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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

#71

Post by macinjosh »

Jtsummers wrote: post #50
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 respon…

I agree, the people I had in mind are those who make high 5 to low 6 figures but have extensive credit card debt for things like vacations, unnecessary purchases, or expensive cars. (I personally have been guilty of this in the past)

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

#72

Post by adventured »

leggomylibro wrote: post #29
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 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…

> only 40% of Americans are able to cover an unexpected $1000 expense. That's the really sobering number, in my view

This is pretty common everywhere across the developed world. The majority of OECD nations have a lower median wealth figure than the US, including Sweden and Germany (their median wealth figures are particularly shockingly low, given the affluence those nations should have vs their national output and given the high German savings rate).

The OECD labor force participation rate is such that about 28% of persons 15-64 do not work. Of the 72% group, a solid 1/3 are typically working jobs where they struggle to make ends meet month to month. The only way a lot of people will have a spare $1,000 in cash for random emergency expense, is if you directly transfer cash to them, and even in that case they will inevitably need to spend it sooner than later.

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

#73

Post by whack »

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…

The fed's job is literally to control the money supply, which includes expanding it at certain times. Currently they are doing it through various transactions and loans conducted with other banks. The proposal is to simply give cash to citizens instead.

Saying that this will lead to inflation is moot - this proposal will only take effect when inflation is explicitly desired.

https://www.investopedia.com/articles/08/fight-recession.asp

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

#74

Post by KMnO4 »

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…

> And I am VERY lucky to have a bunch of cashed packed away.

Luck may not be the only factor. It sounds like you live responsibly/frugally as well, and reaping the benefit from it now.

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

#75

Post by cle »

samayylmao wrote: post #43
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.

My interpretation was that flat $ amounts are leaving a lot on the table, with the extreme divergence of COL in cities vs. suburban vs. rural areas.

And I agree. I don't think the federal government should frame these things in terms of absolute $ amounts (I see the same thing in e.g. tax brackets and tax credits). The amounts should ideally be adjusted based on the COL and the dollar's purchasing power in the citizen's local area.

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

#76

Post by TheFiend7 »

The whole idea of UBI is honestly pretty idiotic. Any form of UBI should 1000% be in the form of benefits, goods, housing, or other physical goods.

I'd much rather have tax cuts to reduce money lost through the middle man, as the middle man always wants a cut. Meaning you'd lose far more money to the process than if you were to just reduce taxes.

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

#77

Post by NamTaf »

Jtsummers wrote: post #50
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 respon…

Means-testing it isn't necessarily that difficult. When Australia implemented the same idea during the GFC, it was paid out on a scale up to ~$130k based on the previous year's income tax report. Whilst not perfect, I'd be willing to bet good money that it correlates pretty decently well across financial years.

It was also distributed via direct electronic funds transfer in the most case (as that's how the vast majority opt to receive a tax return), so it was pretty frictionless here because all of that infromation was readily on hand. That may not apply in the US, I don't know.

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

#78

Post by jawns »

maximente wrote: post #57

i just don't see how UBI survives a highly polarized, segregated society pumped out by the US media. imagine the headlines by Fox News as soon as they find 4 people living together playing video games all day. or smoking pot. or etc. in a weird way it dangerously exposes people as, according to "the economy", particularly not valuable. the framing will go: these people are literally doing nothing and we're supporting…

This is not my opinion, but I think there are many people out there who would be happy for those four people to live together off UBI and play video games and smoke pot all day and literally do nothing to contribute to society.

Why? Because it contains them. Otherwise, where would they be? If they have little interest in holding down a job, they're probably out committing crimes, or sitting in jail for those crimes. So the thinking goes that UBI is a way to contain them without having to jail them.

I don't think this is the right way to think about this problem, but I think it's tempting to think this way.

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

#79

Post by skandl »

Simple, direct, democratic. $1000 is a good amount - for those in need it can be stretched to go a long way (just imagine the status quo alternative). For those who are more comfortable, it's an easy amount that can be saved, donated, or spent on discretionary items, all wins for us.

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

#80

Post by macinjosh »

_fullpint wrote: post #60
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…

It’s not about helping those in need. It’s about putting money in hands that will actually spend it. A solution to recessions is increasing Aggregate Demand. People spending money does just that.

How are people going to spend this extra money in their local economy if they are isolated in their home? Sounds like a handout for Amazon really.
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