In Policy, You Have To Choose The Error You're Going To Commit
In Logic, there are recognized two types of error:
- Type I errors - The False Positive - is when you think something meets criteria that it does not.
- Type II errors - The False Negative - is when you think something that meets the criteria, fails them.
No matter how well you think you've designed your policy or program, reality will laugh in your face and show you a whole menu of unintended consequences and mistakes. So when designing policy, it is important to control which kind of error you commit, because the consequences of policy errors can often be quite severe. The extreme example being criminal justice. In the United States, defendants are presumed innocent until proven - beyond the shadow of a reasonable doubt - guilty as determined by a unanimous decision of 12 of their fellow citizens. This is because a Type 1 error could result in the imprisonment - or death - of an innocent person. As a societal value, we would prefer to let a guilty person go (Type 2 error) than execute an innocent.
So when it comes to economic stimulus and relief programs, your options basically boil down to:
- Give people who don't need the help, a little help.
- Let people who desperately need help suffer whatever consequences (up to and including starvation, death, or forced criminality) befall them.
Beyond just a matter of 'waste a few dollars' vs. 'ruin someone's life' there's also the numbers involved. The number of rich people is profoundly smaller than the number of poor people. Even if every single wealthy person received money they didn't need, the cost of that error would be tiny compared to the cost of the program. Income testing is super easy because, as other answers have noted, the data is already there, just ask the IRS. But going deeper than that requires auditors and accountants to collect and analyze data - these people don't do this for free, and so these kinds of fact finding are fairly expensive. A $1,000 check to a few thousand rich people is still less expensive than just the payroll costs for the people who would otherwise be able to detect and disqualify those few thousand rich people.
One of the biggest challenges in public policy is learning to live with the fact that a lot of things we find philosophically or socially questionable are simply far less expensive, and therefore actually morally superior choices because we can spend more resources doing other important work, than what we would otherwise prefer.
Perfect is the enemy of good.