Giving Katrina Victims $2000 Debit Cards - Bad Idea

terry1156 · #1 (**permalink**) 09-07-2005, 06:12 PM

I just read this at <A HREF="http://www.usatoday.com/news/washington/2005-09-07-katrina-debit_x.htm">usatoday</A>:

<i>The federal government plans to hand out debit cards worth $2,000 each to families displaced by Hurricane Katrina.

Homeland Security Department Secretary Michael Chertoff, under fire for his agency's response to the disaster, held a conference call with governors of states with evacuees and described the plan. While many details remained to be worked out, the plan was to quickly begin distributing the cards, starting with people in major evacuation centers such as the Houston Astrodome.</i>

If they are going to give the people $2000 in debit cards, are they going to also educate them on how to best use the money? Of course not. While it will be helpful to those who know how to use it correctly in this situation, it's going to be wasted by a lot of families. Furthermore, giving it out as cash is a recipe for fraud that's going to end up costing taxpayers millions.

Why don't they give immediate credits to the families worth $2000 to purchase necessities including food, clothing and housing. There would be less fraud and the money will be spend on the necessities the people need.

It seems like since the government screwed up in the helping area, they are trying to compensate with something that looks good in the media, but is going to be a huge waste of money.

Now if they agreed to also educate the people on how they should use the money (yeah, right), then that would be a different story.

meaghanchan · #2 (**permalink**) 09-07-2005, 06:36 PM

I disagree. I think that most of the people in that situation are going to be spending the money on things they need immediately. $2000, in a situation where you have NOTHING, doesn't go that far. A couple sets of clothes. Some food. A couple months of rent, if you can get in a place where you don't have to sign a lease, while you're waiting for your home to be livable again-- or while you try to find a job where you are. It would be a different matter if it were $10,000... But I don't think anyone down there is going to say, "$2000! I think I'll buy a fur coat!". Cash (or debit cards) can be quickly distributed, and is good everywhere, unlike food/clothing/housing credits, which I think would become very complicated very quickly.

I could be proven to be wrong, though.

Tree0164 · #3 (**permalink**) 09-08-2005, 03:00 AM

Terry
I hope you are wrong.

$2000 doesn't go far. However hopefully these people will use it the right way-setting up temporary house, purchasing clothing, and neccessaries.

terry1156 · #4 (**permalink**) 09-08-2005, 04:09 AM

Don't get me wrong - I think that some will use it responsibly. I just see a lot of abuse coming. Several thousand people all together in close quarters and everyone knows their neighbor has $2000 sitting in their pocket. I'm assuming they are going to get basically gift cards so that if they are stolen or misplaced, there is no way to stop payment. I could be wrong there, but that was my impression.

I also see a lot more fraudsters trying to claim them - $2000 in cash is a lot more appealing than housing credits. I hope I'm wrong too.

Snoopy2645 · #5 (**permalink**) 09-08-2005, 07:37 PM

I think they should get something for the kids too the way I understand it is $2000 will be per adult what if its a single mom with 3 kids or more you know. I really feel sorry for the kids & babies in this situation

terry1156 · #6 (**permalink**) 09-08-2005, 07:50 PM

I've changed my opinion. My gutt reaction was that it was a bad idea, but obviously these people need the money quickly and other options like credits would take too much time. I still see room for abuse, but helping these people out is the main priority at the moment. I just hope this isn't the extent of the help.

PrincessPerky · #7 (**permalink**) 09-09-2005, 05:06 AM

I see lots of room for abuse, intentional and accidental. But yeah they do need help

.

I think we are stuck with the hope, hope that most will use it as wisely as possible, hope that few will try to cheat when they don't need the money, and hope that there is something to buy with that 2000 where the needy are (I imagine the stores are running rather low if not empty? - the local grocery store here gets shipments practically daily, but they arn't open in the middle of town there, so no shipments)

Fern · #8 (**permalink**) 09-09-2005, 06:55 AM

Why would you think that adult people need "education" as to how to spend the money?

They're all adults and no doubt as educated as you or I.
Do people who win the lottery, get a raise or inherit money get an education? No.

I don't think anyone in this kind of stark situation needs educating. I do agree, tho, there is potential for fraud but it sounds like the mass housing with thousands under one roof is beginning to end, families are being dispersed and the opportunity to steal someone else's card will be reduced.

PrincessPerky · #9 (**permalink**) 09-10-2005, 04:51 AM

Based on that recent report Bruce put in I woiuld say being an adult is not really a guarantee of education regarding money.

Post about money education

But then adults are also much less likely to accept forced education, and more likely to seek it out (like comming to this site)

jmjj215 · #10 (**permalink**) 09-10-2005, 10:20 AM

Fern, I'm not sure what the demographic breakdown is of the evacuees - the media makes you believe it's all uneducated people who were on welfare previously. Those with money seemed to be able to get out okay. Those without, well, they were stuck. So if that really is the case, then some education would be helpful - not realistic - but helpful.

cercis · #11 (**permalink**) 09-10-2005, 03:35 PM

Jim, not all the people getting these cards were ones that didn't evacuate. Some of them are people who left but now have nowhere to go. They've exhausted their funds for staying in hotels, etc and just don't really have the money for an apartment (I'll bet it will be a long time before they get their deposits back from their apartments in the affected areas, if they do at all).

They're going to people who lost their jobs, etc. People who did have some savings, but not enough to start over completely.

retire@50 · #12 (**permalink**) 09-10-2005, 08:11 PM

On the news today it said that most of the debit cards went to the people in the Astrodome in Texas. So far they know of two people who used the cards to buy $800 handbags from Louis Vitton. It's hard when you hear a story like that not to extrapolate it to all people who got debit cards and think it's a waste.

I guess they've stopped the debit card program and now are giving checks or direct deposit to their checking accounts. I think that will be a safer way to make sure people keep the money, but you still can't make them spend it on true neccesities.

BillsGirl · #13 (**permalink**) 09-11-2005, 09:47 PM

What they spend it on is their own concern but $2000 vs losing EVERYTHING they have ever worked for and owned, pictures momentos things that can not ever be replaced.... I think it's nothing to what they desrve!

Fern · #14 (**permalink**) 09-12-2005, 01:37 PM

Well, it just sounded a bit condescending to say that poor people who have just lost everything need to be told how to spend the money. They may not know how to invest in the stock market or understand the concept of a reverse mortgage, but I'm sure they know they need shelter, food and medical care.