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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

#341

Post by trasz »

tastyfreeze wrote: post #326
asdff wrote: post #15

Earlier quoted context omitted.

This is not very great logic. People try and argue the same about minimum wage and it falls in its face, because economists who practice critical thinking note that when minimum wage has been raised historically, inflation generally did not follow.

After reading about the history and impact of minimum wages it is a policy that I vehemently oppose. Minimum wage started in most places as a way to price a group of workers out of the market so some other group could keep their jobs at the pay they liked. Additionally, minimum wage fails to deliver on its promise of helping low income groups. It makes less jobs available to low skill workers making it more difficult…

I wonder what exactly you’ve been reading or get to this conclusion.

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

#342

Post by kortilla »

therealdrag0 wrote: post #319
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.

The posts article says, > European countries did better: governments encouraged struggling employers to keep workers on their payrolls with reduced hours, and then made up some or all of the pay gap. Unlike the ppp, such programmes were usually aimed only at struggling firms that needed to cut salaries (though they were not always well targeted: a share of beneficiaries in Britain continued to pay dividends). Yet des…

How is that better though? They punished companies that were doing well going in. The end result could easily be worse for the whole economy.

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

#343

Post by newbie789 »

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…

This is the funniest post.

Devil’s advocate, hear me out (thought experiment), what if the economy is made up of people other than business owners? What if economic function needs both businesses and individuals to survive?

Where, out of curiosity, did you find the objective fact that the free money giveaway wasn’t meant to be welfare? It certainly helped a lot of people… fare… better?

Is it possible that a person could be made so averse to the idea of “welfare” through conditioning that, when they see it plainly in front of them, their knee-jerk reaction is to invent a whole new reality to justify making sure the biggest benefactors of society remains squarely “those who need it least“?

If you took your stimulus, or a PPP loan, or avoided eviction due to moratorium, or were in any way given a tiny sliver of help directly or indirectly using government funds, you are a welfare recipient. You can no longer claim having pulled yourself up by your bootstraps! Ever!

The thought is so painful to so many Americans that they literally would rather just starve at the feet of the rich out of some fever-dream version of earned righteousness.

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

#344

Post by Aunche »

kbenson wrote: post #337
Aunche wrote: post #299

Earlier quoted context omitted.

>The cited reason for buying the bank debt instead of the home owner debt was "moral hazard" The moral hazard was the smallest of the problems. The complexity of how to do so seems like the much bigger issue. What does "buying homeowner debt" even mean when much of that debt has been securitized?

Paying mortgages, or a percentage thereof, for people? If it's considered an interest free loan on which the people would pay back in their taxes or on any sale of the home initiated by the owner or as inheritance fees, possibly with a maximum delay before payments must be attempted, then that seems fairly straightforward to me.

How would the government have capacity to do this? It's much easier to just purchase bundles of mortgage backed securities. From the moral hazard standpoint, I think they were worried more about the lenders rather than the lendees. Under this arrangement, even the shadiest of private lenders get rewarded. Under TARP, at least it was just banks that got bailed out, and they could buy the MBSs at a discount.

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

#345

Post by realityking »

gscott wrote: post #327
nerdponx wrote: post #260

Earlier quoted context omitted.

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.

There were some employers who did this. They forced their ex employees off unemployment. The employees didn't like this because unemployment paid significantly more than their old wage. Ppp essentally forced some people back into poverty.

I‘m not american but I‘m struggling to understand how someone‘s unemployment can be higher than their wage. Do you have a link with an explanation?

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

#346

Post by dragonwriter »

realityking wrote: post #345
gscott wrote: post #327

Earlier quoted context omitted.

There were some employers who did this. They forced their ex employees off unemployment. The employees didn't like this because unemployment paid significantly more than their old wage. Ppp essentally forced some people back into poverty.

I‘m not american but I‘m struggling to understand how someone‘s unemployment can be higher than their wage. Do you have a link with an explanation?

> I’m not american but I’m struggling to understand how someone‘s unemployment can be higher than their wage.

Unemployment in the US is state-based, and usually a fraction of recent-past monthly income. During the pandemic, there was an emergency boost designed to bring the average unemployment benefit up to full wage, but this was implement (for simplicity) as a flat $ amoung on top of the usual state unemployment benefit, not a change to the formula. So, lower wage workers ended up above 100% of their recent-past wage while the emergency enhancement was in effect.

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

#347

Post by pjc50 »

ryandrake wrote: post #314
hibikir wrote: post #33

The US lacks the state capacity to tell who was going to have trouble with COVID-19 closures, and who wouldn't, so a whole lot of money just had to go to people that had no need for it whatsoever. Regarding PPP, every local tech staff augmentation company got a few months worth of payroll out of it. For those of you not in the know, their model involves hiring developers at $x an hour, and then placing them at large…

> The US lacks the state capacity to tell who was going to have trouble with COVID-19 closures, and who wouldn't, so a whole lot of money just had to go to people that had no need for it whatsoever. I love how it’s so critical that we means-test individual welfare so that no dollar can possibly go to someone who doesn’t need it, but when it comes to means-testing corporations for handouts, all of a sudden it’s imposs…

Those are the political conditions imposed by the ruling party at the time; the measures did get actual money to the public, but to do so it was necessary to pay off everyone who might have objected.

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

#348

Post by Fricken »

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.

Friends I know run a small Canadian documentary film production company. They received a hefty chunk of change in the early days of the pandemic that they really didn't need.

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

#349

Post by dragonwriter »

Aunche wrote: post #344
kbenson wrote: post #337

Earlier quoted context omitted.

Paying mortgages, or a percentage thereof, for people? If it's considered an interest free loan on which the people would pay back in their taxes or on any sale of the home initiated by the owner or as inheritance fees, possibly with a maximum delay before payments must be attempted, then that seems fairly straightforward to me.

How would the government have capacity to do this? It's much easier to just purchase bundles of mortgage backed securities. From the moral hazard standpoint, I think they were worried more about the lenders rather than the lendees. Under this arrangement, even the shadiest of private lenders get rewarded. Under TARP, at least it was just banks that got bailed out, and they could buy the MBSs at a discount.

> How would the government have capacity to do this?

To pay mortgages? Set standards for when it would do it, and then open up public applications.

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

#350

Post by alistairSH »

dnautics wrote: post #129
hpkuarg wrote: post #116

Earlier quoted context omitted.

> You can't Sure you can. Unimproved value of the land is simply the value of the lot as a whole minus the value of building that sits atop (well, improvements aren't always buildings, but that's a simple example). You can approximate it by comparing it against the transaction prices of nearby lots that aren't improved, or by taking the construction cost out of the purchase price of the lot. > is popular with politic…

So a unit that abuts the el should have the same per acre value as a unit a block and a half away?

That’s no more true under LVT than it is today.
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