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America’s Covid job-saving programme gave most of its cash to the rich

economist.com

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Re: America’s Covid job-saving programme gave most of its cash to the rich

#251

Post by eric_b »

dataflow wrote: post #239
eric_b wrote: post #225

Earlier quoted context omitted.

You have to be kidding me . This is your big experiment? "There are 175,000 24-year-olds in Gyeonggi, and for one year, each receives the equivalent of $220 in a locally negotiable currency per quarter via a credit card." So 1000 bucks a person for a year. COVID stimulus plus child tax credit went to millions of people... and even the smallest amounts were more than this experiment in SK. Like... what else ya got?

> This is your big experiment? No, it's the first more- controlled experiment (more controlled than a pandemic!) I could think of off the top of my head. I don't know how to argue this when you seem to have no regard for the idea of controlling for other variables. Nor for the manner (like frequency) in which the funds are distributed. Nor for anything that I can see, other than the sheer amount of money dumped into…

You sure like to be condescending. Every one of your replies to me starts with condescension. And I mean... my guy... I don't really think any of your comments are particularly compelling. I'm very aware of the state of UBI research, and I don't consider any of it to be very meaningful. I guess you do - that's great. But to completely discount the COVID stimulus is... cognitive dissonance.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#252

Post by mlyle »

wyager wrote: post #233
mlyle wrote: post #224

Earlier quoted context omitted.

> One would have to be extremely credible to believe the claim that UBI would remove deadweight loss. Throwing any kind of massive wrench in the market can safely be expected to introduce it. We already have the massive wrench in the form of benefits programs and EITC, etc. I say: restructure them to be UBI instead. Milton Friedman advocated for a negative income tax which is much like a UBI, and most economists agre…

I agree that UBI would be less distortive per dollar than what we have now, but unless there's a credibles strategy to make this happen, why bother discussing it? I suspect it's a pipe dream. Politics is a gang fight; any pretense of social optimization is just a thin veneer. Whose votes can you buy with the promise of UBI replacing extant welfare schemes? Every extant welfare scheme is a vote buying program which yo…

Even Yang proposed making UBI mutually contradictory with receiving other benefits.

> Every extant welfare scheme is a vote buying program which you're now nuking.

While some peoples' votes will be bought with welfare money, others will support it because they don't think it's OK to let the poor starve or don't want the poor to riot. E.g. me: I don't receive public assistance. I think welfare programs are necessary (though it's better if most of them are implemented in the form of a UBI).

Re: America’s Covid job-saving programme gave most of its cash to the rich

#253

Post by abakker »

hogrider wrote: post #143
hammock wrote: post #107

Devil's advocate: is this altogether a bad thing? Hear me out (thought experiment). COVID relief wasn't supposed to be welfare. Its purpose could be viewed as being not a safety net, but rather compensation for allowing the economy to be shut down. In that sense, it makes sense that much of the recompense goes to the people who were asked to shutter their businesses, put up signage and buy new equipment and reduce ca…

Sure, if you agree with socialism for the rich and for the rich only this was great just like 2008.

It is bad to keep citing 2008 money as if it were a handout. Much of the money was paid back with interest, and the government MADE money on those loans. Look up the “maiden lane” loans for an example.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#255

Post by JaimeThompson »

ChrisLomont wrote: post #186
hogrider wrote: post #143

Earlier quoted context omitted.

Sure, if you agree with socialism for the rich and for the rich only this was great just like 2008.

Citizens took home trillions this time around. The 2008 money was loans, that were paid back with interest. The citizens this time around got socialism (and related inflation). 2008 had neither.

Trillions?

Re: America’s Covid job-saving programme gave most of its cash to the rich

#257

Post by charvard »

I worked on a paper that showed that the "Paycheck Protection Program loans increased employment at small businesses by only 2%, implying a cost of $377,000 per job saved" in April 2020: https://opportunityinsights.org/wp-content/uploads/2020/05/t... It still hurts me to read. Over a third of a million, 7 times the average salary, to save a job during the pandemic under this plan

Re: America’s Covid job-saving programme gave most of its cash to the rich

#258

Post by wyager »

xyzzy123 wrote: post #242
wyager wrote: post #209

Earlier quoted context omitted.

Yes, for any given time preference there exist capital allocations with equilibrated marginal returns between consumption vs capital investment. I'd argue we're not in one of those allocations, and if we are it must be associated with an extremely high time preference, and UBI would make it worse.

I agree your statement is logically correct from a utilitarian standpoint. There's a little bit of "spherical cow" involved though. A more detailed model would recognise that R&D spend is not pure investment, and UBI would not be pure consumption. Whether non-zero UBI today would good policy or not depends on an enormous number of facts about the world that I think it would be very difficult to come to an agreement o…

I think we mostly agree except on our level of optimism about how UBI will realistically be spent. I would argue that my pessimism is extremely well-founded because present material conditions are an extremely strong (if noisy) indicator of an individual's capital allocation efficiency. If someone is in a position to start a successful business, or engage in productive citizen science, they are overwhelmingly less likely to be a net beneficiary of any welfare scheme.

I think there is a pessimistic utilitarian argument for welfare just because people have concave/risk-averse utility functions (of wealth) and it's possible that the dollar-cheap utility gains for people close to zero might outweigh the higher-order costs, but it strikes me as somewhat fantastical to imagine that there might be meaningful financial gains from a welfare scheme, because people with more welfare money might use the money to read a book or start a successful business or something.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#259

Post by mensetmanusman »

kingcharles wrote: post #226

When I was in jail, a MAJORITY of the people in there were scamming the COVID handouts. I remember one cellmate who had obtained $25,000 in COVID funding to buy PPE for his non-existent business (he was in jail for something unrelated). The guys in my block all had girls on the outside who would do all the paperwork for them for about 25% cut of whatever they made. The prisoners would feed them all their personal inf…

This needs to be a movie.

Re: America’s Covid job-saving programme gave most of its cash to the rich

#260

Post by nerdponx »

jlmorton wrote: post #100
mchusma wrote: post #66

The PPP was designed to obviously benefit the businesses that needed it the least: 1) For any business that is fine or growing with COVID. PPP is free money. 2) Your business is in severe trouble with COVID, so you can't even have employees working productively. You can just give them the money, or use the PPP loan as a bridge loan, but you have to pay it back. It's low interest, but relatively short term and you had…

In hindsight, it should have been structured like Germany's Kurzarbeit ("short-time working") program. Impacted businesses simply furlough employees they don't have work for. Employers continue to pay furloughed employees 70% of their salary, and the government reimburses businesses for the cost of the furloughed employees' salaries. There are no loans, no unemployment insurance. There is nothing employees need to ap…

My impression of PPP is that this was more or less the stated intention. Hard to say whether deviating from that was malice or incompetence.
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