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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

#271

Post by mlyle »

wyager wrote: post #269
mlyle wrote: post #267

Earlier quoted context omitted.

> They would net fare worse under a more efficient scheme. If I were such a person, I would prefer UBI cash to welfare with strings. Are you saying you'd prefer to receive benefits in-kind as e.g. housing assistance instead of cash? Don't conflate "more economically efficient" with "gives recipients less".

I am very confident that the modal welfare voter would prefer the current system, which was specifically designed to buy their vote, to any system which appeals to utilitarian-minded technocrats and costs within a factor of 2 of the current system.

Without justification.

Look, well-minding paternalistic peeps are behind the current system of "you can only buy some kinds of food with SNAP" and "you must spend this particular money with only certain providers of housing!" It's not the benefit recipient demanding that they be restricted in how they spend their benefits.

Less strings on the money is A) cheaper, and B) nicer for the recipient. I have no doubt that if you offered any poor person the choice between $600 in cash each month and $600 of section 8 credits, they'd take the former.

But, you know, you might deal with someone spending it all on crack (which is why we currently restrict the usage of funds). At least it'll be economically efficient, instead of them selling their SNAP card for crack for 50 cents on the dollar, like is the current outcome.

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

#272

Post by JKCalhoun »

sbelskie wrote: post #250
BiggsHoson wrote: post #241

No surprise there. Who are the rich? The politicians and bureaucrats who implemented these ideas, along with their buddies who fund their campaigns and junkets, and offer cushy board positions and lobbying gigs if they ever do leave their government posts.

Were there countries that did a better job than the US in regards to the economic response the pandemic, particularly with respect to fiscal stimulus? Is any other country as close the the US to prepandemic GDP trendlines? I wouldn’t be surprised if there are but I’m honestly not aware of them.

I'm curious too. But I would suggest that the U.S. has very deep pockets and can throw a lot of money at a problem. That doesn't mean it was a "smart" response by the U.S.

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

#273

Post by wyager »

xyzzy123 wrote: post #263
wyager wrote: post #258

Earlier quoted context omitted.

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 li…

You make good points here, thanks. It was interesting to think about rate of increase of utility over time, it did throw new light on the idea of UBI for me.

You as well. You make good observations about some of the possible higher-order upsides of UBI that are easy to gloss over. I think both of us are at the very least approaching this on a sound ontological basis, even if there's a lot of room for quantitative uncertainty.

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

#274

Post by wayoutthere »

nerdponx wrote: post #260
jlmorton wrote: post #100

Earlier quoted context omitted.

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.

Why can’t it be both? The previous administration was malevolently incompetent, as opposed to the current one that is simply incompetent.

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

#275

Post by sbelskie »

JKCalhoun wrote: post #272
sbelskie wrote: post #250

Earlier quoted context omitted.

Were there countries that did a better job than the US in regards to the economic response the pandemic, particularly with respect to fiscal stimulus? Is any other country as close the the US to prepandemic GDP trendlines? I wouldn’t be surprised if there are but I’m honestly not aware of them.

I'm curious too. But I would suggest that the U.S. has very deep pockets and can throw a lot of money at a problem. That doesn't mean it was a "smart" response by the U.S.

I think it’s totally fair to criticize the response and suggest it could have been better, I meant it more in terms of the people complaining never seem to entertain the counterfactual of how bad things could have ended up with no/poor fiscal response.

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

#276

Post by kQq9oHeAz6wLLS »

wyager wrote: post #120
jlmorton wrote: post #100

Earlier quoted context omitted.

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…

In hindsight, the government shouldn't have precipitated the conditions that justified these "loans" in the first place. The whole putative point of this (reducing covid deaths) was obviously ineffective and/or a red herring. Of course, if you think the actual point was liquidation of Kulaks, it was quite effective at that.

> The whole putative point of this (reducing covid deaths) was obviously ineffective

Yesterday's conspiracy theory is tomorrow's news[1]

[1] https://www.washingtontimes.com/news/2022/jan/31/lockdowns-h...

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

#277

Post by abakker »

naasking wrote: post #268
abakker wrote: post #253

Earlier quoted context omitted.

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.

It's bad to keep countering complaints about 2008 as if the balance sheet is all that matters. The ethical complaints aren't about the money, but about the incentives and disincentives for certain behaviour, and the constant preferential treatment for a certain class of people above others. The cited reason for buying the bank debt instead of the home owner debt was "moral hazard", which actually applies to them both…

The worry was about creating moral hazard — the idea being that we would set a precedent that would drive the banks to be even more risk tolerant. Ultimately, everyone decided that the risk of bank collapse and bank runs were worse risks that the possibility that moral hazard would be the outcome.

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

#278

Post by brailsafe »

MattGaiser wrote: post #94
rory wrote: post #60

I know a few upper-middle class small business owners (all non-retail sectors) whose businesses weren't substantially affected by the pandemic, but who basically got a free handout as part of the program. Two mentioned how they were initially hesitant to apply for money, but then worried that if they didn't, their business could take a downturn after it was too late. Then as long as they spent the money on payroll (w…

A friend worked for a company that used the Canadian equivalent during a period of record growth. As they doubled their headcount, they got the gov to pay for it all.

and it still took me 2 years to find a job, not even in Canada! GG

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

#279

Post by e4e78a06 »

ClumsyPilot wrote: post #130
e4e78a06 wrote: post #44

Earlier quoted context omitted.

We haven't had real economic growth in the US since the 70's when deindustrialization first began. If you discount by the real estate market's return instead of CPI you have negative or flat real growth. CPI includes a lot of goods that are long run deflationary like TVs, food, and cars. I'd point you to China for an example of what "rising tide lifts all boats" actually looks like. And to add to that - it matters a…

"Wealth redistribution has never worked in history." Are you sure about that? Do we still have kings and barons owning entire states as personal property?

Maybe not, but we have no better a system than ancient Rome where votes were bought by wealthy politicians from the upper class. But even if you limit examination to recent history:

- apartheid South Africa land redistributions led to "most of the farms [failing]" [1]

- Great Leap Forward in China confiscated huge amounts of wealth from landowners, gave it to the government and peasants, and caused massive famine

- "There is no wealth to distribute" in Venezuela [2]

- USSR literally killed millions by forcing individual farmers to work in large scale collective farms

- socialist reforms in other Latin American states coincided with periods of economic stagnation

I will also leave you with this link [3] to a breakdown of Swedish government tax revenues. You'll see the majority comes from taxes on labor and products (VAT) rather than taxes on capital and corporate revenue. So even in so-called democratic socialist states there is not a lot of wealth redistribution happening.

[1]: https://www.latimes.com/archives/la-xpm-2010-nov-21-la-fg-so... [2]: https://www.aljazeera.com/economy/2020/7/8/there-is-no-wealt... [3]: https://www.oecd.org/ctp/tax-policy/revenue-statistics-swede...

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

#280

Post by naasking »

abakker wrote: post #277
naasking wrote: post #268

Earlier quoted context omitted.

It's bad to keep countering complaints about 2008 as if the balance sheet is all that matters. The ethical complaints aren't about the money, but about the incentives and disincentives for certain behaviour, and the constant preferential treatment for a certain class of people above others. The cited reason for buying the bank debt instead of the home owner debt was "moral hazard", which actually applies to them both…

The worry was about creating moral hazard — the idea being that we would set a precedent that would drive the banks to be even more risk tolerant. Ultimately, everyone decided that the risk of bank collapse and bank runs were worse risks that the possibility that moral hazard would be the outcome.

Almost exactly the same argument applies to mortgage relief for the home owners, that's my point.
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