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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

#41

Post by SpicyLemonZest »

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…

I'm sympathetic to the idea that a jubilee can work, but there's no realistic chance that bars are going to be shut down for the next six months. Whether or not it'd be good public policy, people won't stand for it.

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

#42

Post by the_watcher »

> He adds that the law "should also specify that the payments would continue in 2021 and beyond if the unemployment rate rises to 5.5% and remains there or higher. Hopefully this will not happen, but if it does, the money will be needed."

If it has this caveat, it's essentially just UBI, not a response to coronavirus. I'm more sympathetic to UBI than I'd have once expected, but my observation is that any response that creates a potential post-virus entitlement is substantially less likely to pass, and at the moment, the priority should be getting some relief out there. This is suboptimal, but reality.

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

#43

Post by samayylmao »

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…

Two adults working 40/hours a week for minimum wage would bring in 30,160 /year.

If we apply this article's suggestions to your situation: 2,500 (2 adults, 1 child) * 12 months is 30,000 /year.

Like you said, too many people live paycheck to paycheck and our minimum wage keeps it that way. You can barely survive on it.

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

#44

Post by tathougies »

dumbfoundded wrote: post #26
cscurmudgeon wrote: post #20

Earlier quoted context omitted.

The stock market is not a magical abstract thing that has no impact on people's lives. It has an indirect and huge impact on all of us.

Money in our pockets would also have a direct impact us on. Why include the middleman? Let bad companies fail.

I think the issue here is that companies could fail without doing anything wrong. It's not just bad companies that will fail, but also responsible companies that simply cannot weather a months-long economic standstill.

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

#45

Post by macinjosh »

This makes no sense. Why would we give money to every American instead of just those that really need help? If you aren’t living paycheck to paycheck just to cover necessities you should have savings to fallback on. We should be giving money and help only to people who need it. Not people who have over extended themselves with credit card or student loan debt and no savings. People with means could use a lesson in personal responsibility.

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

#46

Post by ralph84 »

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…

Landlords have more expenses than just mortgage payments. Property taxes, insurance, HOA, property management, maintenance. Suspend all of those too?

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

#48

Post by the_watcher »

CubsFan1060 wrote: post #5
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…

If they are government student loans, I think the interest on those is gone for awhile.

Student loan interest on government loans is suspended? Am I reading this right?

EDIT: Found some info, although it's unclear what exactly qualifies the loan: https://www.nytimes.com/2020/03/14/business/student-loans-co...

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

#49

Post by xyzzyz »

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 the problem of only working temporarily: you cannot indebt yourself indefinitely, at some point the service payments will become simply untenable.

2) is the only one practical, but the only way to make it work in practice is to increase taxes all across the population. In result, this will be $1000 monthly only for the very poor. For people around the median, this will balance out to zero or negative.

So, the only way this destroys debt bubble is by 1), inflation destroying cash debt. This is terrible: businesses will not have access to debt to finance operations, mortgages will not be accessible for people without significant savings to buy houses, etc. All around, a terrible idea.

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

#50

Post by Jtsummers »

macinjosh wrote: post #45

This makes no sense. Why would we give money to every American instead of just those that really need help? If you aren’t living paycheck to paycheck just to cover necessities you should have savings to fallback on. We should be giving money and help only to people who need it. Not people who have over extended themselves with credit card or student loan debt and no savings. People with means could use a lesson in pe…

Because means testing requires a massive, and in this case ad hoc, bureaucracy established to evaluate who should get money. Good luck establishing that. Mailing out checks is actually cheaper and technically feasible, in comparison.

Additionally, not everyone in debt got there by way of lack of personal responsibility. One ambulance ride and ER would send many minimum wage earners into debt, even if they were responsible with their earnings.

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