A very good and underappreciated site is Put a Number on It. Here, from a recent post on inequality, is not something many are familiar with:
Transfers comprise social security and the rest of welfare. I gave $5,700 to every person over 65 and spread the rest based on number of children and distance from the poverty line. This simplification gets the model close to the actual numbers (average transfers are only $6,700 per person, so being off isn’t a big deal) but the distribution method doesn’t accurately mirror how the government actually spreads money around to the needy.
The reason for that is that the more I studied the actual distribution of transfers in the US, the more gin and tonics I had to drink to keep my sanity. Not only is the assignment of transfers so arbitrarily complex as to be unmodelable, but it seems designed mostly to benefit lower-middle class people (21-50 percentile) at the expense of actual poor people (1-15). The third quintile by income (41-60) receive twice as much in government transfers as the bottom quintile (page 6).The bottom 15 are almost all out of the labor force (🎅), mostly unmarried (🚶, 💔), with no capability of going to college or buying a house. Policies like minimum wage, earned income tax credit, marriage tax breaks, mortgage tax breaks and college subsidies don’t help them one cent. Every policy that doesn’t help the poor ends up hurting the poor, by increasing the gap between them and the other 85%, and by blocking their social mobility and reducing their purchasing power. One of my upcoming posts will basically be a long rant about how American policies and politics are stacked against the bottom 15% to a depressing degree.
The cynic may respond that the votes of the bottom 15% don’t mean much. This election year seems to provide some fuel for that fire.
