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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

#81

Post by leggomylibro »

champagneben wrote: post #51
leggomylibro wrote: post #40

Earlier quoted context omitted.

Well, policymakers could re-asses at that point in time if they decided to take an action like this. If you really believe that things will remain disrupted for a long time, it seems like you could see this as a great opportunity for a basic income experiment, huh?

One of the interesting questions would be how much a basic income would affect people's willingness to work, and we would not be getting that out of this experiment. In fact, I can't imagine anything useful we'd be getting out of that experiment, except for its effects in similar very dramatic circumstances.

Still a useful data point. It would be nice to add this sort of action to the same toolbox which already contains quantitative easing.

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

#82

Post by toomuchtodo »

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…

> 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.

There is another way to do it without issuing debt, but while still controlling monetary policy.

1. Provision "dividend.federalreserve.gov" CRUD app (or just dividend.gov for convenience). Create "Fed" accounts, very similar to what you get with a Social Security Administration account at https://ssa.gov. Accept routing and account numbers from citizens. Issue debit cards with no fees to the unbanked. Provide local service at Social Security offices.

2. The Fed slowly buys up income producing assets (equities, fixed income, etc), and distributes the gains monthly to everyone. Many central banks go on buying binges to support asset prices already (the Bank of Japan already owns a significant amount of the Nikkei [1]).

You will eventually arrive at a UBI supported by the economic productivity of your country. Alaska does something smaller with oil revenue already [2]. This also keeps with Fed mandates to maximize employment and keep inflation around their 2% target (inflation will never increase because of structural demographics, the shift to a service economy, the transition to EVs and renewables, etc).

[1] https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be...

[2] https://en.wikipedia.org/wiki/Alaska_Permanent_Fund

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

#83

Post by aeternum »

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…

QE already is #3. The Fed is printing money to purchase bonds/treasures/bad mortgages. The printing of money definitely needs to be balanced in order to stabilize inflation, but the fed is doing that.

The only difference would be that instead of the Fed injecting the printed money through financial instrument purchases which benefit the top 5%, they would provide it to all citizens as a UBI.

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

#84

Post by FabHK »

Hong Kong will distribute HKD 10,000 to every citizen (about USD 1300).

USD 1000 for every American (while low) strikes me as a sensible, effective, efficient, fast measure that helps the poor more than the rich. As such, unlikely it will come to pass in today’s USA.

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

#85

Post by wonderwonder »

maratd wrote: post #8
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…

I think this is a profoundly bad idea. It's just as dumb as the fed trying to prop things up. You're not going to solve this problem with money, but with a strong response to the root cause, the pandemic. That said ... > My wife and I have a newborn, which currently isn't very expensive but we all still need to eat I imagine you would get $3k since there are 3 of you.

People working many hourly jobs net less than $1,000 per month and cannot afford to take unpaid time off. So they go to work and spread the virus. Providing them and others with enough money to at least cover their most dire bills reduces that need to go to work sick. If money is not provided to these people, the odds that they are soon homeless if their work closes down is very real.

~40% of America cannot afford a $400 emergency, all of those people are at real risk of hunger and homelessness.

Giving everyone cash allows the country the freedom to implement programs that run a real chance of preventing the spread. It also goes a long way towards preventing societal chaos as people without savings and suddenly no income are now provided a way to continue living and feeding their families.

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

#86

Post by [deleted] »

imperialdrive wrote: post #66
Ididntdothis wrote: post #37

That seems pretty silly. Me and probably a lot of other people would just put it aside and save because we don’t need the money. And for the people in some industries who are at risk of losing their jobs this is laughably little money. In Germany there is a concept called “Kurzarbeit”. Companies reduce work hours and salaries across the board and unemployment insurance makes up for some of it. This way mass layoffs a…

You, me, others may not need it, but then again we'd be paying for it with assets getting hit because if I understand correctly, this would be in place of bigger bail-outs so our stock/401k/real estate etc would take a hefty hit knowing we won't starve even with big losses.

[deleted]

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

#87

Post by overthemoon »

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…

I agree, although I think once it happens it stands a chance of being politically bulletproof--argue about it beforehand all you want, but once people have the 1k check in their hands, regardless of their means, it might be hard to take out. I believe the Alaska Permanent Fund is similar.

My objection to it is that it'll be too easy to go after social programs, which for some I assume is the point--"you have the money, you don't need SNAP/Medicare/Social Security/etc". This proposal seems too much like an opportunistic attempt to trial the UBI. It'll be moderately successful on some metric, I'm sure, and that'll be used to push a permanent UBI.

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

#88

Post by ntsplnkv2 »

SpicyLemonZest wrote: post #53
ntsplnkv2 wrote: post #33

Earlier quoted context omitted.

It's a one time payment. It just delays everything by a month. I fail to see how this solves the problem.

The goal is create as many delays as possible, to maximize the duration and number of people who can stay home instead of spreading the virus. It doesn't address the root problem because we can't solve the problem - people will have to go back to work eventually. We're not a post-scarcity society yet.

I don't think 1 month of safety is enough to convince people who need to work to not work. they'll simply say "what about next month."

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

#89

Post by EastLondonCoder »

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…

I agree that high inflation is really bad, but during the last decade there has been several rounds of QE without causing particularly high inflation. The recent QE package from the FED is about 2000USD per person in the US, perhaps some of it could be dished out as a helicopter drop instead.

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

#90

Post by maliker »

There was a $300/person tax rebate during the 2008 recession in the USA. So it's not that far fetched an idea.

I wonder how these kind of direct-to-consumer payments compare with traditional monetary policy (cutting interest rates, securities purchases) in terms of impacts.

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