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One way to fight a coronavirus recession: $1k for every American

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Re: One way to fight a coronavirus recession: $1k for every American

#31

Post by fit2rule »

Gunax wrote: post #18
vearwhershuh wrote: post #13

This is how we should manage the money supply, and it should be monthly. Direct, debt free issuance of a citizens dividend to every US citizen. Coupled with a wind-down of the debt bubble. Maybe take Steve Keen's idea and require that a certain portion of the payment be used to extinguish any debts. Unfortunately whenever a president starts talking about this, he has a tendency to be shot.

Let's make it 10k per month, then we can all be wealthy.

IF everyone is wealthy, the prices go up, and everyone is poor again.

We can only afford Tesla's now, because rich people could afford them years ago. Same with all the other things we spend our money on ..

Re: One way to fight a coronavirus recession: $1k for every American

#32

Post by vkou »

leggomylibro wrote: post #29
tjr225 wrote: post #3

Am I way out of band or does that seem like a comically small amount of money for the average American? I live in an extremely low COL area and live well within my current means. Assuming my work dries up and I don't have any savings, 3k$ would buy me two months tops. Just to give you an idea of how cheaply I live: Mortgage is ~800$/mo, Car is a paid off 2006 Toyota Highlander, Student loan minimums of ~400$/mo, My w…

You can't live off of $1000/mo in most cities without making some real sacrifices, but a $1000 supplement would still be a huge help to people who live paycheck-to-paycheck and may not get paid for a few weeks. It'll buffer out what might otherwise turn into an inability to pay basic bills like food and medicine. After all, only 40% of Americans are able to cover an unexpected $1000 expense. That's the really soberin…

> but a $1000 supplement would be a huge help to people who live paycheck-to-paycheck and may not get paid for a few weeks.

There is zero reason to believe that the service and retail industry will be back to normal in a few weeks.

Re: One way to fight a coronavirus recession: $1k for every American

#33

Post by ntsplnkv2 »

PeterisP wrote: post #28
ntsplnkv2 wrote: post #21

Earlier quoted context omitted.

On point one, that's just the thing. If I got 1000$ right now from the government, I'd pay things that I'd already have been paying anyway, or I'd save it because the economy is bad. I'd imagine most people would do something similar.

> pay things that I'd already have been paying anyway That's kind of the point. With a nearly imminent lockdown, many people would not be able to pay for things that they have been paying all the time, and that will bankrupt companies and break the economy. A cash injection that allows you to pay for things that you're already paying for - and get the basic things you were already getting before - would be quite help…

It's a one time payment.

It just delays everything by a month.

I fail to see how this solves the problem.

Re: One way to fight a coronavirus recession: $1k for every American

#34

Post by vkou »

simonh wrote: post #14
vkou wrote: post #4

This is not going to help. The people who need the most help are the people who are going to be homeless in a month. 1k will buy them a second month. This thing will not blow over in two months. What would help, is for mortgage and rent payments to be suspended as long as the state of emergency lasts. Not deferred[1], suspended. When economic activity stops, we have to stop rent-seeking from bleeding everything out o…

Then what happens to the people who's income depends on those rent payments. I think an approach like this makes sense. The problem is immediate cash flow for people. This is cash flowing to people. It may not be enough, but it's moving in the right direction. We're not going to re-engineer the economy in the next few weeks.

> Then what happens to the people who's income depends on those rent payments.

Since they also won't need to pay rent or mortgage, they won't get kicked out of their homes, too. Which is about the most that people should expect when the economy grinds to a halt.

Otherwise, tough. We're in a state of emergency, that is preventing their tenants from getting paid. Just like their tenants, they'll have to deal with it.

> We're not going to re-engineer the economy in the next few weeks.

1. This is not going to blow over in a few weeks.

2. We sure as hell shouldn't empty the treasury into the pockets of landlords over a few weeks. They should not be the only people to walk out of this unscathed.

Suspending rents and mortgages is the only fair thing to do. It costs the state, and the taxpayers nothing, it puts everyone on an even footing, in terms of continuing to have a roof to sleep under, and it doesn't screw us six months down the road.

Re: One way to fight a coronavirus recession: $1k for every American

#35

Post by gwright »

tomp wrote: post #17

I've been railing against this idea as uniquely stupid for the past few days. 1. For people who are living "paycheck-to-paycheck", this won't even matter. How far does $1000 get you in the US? A better policy would be a general amnesty on rent and interest payments for a few months, and temporary free healthcare. 2. For industries where it's a demand shock (e.g. travel), no amount of helicopter money will restart the…

> rent and interest payment amnesty

These sorts of micro-management solutions seem like the wrong approach to me. It is very hard to target them to people who really need it. Some people will still have jobs and don't need the assistance, some people can weather a couple of months without income, some people are retired and are living off their savings already, etc.

It seems to me that some sort of unemployment benefit program on steroids would be better. But that doesn't help with people who are self-employed. Perhaps there could be a special program to allow self-employed to take advantage of unemployment programs?

> companies affected

I'm wary of assistance in this area because it is next to impossible to understand all the ramifications of the bailout and businesses are generally better positioned to figure out how to "survive" in the new environment. I'd go back to my first comment above and focus on assisting people not companies.

> supply shock

This one I really wouldn't worry about as the market is going to address these shortages quickly. In fact I'm more worried about the government imposed shutdowns creating problems for companies who are trying to address these shortages (parents not working because they have to stay at home with kids, e.g.).

Re: One way to fight a coronavirus recession: $1k for every American

#36

Post by tjr225 »

fortran77 wrote: post #30
tjr225 wrote: post #7

Earlier quoted context omitted.

That also seemed like a comically paltry move. I still have to make my payments, after all! In addition my wife and I have spent the last couple of years with two incomes wiping away our student debt on high incomes in Seattle - so the only loans I have left are pretty low interest. The only way I can see this working for everyone is to simply halt the economy altogether. No mortgages, no bills, free food, free medic…

Of course, suspend the payments through this crisis, but why should you not owe it?

What exactly are you trying to do here? Criticize my life choices? You don't know me or my decisions. What if I did exactly what you said but happened to fall in love with a wonderful woman who happened to have a bunch of student debt?

Why should _anyone_ to be expected to pay their student loans if all of the other sectors of the economy are going to shut down?

The biggest mistake I making here is even attempting to have a discussion with you. Bugger off.

Re: One way to fight a coronavirus recession: $1k for every American

#37

Post by Ididntdothis »

That seems pretty silly. Me and probably a lot of other people would just put it aside and save because we don’t need the money. And for the people in some industries who are at risk of losing their jobs this is laughably little money. In Germany there is a concept called “Kurzarbeit”. Companies reduce work hours and salaries across the board and unemployment insurance makes up for some of it. This way mass layoffs are avoided. That’s the way to go in my view.

But I guess the US will either do nothing or hand a lot of money over to the top income earners in the hope that they will “create ” jobs.

Re: One way to fight a coronavirus recession: $1k for every American

#38

Post by Jtsummers »

omgwtfbbqhihihi wrote: post #2

That will last a week at best

That depends on where you live. Prior to a recent move to a high COL area, it would've lasted me a month, with $50-100 to spare (rent, utilities, and food if I went for rice and beans and the cheapest meat I could find).

Cut out the optional services (streaming services) and fuel (not driving as much, $100/month fuel cost gets reduced to maybe $20 for the isolation month), and it can work in many parts of the country.

It probably wouldn't last long in San Francisco, New York, Seattle, and other high COL areas. And to make it last, you'd need roommates, which creates a hazard with regard to trying to create/enforce social distancing. But not every city or region has crazy high rent. Some places are still sane.

Re: One way to fight a coronavirus recession: $1k for every American

#39

Post by PeterisP »

paxys wrote: post #16

America's immediate priority needs to be public health, not the stock market. The economy will recover, dead people won't.

People living paycheck-to-paycheck with no savings will go to work while sick, hurt themselves and infect all their customers. Solving the simple issue of their income is a prerequisite for tackling the public health issues; and if you can't implement lockdowns and other restrictions because you haven't solved the financial logistics of how people will pay for their food, then the result will be dead people.

Re: One way to fight a coronavirus recession: $1k for every American

#40

Post by leggomylibro »

vkou wrote: post #32
leggomylibro wrote: post #29

Earlier quoted context omitted.

You can't live off of $1000/mo in most cities without making some real sacrifices, but a $1000 supplement would still be a huge help to people who live paycheck-to-paycheck and may not get paid for a few weeks. It'll buffer out what might otherwise turn into an inability to pay basic bills like food and medicine. After all, only 40% of Americans are able to cover an unexpected $1000 expense. That's the really soberin…

> but a $1000 supplement would be a huge help to people who live paycheck-to-paycheck and may not get paid for a few weeks. There is zero reason to believe that the service and retail industry will be back to normal in a few weeks.

Well, policymakers could re-asses at that point in time if they decided to take an action like this.

If you really believe that things will remain disrupted for a long time, it seems like you could see this as a great opportunity for a basic income experiment, huh?

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