Culture - 5.7%
Public - Society - 5.6%
Environment - 3.0%
International Affairs - 2.0%
Foundations and Unallocated - 12.1%

Okay, I'll grant that Arts & Culture, Environment, and International Affairs have nothing to do with the poor. But all of the rest would seem at least some degree to go to people who would otherwise be helped by welfare.

Unfortunately, the presentation doesn't say what is included in each category. But as I add it up, that makes over 70% of giving to religion, education, health, arts & culture, environment and international affairs. Some of the religion donations will go to helping the poor, but not all of the other categories will be 100% for the poor. So, I think that it is fair to say that only 30% (at its highest) of giving goes to directly helping the poor.

That sounds very low to me. What are you basing it on? Giving to health and education certainly benefits the poor, and most religious donations do as well. How do you arrive at the conclusion that 30% is the highest figure?

According to this press release (http://www.intuit.com/company/press_releases/1999/11-30.html), half of all donors give to charities related to the poor. And most of those donors give more money than average.

And it's also true that not all welfare dollars go to the poor. Actually, less than half are given to the poor; the rest is given to corporations. Exactly how much depends on which think tank you listen to. No, I didn't consider how much of the charitable dollars go to the poor, but neither did I consider how many welfare dollars go to the poor as opposed to corporations. There aren't any good statistics on either, although the figures I've just given you show that a greater proportion of charitable dollars than welfare dollars go to the poor so this balancing act actually tips the results in favor of government. Actually, if you'll look closely, I deliberately skewed the results in favor of government for that very reason and still the poor came out four times as good under private charities.

So, even if people increase their giving after the repeal of income tax to remain at the same percentage basis (which is arguable - most people give in absolute rather than percentage terms)

That's not what Giving USA concluded. Charitiable giving fluctuates with economic factors, but isn't affected at all by taxes. In fact, in the Inuit release I cited above, they found that 64% of all donors do so without regard for taxation. They give as a percentage of their take-home pay, and don't even report their donations!

shanek, I look forward to your response.

And thank you for finally giving this the attention it deserves.

[shanek]

Originally posted by Victor Danilchenko
And don't forget, there is a fundamental economic problem with charity -- it's extremely susceptible to free-rider condition. People may be willing to give a higher rate of their income to charitable purposes, provided everyone gives thusly -- hence taxation and redistribution.

Where did you get that from? The Inuit release I cited in the above post says otherwise.

[shanek]

Originally posted by Tmy
where do they get this "7% of paycheck to welfare" number?.

That's the average portion of your tax dollars that go to welfare, relative to overall income.

[shanek]

Originally posted by Michael Redman
There is, I think, absolutely no reason to think that people will give the same portion of their income, rather than the same amount of money, or some other amount altogether. Is there any evidence, anywhere, that even suggests that people will give away the same portion of income if they get to keep more of it?

That's what Giving USA concluded, based on their historical data that they have been collecting in the 69 years they've been in existance.

[Thanz]

Originally posted by shanek


I'll have to dig the source back up and get back to you on that one. If you choose to disregard it until I do, that's understandable.

I'll wait for your source. Also, it seems that you may be double counting this 66% in your estimates - you reduce the 7% once for overhaed, and then again later you say that it costs 66 cents to collect one dollar. Are you counting the same overhead twice?

I don't have powerpoint, and for some reason OpenOffice doesn't want to open it. I'll take it as read for the time being that they're the same figures, but just note I haven't seen the presentation yet.

The original source information is here: http://www.aafrc.org/giving/

From examining your figures quoted below, they match the 2002 report at the site above (I initially used the 2001 report when I first compiled these statistics). The 2001 report does in fact show 2.1% of giving. Here's an excerpt from the 2002 report:

"Research shows that giving is closely tied to the economy. Not surprisingly, giving in 2001 fits the pattern that we have seen during previous recessions... In six of the eight recession years since 1971, giving dropped by 1 to 5 percent when adjusted for inflation. Despite fears last fall that giving might decline precipitously, in fact, the change in giving in 2001 falls within the normal range for a recession year."

The 2001 report on page 6 said, "Total giving represented 2.1 percent of the Gross Domestic Product in 2001, close to the level from 2000 and 1999."

So my 2.1% figure is more reflective of the average, and your 1.8% figure is lower than average, because those statistics were collected during a recession.

The numbers are from the 2001 report. They have charts in the presentation for giving as a percentage of personal income and giving as a percentage of GDP. You are correct that 2.1 is the GDP figure for 2001. However, historically, this is at the high end according to the graph.

You posted "According to Giving USA, people give on average 2.1% of their take-home pay to charities, regardless of tax rate, deductions, etc.". This is why I used the graph for giving as a percentage of personal income. The chart for this statistic shows the 2001 figure of 1.8, which is fairly constant over the past 30 years. I submit that the chart for giving as a percentage of personal income is more accurate for what you are claiming.

Okay, I'll grant that Arts & Culture, Environment, and International Affairs have nothing to do with the poor. But all of the rest would seem at least some degree to go to people who would otherwise be helped by welfare.

Do you actually have the report? I would be interested in knowing what each category contains. It may be that agencies that directly help the poor are captured within a specific category.

As for the "disputed" categories (religion, health and education), here are my thoughts. Religion is obviously the toughest one to estimate, as I think we agree that money given to religion does get spent on the poor. It is a guess as to how much, however.

Health - This may have some direct help for the poor built in, but I assumed that the bulk of this giving is taken up by things like cancer and other disease research.

Education - again, this would have some poor help in there, but it is hard to say how much. Things like scholarships, bursaries, etc. do not go exclusively to the very poorest - many go to people not on welfare, but not wealthy either. Also included in this category would be donations to the ol' alma mater for a football stadium, etc.

That sounds very low to me. What are you basing it on? Giving to health and education certainly benefits the poor, and most religious donations do as well. How do you arrive at the conclusion that 30% is the highest figure?

Here is my thinking. I added up the six categories I mentioned, and it came to 72.6%. I realize that religion help the poor, so some of that giving is then spent on the poor, but we don't know how much. For education and health care, I included them for the reasons above and also because we are comparing it to welfare - which is direct money to the poor. Something that is an indirect benefit doesn't count in a direct comparison, as those idirect benefits will also benefit non-welfare recipients.

So, the other categories combined add up to 27.4%. Not all of the other categories consist of exclusively poor-helping agencies. People like PETA are included in there as well. So, balancing that not all of the other categories consist exclusively of helping the poor, but that religion definitely does help the poor, I came up with 30%. Again, a more detailed breakdown of the categories would really help.

According to this press release (http://www.intuit.com/company/press_releases/1999/11-30.html), half of all donors give to charities related to the poor. And most of those donors give more money than average.

I see the half give to the poor figure, but I don't see any support for your second sentence, that most of those give more than average. Where do you get this from?

Also, I think that the Giving USA numbers are probably more reliable, and they seem to conflict with Intuit.

And it's also true that not all welfare dollars go to the poor. Actually, less than half are given to the poor; the rest is given to corporations. Exactly how much depends on which think tank you listen to. No, I didn't consider how much of the charitable dollars go to the poor, but neither did I consider how many welfare dollars go to the poor as opposed to corporations. There aren't any good statistics on either, although the figures I've just given you show that a greater proportion of charitable dollars than welfare dollars go to the poor so this balancing act actually tips the results in favor of government. Actually, if you'll look closely, I deliberately skewed the results in favor of government for that very reason and still the poor came out four times as good under private charities.

I don't know what you mean when you say welfare dollars are given to corporations. For what?

Also, I don't think that your numbers were particularly skewed in favour of the government. You cut out half of the welfare recipients on the basis that they were unworthy, and declared that charities weed these unworthy candidates out. I haven't seen any support for these assertions.


That's not what Giving USA concluded. Charitiable giving fluctuates with economic factors, but isn't affected at all by taxes. In fact, in the Inuit release I cited above, they found that 64% of all donors do so without regard for taxation. They give as a percentage of their take-home pay, and don't even report their donations!

You are missing my point here a little bit. I do not dispute that giving as a percentage of personal income has remained constant over the past 30 years. However, in all of those years, people were subject to income tax. Your assumption is that with the repeal of tax, the giving percentage will remain the same. In order for this to happen, the actual amounts given have to rise. I don't think that the data directly supports this.

Lets give an easy example. Bob makes $100,000 a year, and pays about half of it in taxes, leaving $50,000. Out of that $50,000, he gives about $1000 to various charities. Your assumption is that once income tax is repealed, Bob will now give about $2000. This is an increase in the actual dollars. You assume that Bob will think in percentage terms, I assume that Bob will think in dollar terms. I am not sure that Bob's giving in actual dollars will automatically increase.

And thank you for finally giving this the attention it deserves.

You're welcome. I thought about posting this in one of the other threads, but I think I have derailed enough threads in my discussions with you. :)

[Victor Danilchenko]

shanek

Where did you get that from?A text on economic theory I am currently reading.

The Inuit release I cited in the above post says otherwise.First of all, I didn't see anything in the report you referenced that would contradict the supposition that people would be willing to give more, provided they could avoid others' free-riding. Secondly, the report speaks about a survey -- and not just a survey (which are highly susceptible to selection bias), but a survey by a tax preparation software company, which further restricts the sample to the population of people who use TurboTax, which sample has obvious differences from the population.

Note also that that release notes the charitable donations to decrease at lean economic times -- which are the times when such donations are needed the most.

[shanek]

Originally posted by Thanz
I'll wait for your source. Also, it seems that you may be double counting this 66% in your estimates - you reduce the 7% once for overhaed, and then again later you say that it costs 66 cents to collect one dollar. Are you counting the same overhead twice?

I'll get back to you on that one as well when I dig it back up. There were two 66% figures, one was the tax collection, the other was administrative overhead in hiring bureaucrats to manage welfare etc.

The numbers are from the 2001 report.

Could you post the chart? I'm still having trouble getting it loaded into OpenOffice.

You are correct that 2.1 is the GDP figure for 2001. However, historically, this is at the high end according to the graph.

In the text, they said this was on par with previous years.

Do you actually have the report?

No, just a summary of it.

I would be interested in knowing what each category contains. It may be that agencies that directly help the poor are captured within a specific category.

That I don't know. I haven't been able to find any specific figures anywhere on giving for "the poor," because "the poor" covers a lot of different people and a lot of different services.

Health - This may have some direct help for the poor built in, but I assumed that the bulk of this giving is taken up by things like cancer and other disease research.

Maybe, but a lot of it is also taken up by grants and donations to not-for-profit hospitals and clinics.

Again, a more detailed breakdown of the categories would really help.

And believe me, if I had one, I would present it.

I see the half give to the poor figure, but I don't see any support for your second sentence, that most of those give more than average. Where do you get this from?

Sorry, that was from a different source. The New Profit Almanac in Brief: Facts and Figures on the Independent Sector (Washington, 2001). Basically, the poor are more likely to give to charities that help the poor and they tend to give a greater portion of their income. The rich tend to give to the arts etc. (Apparently, the middle class are selfish wankers, because their giving rate is abysmal!)

Also, I think that the Giving USA numbers are probably more reliable, and they seem to conflict with Intuit.

Except that you've admitted that your conclusions from the Giving USA figures are speculative. I think the Intuit figures are easily within that reach.

I don't know what you mean when you say welfare dollars are given to corporations. For what?

Ostensibly for "administrative assistance" with welfare cases. In reality, it's pork.

Also, I don't think that your numbers were particularly skewed in favour of the government. You cut out half of the welfare recipients on the basis that they were unworthy, and declared that charities weed these unworthy candidates out.

I was basing this figure on the experience from Ohio, whereupon after deciding to put welfare recipients to work 80% went out and found am unsubsidized job instead, and when Wisconsin did something similar it was 71%. (Source: "Welfare Miracle," Executive Alert, May/June, 1997) The 50% figure was to allow for room for viariance in other states and, again, to try and skew the figures in the government's favor.

You are missing my point here a little bit. I do not dispute that giving as a percentage of personal income has remained constant over the past 30 years.

It's the percentage of take-home pay, actually. The more people are taxed, the less overall they give to charities. That's the important point. And that proportion is the same regardless of the tax level.

You assume that Bob will think in percentage terms, I assume that Bob will think in dollar terms. I am not sure that Bob's giving in actual dollars will automatically increase.

Again, the findings of Giving USA are that it will increase as Bob's take-home pay increases. When people have more money overall, they generally give more to charity.

[shanek]

Originally posted by Victor Danilchenko
A text on economic theory I am currently reading.

Title? Author? Edition?

First of all, I didn't see anything in the report you referenced that would contradict the supposition that people would be willing to give more, provided they could avoid others' free-riding. Secondly, the report speaks about a survey -- and not just a survey (which are highly susceptible to selection bias), but a survey by a tax preparation software company, which further restricts the sample to the population of people who use TurboTax, which sample has obvious differences from the population.

Well, 1) it coincides with the findings of Giving, USA, and 2) you're welcome to post better figures if you can find them.

Note also that that release notes the charitable donations to decrease at lean economic times

Well, so do tax revenues.

[Victor Danilchenko]

shanek

Title? Author? Edition?"The Economics of the Welfare State", by Nicholas Barr, 1st edition.

Well, 1) it coincides with the findings of Giving, USA,But neither finding disputes the hypothesis I advanced, about the influence of the free-rider problem.

Well, so do tax revenues.true -- but the key difference is that government can engage in deficit spendings during recessions and re-balance the budget during booms. Have you ever heard of any signigificant charitable giving from loans? Nobody borrows money to give to charities, AFAIK. Thus, the government is the only source of poverty relief that can prosecute its function fully at the time when such fiunction is needed the most.

[LW]

Yesterday I started to wonder about the 1.8% (or 2.1%) figure. Is it an average over all people or only over those people who give money to charities?

[shanek]

Originally posted by Victor Danilchenko
"The Economics of the Welfare State", by Nicholas Barr, 1st edition.

I'm familiar with it. Barr has been largely criticized by economists for his biases in favor of welfare. Take it with the appropriate salt grains. Check out Melberg, Hans O. (1997), Justifying the welfare state : Biased but useful (Review of Barr). It's mostly good, but Barr suffers from the same false dichotomy that many here make: That the alternative to a government solution is no solution at all.

true -- but the key difference is that government can engage in deficit spendings during recessions and re-balance the budget during booms.

Government is not the only entity that can do this. Charities do take out loans during slumps to pay back during better times, although they don't like to. I've been involved with several, and they do exactly that. Afterwards they step up their fundraising efforts to clear the debt as quickly as possible.

[shanek]

Originally posted by LW
Yesterday I started to wonder about the 1.8% (or 2.1%) figure. Is it an average over all people or only over those people who give money to charities?

Over all wage earners.

[LW]

Originally posted by shanek


Over all wage earners.

Thanks for the answer.

[Thanz]

Originally posted by shanek


Could you post the chart? I'm still having trouble getting it loaded into OpenOffice.

I don't know how to post the individual slides. The presentation comes up in my browser as one document. But, if it helps, the chart is a graph showing the level over time, with points marked every 5 years.

Here are the numbers for giving as a percentage of GDP:
1971: 2.1
1976: 1.7
1981: 1.8
1986: 1.9
1991: 1.8
1996: 1.8
2001: 2.1

Here are the numbers for giving as a percentage of personal income:

1971: 1.9
1976: 1.8
1981: 1.8
1986: 1.8
1991: 1.7
1996: 1.6
2001: 1.8

Maybe, but a lot of it is also taken up by grants and donations to not-for-profit hospitals and clinics.

With government health care here, I don't have much experience with these, so I just don't know what the breakdown would be between specific disease foundations like the Cancer Society or these clinics.

Sorry, that was from a different source. The New Profit Almanac in Brief: Facts and Figures on the Independent Sector (Washington, 2001). Basically, the poor are more likely to give to charities that help the poor and they tend to give a greater portion of their income. The rich tend to give to the arts etc. (Apparently, the middle class are selfish wankers, because their giving rate is abysmal!)

Actually, this tends to support my position. First, while the poor may give more as a percentage, the actual dollars are lower (less income to take the percentage from). Next, I would suggest that a typical carreer path involves increases in income as one gets older. So, if we have a working class person giving X to the poor, he then moves into the middle class - and still gives the same X to the poor. His income has risen, but not his actual dollar donation, which leads to low RATES of donations from the middle class. Also, if the rich tend to give more to the arts, this obviously is not good for the poor.

As the tax system is at least partially progressive, the middle class and the rich tend to pay a lot more in tax (both in terms of dollars and rates) which of course means that more welfare dollars come from them - also in terms of dollars and rates. The tax system therefore redistributes more wealth from the rich to the poor than is currently being done voluntarily. I think that I have a good idea of what you think about redistribution of wealth, but if we are concerned with the state of the poor then the more redistribution the better.

Except that you've admitted that your conclusions from the Giving USA figures are speculative. I think the Intuit figures are easily within that reach.

Well, without more information they have to be speculative. But the two seem to be measuring different things. Giving USA is measuring the dollar value of donations, while intuit is measuring the number of donations. It is quite possible that the 50% of donations to the poor (which come mostly from the poor) only add up to 30% of the actual dollars donated.

Ostensibly for "administrative assistance" with welfare cases. In reality, it's pork.

Really know nothing about this. Any more info or a link?

I was basing this figure on the experience from Ohio, whereupon after deciding to put welfare recipients to work 80% went out and found am unsubsidized job instead, and when Wisconsin did something similar it was 71%. (Source: "Welfare Miracle," Executive Alert, May/June, 1997) The 50% figure was to allow for room for viariance in other states and, again, to try and skew the figures in the government's favor.

Do you know if any of this is online? I'd like to read it before I comment too much. But I can imagine a scenario where someone who is on welfare then gets a job when forced, but is actually worse off.

For example - single mother, 3 kids, deadbeat dad. Collects welfare and barely scrapes by. Could probably get a job that would pay more than welfare, but not so much more that it would cover the cost of daycare. Welfare reform says if you are able bodied, you have to do something for the welfare. If she is going to be forced to work (and put kids in daycare) she may as well get as much as she can to try and stay afloat, so she takes the job that isn't good enough, but better than welfare. She is worse off (as are the kids) but this is a "success".

Now, I haven't read the reports so I don't know how applicable this is. But I don't think it is that far fetched.

[Victor Danilchenko]

shanek

I'm familiar with it. Barr has been largely criticized by economists for his biases in favor of welfare. Take it with the appropriate salt grains.Always.

Check out Melberg, Hans O. (1997), Justifying the welfare state : Biased but useful (Review of Barr). It's mostly good, but Barr suffers from the same false dichotomy that many here make: That the alternative to a government solution is no solution at all.Actually, that's not quite true. He repeatedly says that market can resolve most problems, and for most others, government actually providing the service is not the appropriate solution; and he also repeatedly sayd that the common "government should provide X because everyone needs X" argument is unsound. What he leaves out is that his work is purely theoretical, thus assuming fully selfishly rational consumers -- i.e. competent economic agents. Many of the non-government solutions to social problems are due to consumers actually not being selfishly rational.

Now Barr does advocate wealth transfer measures based on "social justice" criteria; but he admits that the use of "social justice" is a purely ideological non-economic factor, and Barr is very careful to separate economic arguments from ideological ones. Thus you can follow his economic arguments on their own merit, and use or leave his ideological ones as needed.

So yes, he presents biased arguments, but he admits his own biases and clearly delineates them.

Government is not the only entity that can do this. Charities do take out loans during slumps to pay back during better times, although they don't like to.Exactly. they don't like to; and they do so at a lower rate than would be needed to maintain their pre-recession level of service. In this regard, government can do something charities can't (in addition to being able to reach far more people that private charities).

[shanek]

Originally posted by Thanz
Well, without more information they have to be speculative.

Absolutely, and as I said that's why I leaned towards the government's side in this. I was being very generous towards the welfare state, and the poor still came out better without it.

But the two seem to be measuring different things. Giving USA is measuring the dollar value of donations, while intuit is measuring the number of donations. It is quite possible that the 50% of donations to the poor (which come mostly from the poor) only add up to 30% of the actual dollars donated.

And it's equally possible it adds up to 70%. Statistically, the more you move from 50% in either direction the less likely you're going to be right.

Really know nothing about this. Any more info or a link?

Overall, no. You kind of have to look at this thing case by case. For example, the 1998 Flood Releif Act for flood victims in the Red River Valley (HR 1469, the Emergency Supplemental Appropriations Bill), which gave $500,000 to renovate the Paramount Theatre (in Ashland, Kentucky), $3,000,000 to government agents in Odgen, Utah to fight terrorism, $133,600 to the children of deceased Texas politician Frank Tejeda, $33,500,000 to the National Botanical Garden, $928,000,000 in additional veterans' benefits, $2,000,000 for the establishment of a Law Enforcement Commission, $4,796,000 to landowners in Oregon and California, on and on and on... but not one penny to actual flood victims!!!

It's how the government operates. Any time they give out money, there's all sorts of ways they have of funelling money to politically-connected corporations and groups.

Do you know if any of this is online?

I didn't see it in a Google search, sorry.

[Mahatma Kane Jeeves]

HR 1469 (http://thomas.loc.gov/cgi-bin/query/z?c105:H.R.1469:)
Federal Emergency Management Agency

disaster relief

For an additional amount for `Disaster relief', $3,300,000,000, to remain available until expended...
FEMA (http://www.fema.gov/about/recover.shtm) gives out loans and grants to disaster victims.

[Thanz]

Originally posted by shanek


Absolutely, and as I said that's why I leaned towards the government's side in this. I was being very generous towards the welfare state, and the poor still came out better without it.

Well, I'll have to wait until you provide your sources on the government numbers, especially the discounts, but I don't think that you did lean towards the government side. Your discounts that involve getting the number from 7% to 0.5% seem quite high. You also failed to take into account any discounts on the private charity side.

And it's equally possible it adds up to 70%. Statistically, the more you move from 50% in either direction the less likely you're going to be right.

No, it is not equally possible that it adds up to 70% if you put any stock at all in the Giving USA breakdowns. Also, basic math tells us that the poor will give less in actual dollars than the rich, even if they give more as a proportion. So, I submit that it is far more likely that the number is less than 50%.

Also, consider that your position is that private charities would pick up the slack created by the removal of the welfare system. Many charities, such as the not for profit clinics and hospitals, will serve both welfare recipients and non-welfare recipients. These clinics that are already serving the community will not be replacing any benefits that are now conferred by welfare. Welfare is for the basics - food, shelter, clothing, etc. Only those agencies that provide these for the poor will be able to pick up any slack, and I would suggest that they receive much less than 50% of the money donated.

But, even if we use the figure that 50% of the money would go to these organiztions, welfare + current help is still better than the agencies could provide post income tax repeal, even using all of your government discounts.

Overall, no. You kind of have to look at this thing case by case. For example, the 1998 Flood Releif Act for flood victims in the Red River Valley (HR 1469, the Emergency Supplemental Appropriations Bill), which gave $500,000 to renovate the Paramount Theatre (in Ashland, Kentucky), $3,000,000 to government agents in Odgen, Utah to fight terrorism, $133,600 to the children of deceased Texas politician Frank Tejeda, $33,500,000 to the National Botanical Garden, $928,000,000 in additional veterans' benefits, $2,000,000 for the establishment of a Law Enforcement Commission, $4,796,000 to landowners in Oregon and California, on and on and on... but not one penny to actual flood victims!!!

It's how the government operates. Any time they give out money, there's all sorts of ways they have of funelling money to politically-connected corporations and groups.

Interesting anecdote, but what does it have to do with welfare? Because some special relief bill got porked up, we are to assume that the ongoing program of welfare is similarly porked? This doesn't follow logically.

[shanek]

Originally posted by Mahatma Kane Jeeves
HR 1469 (http://thomas.loc.gov/cgi-bin/query/z?c105:H.R.1469:)

FEMA (http://www.fema.gov/about/recover.shtm) gives out loans and grants to disaster victims.

Oops, missed that, thanks. It's still a drop in the bucket compared to the entire bill, though.

[shanek]

Originally posted by Thanz
Well, I'll have to wait until you provide your sources on the government numbers, especially the discounts, but I don't think that you did lean towards the government side. Your discounts that involve getting the number from 7% to 0.5% seem quite high. You also failed to take into account any discounts on the private charity side.

Because, as near as I can tell, there aren't any that significantly affect donations. I did count the one-third as being lost in overhead (and that's an extreme example; most charities couldn't get donations from people at that rate), and that was why that one 66% figure only but the value by half instead of two-thirds.

(By the way, I'm still backtracking to find the sources. Bear with me, I've been busy with a lot of other things lately.)

No, it is not equally possible that it adds up to 70% if you put any stock at all in the Giving USA breakdowns.

Except that we were considering the Intuit figures, not hte Giving USA figures. And as I showed, the Giving USA figures could easily be within the 50% range.

Also, basic math tells us that the poor will give less in actual dollars than the rich, even if they give more as a proportion.

But there are also a LOT more poor people than rich!

Also, consider that your position is that private charities would pick up the slack created by the removal of the welfare system. Many charities, such as the not for profit clinics and hospitals, will serve both welfare recipients and non-welfare recipients.

Of course. But they're already serving largely the same amount of non-welfare recipients now as they would be if we got rid of welfare. The only additional money they'd really need is to cover the influx of previous welfare recipients.

There are also other things we can do in this regard, like getting rid of a lot of these health care regulations that put a lot of free clinics and charity hospitals out of business in the first place.

Interesting anecdote, but what does it have to do with welfare?

You asked how government misappropriates a lot of its money. I provided an example. This is true of flood relief, welfare, and any other government program.

There are plenty of other examples. Just look over thomas.loc.gov at pretty much any spending bill.

[Thanz]

Originally posted by shanek


Because, as near as I can tell, there aren't any that significantly affect donations. I did count the one-third as being lost in overhead (and that's an extreme example; most charities couldn't get donations from people at that rate), and that was why that one 66% figure only but the value by half instead of two-thirds.

What you have failed to do, as I pointed out in my first post, is discount the total giving figure as not all of that giving goes to organizations that help the poor. Certainly, not all of it goes to organizations that help the poor with the basics like food, clothing and shelter. Also note that in my calculations, I included NO discount for charity overhead, and showed that the poor are still better off with welfare + charities than chariies alone.

(By the way, I'm still backtracking to find the sources. Bear with me, I've been busy with a lot of other things lately.)

No problem. It's not like were on a deadline, here.

Except that we were considering the Intuit figures, not hte Giving USA figures. And as I showed, the Giving USA figures could easily be within the 50% range.

I was trying to integrate the two, as they measure different things. Intuit was reporting on the number of donations (not dollar amounts) and Giving USA reports in terms of actual dollars donated. So, I was pointing out that half of the donations, in number, are likely to represent less than half the amount donated in dollars when we consider that most of those donations come from the poor rather than the rich.

But there are also a LOT more poor people than rich!

True, but so what? The intuit numbers were showing that half the donations in number (across all people) go to the poor. Whether there are more poor than rich doesn't make a difference if we already know the numbers of donations and the proportions.

Quick example: Let's say there were 100 charitable donations to all causes. We have 6o donations from the poor, 30 from the middle class, and 10 from the rich. Intuit tells us that 50% of donations go to the poor. In our example, that's 50 donations. The other source said that most of those 50 donations will come from other poor people. So lets say 40 donations come from the poor, 7 from the middle class and 3 from the rich.

I am saying that the 40 poor donations, 7 middle class donations and 3 rich donations for the poor are likely to be less, in actual dollars, than 20 poor donations, 23 middle class donations and 7 rich donations to all other causes, because the pool of available money in the donations to the poor group is much smaller than the pool available to the other causes group.

You asked how government misappropriates a lot of its money. I provided an example. This is true of flood relief, welfare, and any other government program.

No, I asked how corporations were given welfare money specifically. I don't really care how else the government wastes money - it is irrelevant to the discussion. What we are concerned with here is the welfare system vs. private charites, so I only care about your claim that welfare money (specifically) goes to corporations.

[Thanz]

bump for shanek. Still waiting for answers, don't want thread to get too buried.

[shanek]

Originally posted by Thanz
bump for shanek. Still waiting for answers, don't want thread to get too buried.

Thanks... Things have gotten hectic here, and I haven't had time to do much digging. Also, I'm going out of town on business next week. Might be awhile.

[Thanz]

Originally posted by shanek


Thanks... Things have gotten hectic here, and I haven't had time to do much digging. Also, I'm going out of town on business next week. Might be awhile.

Hey, no problem. I'm more interested in waiting for an accurate answer than something you can scrounge together in 5 hectic minutes.

Have a safe trip.

[shanek]

Just bumping to let everyone know I haven't forgotten about this. I'm finding that it's easier to find new sources than it is to dig up old ones. So what I'll probably do is redo the figures with new sources. But work and family obligations aren't leaving me with much time, so it'll have to wait awhile longer. I'll get it together eventually (and this time I'll keep a personal copy so this won't happen again!).

[Shane Costello]

Originally posted by Victor Danilchenko:
In fact, poverty existed and was extremely harmful before government intervention -- consider UK poor-house laws for example, where a basic (and rather inhumane) destitution relief infrastructure was instituted in during the industrial revolution, to address the rampant problem of umeployment, poverty, and deprivation.

Problems with unemployment, poverty and deprivation still exist in the UK and Ireland (part of the UK during the workhouse era) in spite of government intervention. Indeed the argument can be made that government intervention has exacerbated unemployment, poverty and deprivation. In Ireland the worst examples of deprivation are seen in government housing projects, which were populated by people from inner city slums. While the slum areas were poverty ridden and deprived, they were age old communities in their own right and retained a social fabric. This was destroyed with the advent of the housing developments, so that poverty translated itself into increased levels of crime, substance abuse and other deprivation.

It should also be pointed out that conditions on the UK consistently improved throughout the 19th century without very much in the way of government intervention. Immigration played a major role, but so to did increased industrialisation, innovation and wealth. Now I'm not saying we should make a direct comparison with conditions today, but I'm unconvinced that government intervention or welfarism is the only way forward.