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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

#161

Post by fao_ »

champagneben wrote: post #51
leggomylibro wrote: post #40

Earlier quoted context omitted.

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?

One of the interesting questions would be how much a basic income would affect people's willingness to work, and we would not be getting that out of this experiment. In fact, I can't imagine anything useful we'd be getting out of that experiment, except for its effects in similar very dramatic circumstances.

> I can't imagine anything useful we'd be getting out of that experiment

I uhhhh. People's ability to work and live is important. That's what we get out of it. People not starving or living in poverty is, surprisingly enough, pretty important to the economy and the ability to sell luxury goods. Regarding 'useful data':

https://www.inverse.com/article/53466-basic-income-canada-s-...

And articles from the institute that performed the study:

https://www.basicincomecanada.org/nearly_half_of_basic_incom...

https://www.basicincomecanada.org/ontario_government_defends...

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

#162

Post by Mountain_Skies »

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.

Whenever the current situation has subsided to the point where we are no longer asked to engage in social distancing, perhaps local governments should make it a priority to allow a bunch of festivals and other large public events to take place. This will create work for the service industry which will help bootstrap their sector back into motion and also give the public a sense of normalcy so they'll start going out again.

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

#163

Post by tootie »

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…

Demand-side stimulus, especially to middle- and lower-class citizens tends to have very high multipliers. The intent isn't simply to say "here's $1000 so you can live the high life" it's $300B worth of fresh aggregate demand to keep businesses in business that will turn into more $500B once it's finished circulating.

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

#164

Post by aeternum »

xyzzyz wrote: post #123
aeternum wrote: post #83

Earlier quoted context omitted.

QE already is #3. The Fed is printing money to purchase bonds/treasures/bad mortgages. The printing of money definitely needs to be balanced in order to stabilize inflation, but the fed is doing that. The only difference would be that instead of the Fed injecting the printed money through financial instrument purchases which benefit the top 5%, they would provide it to all citizens as a UBI.

Another difference would be that QE, as practiced by Fed in 2008-2014, would pay a basic income of around $150/month. Now, consider what inflationary impact would QE have if it was 6 times larger, and perpetuated indefinitely. Then remember that because of the way QE was structured, it had much smaller inflationary impact than directly printing that money and handing it over to government or people. While I'd like fo…

QE likely had a smaller inflationary impact simply because the printed money went only towards treasuries and financial instruments disproportionately benefiting the rich (top 5%). There's a strong argument that this is why it didn't show up in the consumer price index and we've also significantly increased wealth inequality.

12k / year for every american is likely too high. I think the Fed should still determine the amount of QE based on inflation and economic metrics, however that QE should be distributed via a UBI rather than used to purchase financial instruments.

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

#165

Post by zarkov99 »

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…

I think its likely this would turn into $1K per month for a while. And, yes, for some people it would make an enormous difference.

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

#166

Post by m0zg »

Mountain_Skies wrote: post #162
vkou wrote: post #32

Earlier quoted context omitted.

> 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.

Whenever the current situation has subsided to the point where we are no longer asked to engage in social distancing, perhaps local governments should make it a priority to allow a bunch of festivals and other large public events to take place. This will create work for the service industry which will help bootstrap their sector back into motion and also give the public a sense of normalcy so they'll start going out…

Terrible idea. Unless there's herd immunity, this will just restart the epidemic anew, this time in the people who managed to dodge the virus the first time. Social distancing can be lifted in those who recovered from the virus though, maybe they'll be able to attend.

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

#167

Post by throw0101a »

xyzzyz wrote: post #49
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.

> Direct, debt free issuance of a citizens dividend to every US citizen. Coupled with a wind-down of the debt bubble. There are three ways to make it possible: 1) issue government debt to pay for it 2) increase taxes to cover it 3) print money to cover it. Number 3) will cause significant inflation, so it will effectively be paid for by tax on cash savings. High inflation is really bad, it’s a terrible idea. 1) has t…

> ... 3) print money to cover it.

> Number 3) will cause significant inflation, so it will effectively be paid for by tax on cash savings.

Yeah, the same was said before QE was rolled about and it did not happen--as predicted Krugman and those that follow IS-LM models:

* https://krugman.blogs.nytimes.com/2015/02/12/qe-truthers/

* https://en.wikipedia.org/wiki/Zero_lower_bound

Stimulus now could be very useful, and 'helicopter money' is probably just as good as any other method:

* https://www.nytimes.com/2020/03/07/opinion/the-case-for-perm...

* https://archive.is/Z2TMK

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

#168

Post by staticassertion »

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 are correct. Especially given that expenses are hightened right now. People are stocking up all at once, which requires upfront money - something most of the country does not have.

1k is considerably less than even unemployment, which is also not enough for a huge portion of society. I would say 3k is probably the bare minimum for 1 month of self-isolation. Essentially expanding unemployment (just over 2k) to everyone.

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

#169

Post by BoiledCabbage »

xyzzyz wrote: post #119
BoiledCabbage wrote: post #94

Earlier quoted context omitted.

You act like these are wild approaches. But during this this current term we've already done #1 via the 1Trillion tax cuts to mostly the wealthy. Those (many of us on here) who won't use it for goods and services, but instead to further prop up your asset bubble of choice. Ie not improve the economy much, but make the appearance of improvement via higher asset pricess. Then we've done #3 via re-introducing QE via the…

> You act like these are wild approaches. But during this this current term we've already done #1 via the 1Trillion tax cuts to mostly the wealthy. $4T a year, required to pay for monthly basic income of $1k to all Americans is much wilder than $1T of tax not collected over 10 years, yes. The former number is 40 times larger than the latter. > Then we've done #3 via re-introducing QE via the fed. No, we've done only…

> $4T a year, required to pay for monthly basic income of $1k to all Americans is much wilder...

"one-time payment of $1,000 to every adult who is a U.S. citizen or a taxpaying U.S. resident, and $500 to every child who meets the same criteria."

You're arguing against something nobody proposed. Please compare the numbers with whats actually being proposed.

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

#170

Post by WC3w6pXxgGd »

NamTaf wrote: post #64
Gunax wrote: post #15

I too think this is silly. Everyone wants to use this disaster to achieve the policy goals they wanted anyway. Republicans want to use it as an excuse for tax cuts. Democrats want to expand public healthcare and benefits. Everyone is trying to attach riders for domestic violence victims or pork spending or whatever pet issue they have. And now the Ubi folks want this. Nothing changes. Same BS.

This is hardly a UBI. It's also been done before, for example in Australia during the GFC. The idea is to get money into the hands of people who will actually spend it - the poor will tend to go buy their kid a desperately needed new pair of school shoes, for example, whereas the rich will just throw it in with their other savings. Only one of those stimulates the economy in the short term.

"It's been done before" is not an argument.
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