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Konstantin's avatar

One thing I've noticed is when a person in poverty gets a windfall, there is an insane amount of pressure put upon them. People in poverty are socially connected to other people in poverty, and chances are someone in your social circle can exert enough social pressure to get your money. Think "the friend who I've known for decades needs that $500 to help pay for his mother's medical treatment, and he promises he'll pay me back." Given that there is no way you are keeping the money for any length of time due to this social pressure, a rational response is to spend it as quickly as possible so you get at least some benefit from it.

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David Gross's avatar

A couple of off-the-cuff thoughts:

- An awareness-of-needs issue might be sticker shock. If you've been out of the housing market for a while you might have an outdated idea of what first-month's-rent-plus-deposit amounts to. When you get your $2000 and think "now's my chance!" and then go hunting for an apartment, only to learn that everything is still out of your reach, disappointment sets in: "Even with $2000 falling from the sky, I still can't get a place."

- One difference I suspect you'd find between poverty in a place like the U.S. with widespread wealth, and poverty in a place with endemic poverty, is that extremely poor people in the U.S. are more likely to be those with cognitive disabilities and severe mental illnesses. This makes it harder for them to do long-term planning or cost/benefit analysis, to avoid scams & leeches, etc. This could make it harder for programs like this to succeed here.

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