GUARANTEED FAILURE

Cash transfer programs are gaining steam, but our current bureaucracy is obscuring their potential.

- Mark Betancourt

THE COVID-19 pandemic's stimulus checks and tax credits helped mainstream the idea that government could help unwealthy people through hard times by simply giving them cash—without conditions like work requirements or stringent income limits. Since then, the push for guaranteed income for the poorest Americans, for whom wage stagnation, inequality, and the disappearance of blue-collar jobs continues as a plodding catastrophe, has bloomed into a nationwide movement. Dozens of direct cash transfer pilots have sprung up, from rural Oregon to Chicago and South Texas, spearheaded by nonprofits, city governments, and even states.

There's no shortage of evidence that no-strings-attached cash helps. Research has shown that, with extra money, participants buy necessities, increase savings, or even start businesses. They have an easier time holding onto housing and fleeing domestic violence.

Advocates for cash transfers argue they could be more efficient than aid programs that waste money administering rules that supposedly protect the government from being hoodwinked by the “undeserving” poor—like food stamps that can buy cold rotisserie chickens, but not hot ones. The punitive mindset that makes traditional welfare systems so unwieldy is also the reason guaranteed income hasn't gained more of a foothold. Because even a slight rise in income can disqualify someone from receiving a wide array of public benefits, poor households considering enrolling in a GI program are often forced to choose between a cushion of cash or other income, health, or housing benefits—they can't have both. Not only can that leave desperate people locked out of extra help, it has made the purported administrative advantages of the GI model harder to prove.