13 ms·

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

217 points by spking 7y ago

omgwtfbbqhihihi 7y ago
That will last a week at best
- Jtsummers 7y ago
  That depends on where you live. Prior to a recent move to a high COL area, it would've lasted me a month, with $50-100 to spare (rent, utilities, and food if I went for rice and beans and the cheapest meat I could find). Cut out the optional services (streaming services) and fuel (not driving as much, $100/month fuel cost gets reduced to maybe $20 for the isolation month), and it can work in many parts of the country. It probably wouldn't last long in San Francisco, New York, Seattle, and other high COL areas. And to make it last, you'd need roommates, which creates a hazard with regard to trying to create/enforce social distancing. But not every city or region has crazy high rent. Some places are still sane.
tjr225 7y ago
Am I way out of band or does that seem like a comically small amount of money for the average American? I live in an extremely low COL area and live well within my current means. Assuming my work dries up and I don't have any savings, 3k$ 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 wife and I have a newborn, which currently isn't very expensive but we all still need to eat. The average one bedroom rental in any given metro area, even in mid sized cities, probably lands somewhere around my basic monthy costs. So, if you're a single person in the city you might get one month out of 1k$. And I am VERY lucky to have a bunch of cashed packed away. I assume at least a large portion of this country is living paycheck to paycheck.
- CubsFan1060 7y ago
  If they are government student loans, I think the interest on those is gone for awhile.
  - tjr225 7y ago
    That also seemed like a comically paltry move. I still have to make my payments, after all! In addition my wife and I have spent the last couple of years with two incomes wiping away our student debt on high incomes in Seattle - so the only loans I have left are pretty low interest. The only way I can see this working for everyone is to simply halt the economy altogether. No mortgages, no bills, free food, free medical care. Once we get a hold on the disease itself we can deal with the economic impacts.
    - CubsFan1060 7y ago
      I suspect the interest will help some quite a bit. Not everyone, of course. I do think that the money would be better if targeted toward certain people versus peanut-buttered over everyone.
      - basch 7y ago
        But the payment doesnt go down, it just applies more to principal. It will benefit people more in the long run, but it's not short term relief.
    - fortran77 7y ago
      Of course, suspend the payments through this crisis, but why should you not owe it?
      - tjr225 7y ago
        What exactly are you trying to do here? Criticize my life choices? You don't know me or my decisions. What if I did exactly what you said but happened to fall in love with a wonderful woman who happened to have a bunch of student debt? Why should _anyone_ to be expected to pay their student loans if all of the other sectors of the economy are going to shut down? The biggest mistake I making here is even attempting to have a discussion with you. Bugger off.
vkou 7y ago
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 of the system. [1] Deferral doesn't work. A bartender living paycheque to paycheque, who lost his job because all bars were shut down is not going to be able to magic up six months of back-rent in September. His landlord won't see a penny of that owed money... But the landlord's bank will be demanding six months of mortgage payments.
- simonh 7y ago
  Then what happens to the people who's income depends on those rent payments. I think an approach like this makes sense. The problem is immediate cash flow for people. This is cash flowing to people. It may not be enough, but it's moving in the right direction. We're not going to re-engineer the economy in the next few weeks.
  - vkou 7y ago
    > Then what happens to the people who's income depends on those rent payments. Since they also won't need to pay rent or mortgage, they won't get kicked out of their homes, too. Which is about the most that people should expect when the economy grinds to a halt. Otherwise, tough. We're in a state of emergency, that is preventing their tenants from getting paid. Just like their tenants, they'll have to deal with it. > We're not going to re-engineer the economy in the next few weeks. 1. This is not going to blow over in a few weeks. 2. We sure as hell shouldn't empty the treasury into the pockets of landlords over a few weeks. They should not be the only people to walk out of this unscathed. Suspending rents and mortgages is the only fair thing to do. It costs the state, and the taxpayers nothing, it puts everyone on an even footing, in terms of continuing to have a roof to sleep under, and it doesn't screw us six months down the road.
    - PeterisP 7y ago
vearwhershuh 7y ago
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.
- Gunax 7y ago
  Let's make it 10k per month, then we can all be wealthy.
  - vearwhershuh 7y ago
    Obviously there is a level that makes sense and a level that does not. Using the big-bank/government debt-system to manage our money supply is no more or less free market than a citizens dividend, it just ensures that the wealthy get first dibs on the new money and then the rest of us pay interest on it. Steve Keen's idea for a modern debt jubilee is more important for the long term growth of the economy: http://www.debtdeflation.com/blogs/manifesto/ http://www.debtdeflation.com/blogs/manifesto/ I get where you are coming from, but the current system is completely out of control, as always happens with a usury-based economy.
    - clairity 7y ago
      this angle of where to inject money into the system is the only potentially reasonable argument i've heard for UBI so far (but doesn't address its many other adverse consequences). without much consideration by us commoners, we've come to accept that money must be injected into the economy through large financial institutions that gatekeep and rentseek. money is literally the intermediary for trading the fruits of labor (not capital) with each other, and the closer money is injected into the system at the point value is created (when labor turns raw materials into desirable goods), the better.
      - vearwhershuh 7y ago
Gunax 7y ago
I too think this is silly. Everyone wants to use this disaster to achieve the policy goals they wanted anyway. Republicans want to use it as an excuse for tax cuts. Democrats want to expand public healthcare and benefits. Everyone is trying to attach riders for domestic violence victims or pork spending or whatever pet issue they have. And now the Ubi folks want this. Nothing changes. Same BS.
- andreilys 7y ago
  What do you think will help the recovery more, QE by central banks or UBI?
  - beatgammit 7y ago
    Neither? Markets have been overheated, so a correction makes a ton of sense. What we need is to get over this pandemic as quickly as possible so we can stop disrupting trade and get people back to work. The news coming out of China is encouraging, and production seems to be slowly returning to normal. Any discussion about UBI should be based on the long term merits, not a reaction to any current crisis. QE is a bit different, but honestly I think it does more harm than good much of the time, especially once it makes it through the political system.
  - nostromo 7y ago
    QE tends to be net neutral financially. The Fed steps in, makes some loans or buys some securities -- when the disaster abates, they get some money back from their loans and sell the securities for a profit.
- gdubs 7y ago
  UBI, Tax Cuts, Social Safety Net – these are all different approaches to solving actual problems. Are politics full of pork and cynicism? Sure. But at the end of the day _something_ needs to be done, and it would be more constructive to have a rational discussion of which of the tools at our disposal stand a chance against this menace.
  - 7y ago
paxys 7y ago
America's immediate priority needs to be public health, not the stock market. The economy will recover, dead people won't.
- cscurmudgeon 7y ago
  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.
  - dumbfoundded 7y ago
    Money in our pockets would also have a direct impact us on. Why include the middleman? Let bad companies fail.
    - tathougies 7y ago
      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.
      - dumbfoundded 7y ago
        Other than the logistical difficulties specifically imposed by Covid 19, I believe good companies should be able to weather a couple of months of double-digit reductions in sales. Like if airlines or large events are forced to close down, I could see helping them. Everyone else who simply has to deal with a reduction in consumer spending should take some responsibility for overbuilding for an overheated economy. For whatever cause, the Fed has predicted a recession months ago.
    - cscurmudgeon 7y ago
      Most (all?) of the stimulus is loans that will be repaid.
  - nerfhammer 7y ago
tomp 7y ago
I've been railing against this idea as uniquely stupid for the past few days. 1. For people who are living "paycheck-to-paycheck", this won't even matter. How far does $1000 get you in the US? A better policy would be a general amnesty on rent and interest payments for a few months, and temporary free healthcare. 2. For industries where it's a demand shock (e.g. travel), no amount of helicopter money will restart the demand. A better solution would be helping the companies directly, to the extent the government wants to help them survive, by e.g. tax write-offs or delays, emergency credit loans, or my favorite, emergency equity (the free-market solution, if your company cannot survive because of your poor panic, you don't deserve to own (all of) it). 3. For industries where it's a supply shock (face masks, hand sanitizers, possibly soon but hopefully not food), some kind of coupon-based rationing (with the government paying the producers directly) would be a better solution, providing just the necessities for survival and ensuring there's minimal waste.
- ntsplnkv2 7y ago
  On point one, that's just the thing. If I got 1000$ right now from the government, I'd pay things that I'd already have been paying anyway, or I'd save it because the economy is bad. I'd imagine most people would do something similar.
  - PeterisP 7y ago
    > pay things that I'd already have been paying anyway That's kind of the point. With a nearly imminent lockdown, many people would not be able to pay for things that they have been paying all the time, and that will bankrupt companies and break the economy. A cash injection that allows you to pay for things that you're already paying for - and get the basic things you were already getting before - would be quite helpful.
    - ntsplnkv2 7y ago
      It's a one time payment. It just delays everything by a month. I fail to see how this solves the problem.
tln 7y ago
How about a $10k loan instead? Zero interest, paid back through IRS over 10 years, with decreasing amounts available based on last years income.
- ytgh76 7y ago
  better a perpetual with negative interest
- NamTaf 7y ago
  A loan may not encourage spending in the same way free, no-strings-attached money does. For example, if you're poor and struggling pay-to-pay, would you like the idea of borrowing knowing that it'll bite you later on when you have to survive on even less money due to paying back the loan? On the other hand, absolutely no-strings-attached money might see you spend it on something that you've needed for a while but haven't been able to afford.
  - tln 7y ago
    Quite true, my thought was that a loan can be a larger amount. $1k one time on't change much, $10k would help people pay for food etc. It's always possible to do both. > Furman proposes Congress pass a "one-time payment of $1,000 to every adult..."
- onetimemanytime 7y ago
  Need based maybe. But $10K in one shot might be hard to pay and easy to spend
Ididntdothis 7y ago
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 are avoided. That’s the way to go in my view. But I guess the US will either do nothing or hand a lot of money over to the top income earners in the hope that they will “create ” jobs.
- imperialdrive 7y ago
  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 7y ago
    [deleted]
- dlhavema 7y ago
  About 80% of Americans live paycheck to paycheck. So you are in the minority [1] https://www.cnbc.com/amp/2019/01/09/shutdown-highlights-that-4-in-5-us-workers-live-paycheck-to-paycheck.html https://www.cnbc.com/amp/2019/01/09/shutdown-highlights-that...
- kevin_thibedeau 7y ago
  > hand a lot of money over to the top income earners They just got their loan interest rates reduced. All with a nice excuse to cover for it.
- mattmanser 7y ago
  This is classic "me and my friends are rich, therefore everyone else is". You just don't realize you're in the top 10-20% of earners, and the difficulties of those underneath you.
the_watcher 7y ago
> 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.
macinjosh 7y ago
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.
- Jtsummers 7y ago
  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.
  - belltaco 7y ago
    I think the IRS is much better set up for this than state run welfare programs. Send a check out to everyone now but collect $950 more in taxes next year from only folks that made more than $XX,XXX amount of money in 2020. Also you could make it so that uncashed checks would be cancelled by next year and you get a $50 extra refund.
  - macinjosh 7y ago
    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)
  - NamTaf 7y ago
    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.
lsllc 7y ago
I think something like a $10K tax rebate per person would be more appropriate. 1. It'll help people cover their bills 2. It'll put a shit-ton of money out to help reboot the economy when this all blows over.
- xyzzyz 7y ago
  Tax rebate doesn’t help if you don’t pay any tax, and if you’re out of work, you’re also not paying tax. For example, if you normally make the median income of $30k, but quarantine put you out of work for 3 months, you’re down to $22,500, your federal tax bill is ~$2700, and so this is most you can get from tax rebate. If you have children, this is even lower. While I agree that tax rebates are typically correct approach, here it’s not the case: they won’t help much those who most need it, and they’ll help most those who don’t need them at all.
  - refurb 7y ago
    Then make it a tax credit. Regardless of what you pays in tax (it could be zero) you’ll get $X amount as a direct credit.
  - lsllc 7y ago
    Right, tax credit then.
maximente 7y ago
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 them financially, no questions asked. that will draw a fair amount of outrage, i assume, given that the US can't even get that done for older and poorer people. that's why i think if you buy in to UBI, you sort of need whatever else Yang brought with it - measuring societal value differently, etc. otherwise you are looking at a situation where certain persons are going to be portrayed as truly valueless, bc in the US the economy dominates so much. and i don't think that bodes well for those people.
- jawns 7y ago
  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.
  - ThrowawayR2 7y ago
    Any form of entertainment is going to feel empty eventually and then you're right back at square one. A universal jobs program makes more sense as a form of containment; it needn't even be particularly onerous.
- overthemoon 7y ago
  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.
ouid 7y ago
It's looking to me like the only way to fight the coronavirus recession is to have a strong enough testing capacity that we can be relatively sure that the people we are interacting with in the world do not have the virus.
salimmadjd 7y ago
Congresswoman Tulsi Gabbard put a bill last week on the house. https://www.congress.gov/bill/116th-congress/house-resolution/897/text?r=5&s=1 https://www.congress.gov/bill/116th-congress/house-resolutio...
wallflower 7y ago
The $1.5T injection would have been about 5 months of $1,000 UBI.
- refurb 7y ago
  Except the $1.5B injection was a loan, not an actual expenditure.
TheFiend7 7y ago
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.
- AnthonyMouse 7y ago
  > Any form of UBI should 1000% be in the form of benefits, goods, housing, or other physical goods. We've tried this and it's a dumpster fire. The government builds low income housing which is 100% people in poverty and it turns into a slum. The government subsidizes home loans and student loans and it raises the cost of housing and education. The government subsidizes food and then restaurant workers who already have access to food can't use the money to fix their car or whatever it is they really need right now. People know what they need better than bureaucrats do. If you give them money and they need food, they buy food. If you give them money and they need transportation, they buy transportation. If you give them food and they need transportation, you messed up, which is what consistently happens in practice when you don't give them money.
  - TheFiend7 7y ago
    Fair but you just completely ignored the second half of my comment. Instead of handing out money, don't take it in the first place?
    - AnthonyMouse 7y ago
      In general that's just the same thing. If the per capita average cost of providing roads and schools etc. is $15,000/year then anybody you're taxing less than $15,000/year is really getting a subsidy in the amount of the difference. They get roads and schools and pay less in tax than they cost and the other taxpayers have to pick up the tab. Nothing about that changes at the point where the amount of "tax" someone pays goes negative. They started getting a subsidy from other taxpayers when they paid less than $15,000, not when they paid less than $0. So if you want to call a UBI a "tax credit" then go ahead, but changing the name to "tax credit" makes no mathematical or economic difference at all.
skandl 7y ago
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.
FabHK 7y ago
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.
maliker 7y ago
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.
- strunz 7y ago
  Wasn;t it determined that no one actually spent that money and just paid of debt instead?
  - jfengel 7y ago
    Not no one, but few. That's what the National Bureau of Economic Research concluded: https://www.nber.org/papers/w15421 https://www.nber.org/papers/w15421 "Only about one-fifth of respondents in the Reuters/University of Michigan survey report that the 2008 tax rebates led them to mostly increase spending, while over half said it would lead them to mostly pay off debt... [T]he results imply that the rebates provided only a modest stimulus to spending per dollar of rebate."
fxtentacle 7y ago
I predict that Americans hate their less wealthy fellow citizens way too much for this to ever turn into reality.
trophycase 7y ago
Nope, as pointed out by others. This doesn't do anything to solve the systemic problems that allowed this to happen and us to be woefully unprepared for this.
- georgemcbay 7y ago
  I don't have any specific opinion on if the proposed action would be a good or a bad thing (I'm not an economist or policy-wonk type), but it seems silly to me to dismiss actions taken in a crisis just because they don't solve the systemic problems that caused the situation. Sometimes you need to stem the bleeding to buy yourself enough time to fix the underlying problem.
missedthecue 7y ago
I think this is silly. The idea behind this is to induce demand, but there isn't a lack of demand due to lack of purchasing power. People aren't spending because they aren't leaving the house. (which, in the case of a pandemic, is a thing to be encouraged) I sincerely doubt that giving everyone a thousand bucks will save the restaurants and bars and movie theaters and retailers and cruise ships and hotels and airlines etc...
- vishaalk 7y ago
  People lost their jobs and therefore their income, so there was a material loss in demand.
- xxandroxygen 7y ago
  You're right, a thousand bucks a person won't save those things. But the people who /were/ working at those restaurants/bars/etc now have a way to buy food for the month. People aren't leaving the house but they sure still need to spend on food, rent, basics.
giarc 7y ago
This method is good when you want people to go out and shop and spend the money. What happens when millions of American's now have money to go out and eat and go on vacation? That's the opposite of what we want.
zbyte64 7y ago
Or we could provide universal healthcare, but that would be crazy.
- jakearmitage 7y ago
  How would that help at this point in time? Italy has universal health and it is not helping. UBI, on the other hand, could make an impact.
  - foldr 7y ago
    >Italy has universal health and it is not helping You can't just sat that universal health care isn't helping in Italy because things are bad there. Things might be even worse if Italy didn't have universal health care.
- jkingsbery 7y ago
  As we are all being reminded now, healthcare is a good with a fixed capacity. We still need some way to decide who gets access to the capacity. But even if we did provide universal healthcare, people who aren't working run the risk of losing their homes, access to food, and other necessities, so providing universal healthcare would only solve part of the problem that's being proposed.
- jpindar 7y ago
  Right now, being able to stay in your home IS healthcare.
malandrew 7y ago
My guess is that most of this money would be spent on businesses that are still operating, which means that those businesses that are hurting the most, because they are shut down, wouldn't see much or any of this stimulus.
Proven 7y ago
Universal weapon, huh? Why not 5K or 100K? Why not give free money to illegal immigrants, or better, to the entire world? Every dollar you print out of nothing is stolen from the savers who worked for it.
danellis 7y ago
Misleading headline. The proposal is actually for "every adult who is a U.S. citizen or a taxpaying U.S. resident".
timwaagh 7y ago
They tried that in Iran. The result: massive inflation. The system cannot handle such a massive spike in demand especially if production is under strain from covid. It surprises me Romney is for it because he was a politician back when ahmedinejad tried that little stunt.
- throw0101a 7y ago
  When has Iran not have massive (>10%) inflation? * https://tradingeconomics.com/iran/inflation-cpi https://tradingeconomics.com/iran/inflation-cpi Not since at least 1970 AFAICT.
- Mountain_Skies 7y ago
  Romney and economic disaster for the working class seem to go hand in hand.
selfishgene 7y ago
I like how Mankiew nonchalantly remarks that $1000 "sounds about right." Wonder if he consulted any of the models in his widely used Macroeconomics textbook in order to reach this profound conclusion. I think an even better way to help people right now would include Congress putting an end to the price gouging of students who are forced to pay as much as $200 dollars a pop to purchase textbooks (like Mankiew's Macroeconomics) for their classes. And there's an idea for Bernie Sanders too, who is gasping for breath on the campaign trail now: instead of promising "free tuition" handouts, how about asking government to play a role in establishing "fair tuition" (much like Medicare already does in health care for seniors) that reflects the true costs of educating students (using the latest technologies) in subjects that lead to real jobs, after universities have been forced to cut the fat (starting from the top!) out of their bloated university administrations.
- LordOfWolves 7y ago
  Unfortunately, price regulations on textbooks (however possible) would only affect the individuals "consuming" those textbooks, the majority of which are traditional students. This has been a problem for many years. Why the price of a textbook for a particular course are not paid for via the cost(s) of that particular course is beyond me. I am all for solving this problem, but it is one of many.
Red_Leaves_Flyy 7y ago
I'm sure there are many Americans for whom this would be insufficient. However, for my partner and I, and our immediate family this amount would allow all of us to keep our heads above water without catastrophic financial fallout, until society has restarted. I may be laid off this week. If I am, and if unemployment is less than 50% my expected take home, and lasts more than two months, then I am going to have to make decisions that will adversely effect my credit through no fault of my own, except not having a sufficient emergency fund built up. 1000/mo, even just for my entire household would allow us to stave off entering arrears indefinitely.
deleted 7y ago
[deleted]
29athrowaway 7y ago
Should not be for every American but rather people that need it.
- Cd00d 7y ago
  Adding 'need' criteria is likely to add bloat, expense, and hoops that people who _do_ need it will not always be able to jump through. Better to create an emergency benefit with as little bureaucracy and paperwork as possible, even if it means that some people that won't feel the impact will still benefit. We get so caught up in keeping benefits away from the wrong people that we end up simply not providing them broadly enough. It's counterproductive.
erobbins 7y ago
Honestly I'd like to see a 1 month quarantine, with the US government guaranteeing the wages of everyone in the workforce for that time. Something like 100% up to 50k/year, 75% of 50-100k, and cap it there. It would cost a few hundred billion dollars but it would keep the "I have to work or be homeless" people from being homeless and allow them to actually stay home for that time.
- ptruesdell 7y ago
  Just $10k for every full time employee in the US is over 1.3 trillion dollars, so your numbers are pretty far off.
  - erobbins 7y ago
    1 month salary for every full time employee is not anywhere near that. Especially capped at 1/12 of 100k/year
- nostromo 7y ago
  And then the virus spreads one month later.
bmj 7y ago
Romney said that the idea would "help ensure families and workers can meet their short-term obligations and increase spending in the economy." Given that many states are closing all non-essential businesses, where, exactly would the economy be stimulated? Stockpiling more toilet paper? I realize that online retailers are currently still delivering, but how long will that last?
- ianleeclark 7y ago
  If people see precarious economic conditions, they tend to save more. By having a semblance of a safety net, they're hopefully able to continue similar consumption habits. It's likely that the supply shock were seeing today will die down in a few weeks, which is when this would start to help.
ada1981 7y ago
That buys a decent amount of whiteclaw, instant lotto tickets and juul pods.
- effingwewt 7y ago
  How is that any different from it going to folks better off who don't immediately need it, and thus stash it in savings, etc.? The point is it will be going to those who need it. Please don't throw the baby out with the bath water.
  - ada1981 7y ago
    I’m actually a fan of UBI. Comment was more out of frustration as I’ve seen idiotic behavior en mass from humans.
seemslegit 7y ago
This won't help a recession one bit as it doesn't incentivize any economic activity. An average 1000$-worth of government-backed loan risk subsidy might be worth considering. With fed interest rates near-zero people with good credit should already be able to get pretty good short term loans and this will help those without a credit score or with a poor one to be able to meet their obligations.
- ianleeclark 7y ago
  > This won't help a recession one bit as it doesn't incentivize any economic activity Please explain to me how, in a country where 76% of the population lives paycheck to paycheck, putting more cash in their pocket doesn't stimulate economic activity? When someone loses hours at their job due to no customers coming through, how does making sure that person can still eat not, at bare minimum, ensure they can still eat, not help with economic activity? > With fed interest rates near-zero people with good credit should already be able to get pretty good short term loans and this will help those without a credit score or with a poor one to be able to meet their obligations. Oh, cool, we put the fuckers in debt in times of highly uncertain economic horizons, but we'll say it's helping them.
  - seemslegit 7y ago
    A subsidized loan will also put cash in their pocket, will do so more efficiently because it should only be taken out by those who need it to the extent needed. A 1000$ for the people who don't need it is basically a luxury gift in hard times.
    - ianleeclark 7y ago
      Whenever you introduce means testing, you can never claim that the people who truly need it will receive it, as you are explicitly offering avenues through which they could be excluded.
      - seemslegit 7y ago
tibbydudeza 7y ago
Well it seems a rather "socialist" a.k.a "handouts" or "welfare" which is an anathema in GOP circles. Perhaps they should do some mental gymnastics and rebrand it as "US Families First Aid".
tomcam 7y ago
I assume my curiousity will be downvoted but I ask in a totally bipartisan way: How much would it cost? I’m guessing $157 billion/month given that 157 million people are working. How would it be paid for? I assume it’s just put on the credit card with the other $23 trillion or so we’re in debt? Both parties have contributed hugely to the debt so don’t assume which side I’m on here. And while I expect to be downvoted I truly want to understand the long-term effects. Not saying I’m against it.
Proziam 7y ago
Can someone please answer this for me: Why not simply not tax individuals? Suspending mortgage payments, rents, and taxes would have a much greater benefit as far as I can tell. This topic reeks of political opportunism. It looks like everyone in favor of 'UBI' (including politicians and 'influencers') is clamoring for this despite not considering (or, in the case of the politicians, ignoring intentionally) any of the drawbacks. 1. The money isn't 'free' it's coming out of tax dollars. 2. Once a UBI concept exists, people begin to plan their lives around it. Any changes to the system that aren't increasing the amounts received then have a huge negative impact on a large population. 3. The average American household now carries significant debt, in the tens of thousands of dollars range. They won't be stimulating the economy if they are just paying back (part of) prior debts. 4. Do we seriously trust the US Government to not mess this up? California is the [0]world's fifth-largest economy and still spends more than it takes in, despite placing enormous tax burdens on its residents. The federal government hasn't been any better, historically. At what point does the economic house of cards come crashing down? Who gets crushed first if it does? [0]https://www.businessinsider.com/california-economy-ranks-5th-in-the-world-beating-the-uk-2018-5 https://www.businessinsider.com/california-economy-ranks-5th...
- j88439h84 7y ago
  Most low-income people pay 0 federal income tax already
- chadlavi 7y ago
  Or why not appropriately tax them, especially the ultra high income ones who sneak out of paying with dodgy capital gains and shell company plots, then use that money to give appropriate stimulus?
  - Proziam 7y ago
    If we assume that we need 1,000 dollars per month for every adult in the country that means we'd have to increase taxes on "the ultra-high-income" to the tune of [0]209,128,094 * 1000 = $209,128,094,000 per month. Or, $2,509,537,128,000‬ per year. We're talking about 'giving away' (using the term loosely here) 25% more than the combined market cap of FAANG every other year. Put another way, that is 76% of annual federal tax revenue at [1]current levels. No way that's sustainable. [0]https://www.infoplease.com/us/comprehensive-census-data-state/demographic-statistics-342 https://www.infoplease.com/us/comprehensive-census-data-stat... [1.1]https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762 https://www.thebalance.com/current-u-s-federal-government-ta... [1.2]https://nypost.com/2018/07/12/universal-basic-income-would-cost-taxpayers-3-8t-per-year-study/ https://nypost.com/2018/07/12/universal-basic-income-would-c...
tengbretson 7y ago
$1k per American seems laughably small. Imagine how many people we would save if we gave $100k to every American?
- magduf 7y ago
  Probably not that many, because that could result in massive inflation. Sure, QE has shown that we can print some more money and inflation isn't affected that much, but there have to be some limits to that. You can't just give everyone $1,000,000,000 (1B) and not have some huge effect on the economy from that.
  - tengbretson 7y ago
    It's not as ridiculous as it sounds. $100k per US household would only cost ~$10 trillion, which seems to be within one order of magnitude of the $1.5 trillion we just dropped without batting an eye.
    - magduf 7y ago
      Yeah, but my point is, if you take this to a ridiculous extreme ($1B per person), this would surely cause a disaster. So somewhere between 0 and this extreme, it goes from having little effect to having a big one, and I suspect it may be non-linear.
    - Twixes 7y ago
      The $1.5 trillion was in basically short term loans (bond repurchase agreements) whose purpose is to increase liquidity of financial institutions that have assets generally in investments.
davidgh 7y ago
Using the same total expenditure, quadruple the amount to $4k, give it out over 4 months ($1k per month), and only give it to those who are likely to need it (based on current income). Use 2020 income tax returns to reconcile the payments when actual income is known.

217 points by spking 7y ago

omgwtfbbqhihihi 7y ago

That will last a week at best

Jtsummers 7y ago
That depends on where you live. Prior to a recent move to a high COL area, it would've lasted me a month, with $50-100 to spare (rent, utilities, and food if I went for rice and beans and the cheapest meat I could find). Cut out the optional services (streaming services) and fuel (not driving as much, $100/month fuel cost gets reduced to maybe $20 for the isolation month), and it can work in many parts of the country. It probably wouldn't last long in San Francisco, New York, Seattle, and other high COL areas. And to make it last, you'd need roommates, which creates a hazard with regard to trying to create/enforce social distancing. But not every city or region has crazy high rent. Some places are still sane.

tjr225 7y ago

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 wife and I have a newborn, which currently isn't very expensive but we all still need to eat. The average one bedroom rental in any given metro area, even in mid sized cities, probably lands somewhere around my basic monthy costs. So, if you're a single person in the city you might get one month out of 1k$. And I am VERY lucky to have a bunch of cashed packed away. I assume at least a large portion of this country is living paycheck to paycheck.

CubsFan1060 7y ago
If they are government student loans, I think the interest on those is gone for awhile.
- tjr225 7y ago
  That also seemed like a comically paltry move. I still have to make my payments, after all! In addition my wife and I have spent the last couple of years with two incomes wiping away our student debt on high incomes in Seattle - so the only loans I have left are pretty low interest. The only way I can see this working for everyone is to simply halt the economy altogether. No mortgages, no bills, free food, free medical care. Once we get a hold on the disease itself we can deal with the economic impacts.
  - CubsFan1060 7y ago
    I suspect the interest will help some quite a bit. Not everyone, of course. I do think that the money would be better if targeted toward certain people versus peanut-buttered over everyone.
    - basch 7y ago
      But the payment doesnt go down, it just applies more to principal. It will benefit people more in the long run, but it's not short term relief.
  - fortran77 7y ago
    Of course, suspend the payments through this crisis, but why should you not owe it?
    - tjr225 7y ago
      What exactly are you trying to do here? Criticize my life choices? You don't know me or my decisions. What if I did exactly what you said but happened to fall in love with a wonderful woman who happened to have a bunch of student debt? Why should _anyone_ to be expected to pay their student loans if all of the other sectors of the economy are going to shut down? The biggest mistake I making here is even attempting to have a discussion with you. Bugger off.

vkou 7y ago

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 of the system. [1] Deferral doesn't work. A bartender living paycheque to paycheque, who lost his job because all bars were shut down is not going to be able to magic up six months of back-rent in September. His landlord won't see a penny of that owed money... But the landlord's bank will be demanding six months of mortgage payments.

simonh 7y ago
Then what happens to the people who's income depends on those rent payments. I think an approach like this makes sense. The problem is immediate cash flow for people. This is cash flowing to people. It may not be enough, but it's moving in the right direction. We're not going to re-engineer the economy in the next few weeks.
- vkou 7y ago
  > Then what happens to the people who's income depends on those rent payments. Since they also won't need to pay rent or mortgage, they won't get kicked out of their homes, too. Which is about the most that people should expect when the economy grinds to a halt. Otherwise, tough. We're in a state of emergency, that is preventing their tenants from getting paid. Just like their tenants, they'll have to deal with it. > We're not going to re-engineer the economy in the next few weeks. 1. This is not going to blow over in a few weeks. 2. We sure as hell shouldn't empty the treasury into the pockets of landlords over a few weeks. They should not be the only people to walk out of this unscathed. Suspending rents and mortgages is the only fair thing to do. It costs the state, and the taxpayers nothing, it puts everyone on an even footing, in terms of continuing to have a roof to sleep under, and it doesn't screw us six months down the road.
  - PeterisP 7y ago

vearwhershuh 7y ago

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.

Gunax 7y ago
Let's make it 10k per month, then we can all be wealthy.
- vearwhershuh 7y ago
  Obviously there is a level that makes sense and a level that does not. Using the big-bank/government debt-system to manage our money supply is no more or less free market than a citizens dividend, it just ensures that the wealthy get first dibs on the new money and then the rest of us pay interest on it. Steve Keen's idea for a modern debt jubilee is more important for the long term growth of the economy: http://www.debtdeflation.com/blogs/manifesto/ http://www.debtdeflation.com/blogs/manifesto/ I get where you are coming from, but the current system is completely out of control, as always happens with a usury-based economy.
  - clairity 7y ago
    this angle of where to inject money into the system is the only potentially reasonable argument i've heard for UBI so far (but doesn't address its many other adverse consequences). without much consideration by us commoners, we've come to accept that money must be injected into the economy through large financial institutions that gatekeep and rentseek. money is literally the intermediary for trading the fruits of labor (not capital) with each other, and the closer money is injected into the system at the point value is created (when labor turns raw materials into desirable goods), the better.
    - vearwhershuh 7y ago

Gunax 7y ago

I too think this is silly. Everyone wants to use this disaster to achieve the policy goals they wanted anyway. Republicans want to use it as an excuse for tax cuts. Democrats want to expand public healthcare and benefits. Everyone is trying to attach riders for domestic violence victims or pork spending or whatever pet issue they have. And now the Ubi folks want this. Nothing changes. Same BS.

andreilys 7y ago
What do you think will help the recovery more, QE by central banks or UBI?
- beatgammit 7y ago
  Neither? Markets have been overheated, so a correction makes a ton of sense. What we need is to get over this pandemic as quickly as possible so we can stop disrupting trade and get people back to work. The news coming out of China is encouraging, and production seems to be slowly returning to normal. Any discussion about UBI should be based on the long term merits, not a reaction to any current crisis. QE is a bit different, but honestly I think it does more harm than good much of the time, especially once it makes it through the political system.
- nostromo 7y ago
  QE tends to be net neutral financially. The Fed steps in, makes some loans or buys some securities -- when the disaster abates, they get some money back from their loans and sell the securities for a profit.
gdubs 7y ago
UBI, Tax Cuts, Social Safety Net – these are all different approaches to solving actual problems. Are politics full of pork and cynicism? Sure. But at the end of the day _something_ needs to be done, and it would be more constructive to have a rational discussion of which of the tools at our disposal stand a chance against this menace.
- 7y ago

paxys 7y ago

America's immediate priority needs to be public health, not the stock market. The economy will recover, dead people won't.

cscurmudgeon 7y ago
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.
- dumbfoundded 7y ago
  Money in our pockets would also have a direct impact us on. Why include the middleman? Let bad companies fail.
  - tathougies 7y ago
    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.
    - dumbfoundded 7y ago
      Other than the logistical difficulties specifically imposed by Covid 19, I believe good companies should be able to weather a couple of months of double-digit reductions in sales. Like if airlines or large events are forced to close down, I could see helping them. Everyone else who simply has to deal with a reduction in consumer spending should take some responsibility for overbuilding for an overheated economy. For whatever cause, the Fed has predicted a recession months ago.
  - cscurmudgeon 7y ago
    Most (all?) of the stimulus is loans that will be repaid.
- nerfhammer 7y ago

tomp 7y ago

I've been railing against this idea as uniquely stupid for the past few days. 1. For people who are living "paycheck-to-paycheck", this won't even matter. How far does $1000 get you in the US? A better policy would be a general amnesty on rent and interest payments for a few months, and temporary free healthcare. 2. For industries where it's a demand shock (e.g. travel), no amount of helicopter money will restart the demand. A better solution would be helping the companies directly, to the extent the government wants to help them survive, by e.g. tax write-offs or delays, emergency credit loans, or my favorite, emergency equity (the free-market solution, if your company cannot survive because of your poor panic, you don't deserve to own (all of) it). 3. For industries where it's a supply shock (face masks, hand sanitizers, possibly soon but hopefully not food), some kind of coupon-based rationing (with the government paying the producers directly) would be a better solution, providing just the necessities for survival and ensuring there's minimal waste.

ntsplnkv2 7y ago
On point one, that's just the thing. If I got 1000$ right now from the government, I'd pay things that I'd already have been paying anyway, or I'd save it because the economy is bad. I'd imagine most people would do something similar.
- PeterisP 7y ago
  > pay things that I'd already have been paying anyway That's kind of the point. With a nearly imminent lockdown, many people would not be able to pay for things that they have been paying all the time, and that will bankrupt companies and break the economy. A cash injection that allows you to pay for things that you're already paying for - and get the basic things you were already getting before - would be quite helpful.
  - ntsplnkv2 7y ago
    It's a one time payment. It just delays everything by a month. I fail to see how this solves the problem.

tln 7y ago

How about a $10k loan instead? Zero interest, paid back through IRS over 10 years, with decreasing amounts available based on last years income.

ytgh76 7y ago
better a perpetual with negative interest
NamTaf 7y ago
A loan may not encourage spending in the same way free, no-strings-attached money does. For example, if you're poor and struggling pay-to-pay, would you like the idea of borrowing knowing that it'll bite you later on when you have to survive on even less money due to paying back the loan? On the other hand, absolutely no-strings-attached money might see you spend it on something that you've needed for a while but haven't been able to afford.
- tln 7y ago
  Quite true, my thought was that a loan can be a larger amount. $1k one time on't change much, $10k would help people pay for food etc. It's always possible to do both. > Furman proposes Congress pass a "one-time payment of $1,000 to every adult..."
onetimemanytime 7y ago
Need based maybe. But $10K in one shot might be hard to pay and easy to spend

Ididntdothis 7y ago

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 are avoided. That’s the way to go in my view. But I guess the US will either do nothing or hand a lot of money over to the top income earners in the hope that they will “create ” jobs.

imperialdrive 7y ago
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 7y ago
  [deleted]
dlhavema 7y ago
About 80% of Americans live paycheck to paycheck. So you are in the minority [1] https://www.cnbc.com/amp/2019/01/09/shutdown-highlights-that-4-in-5-us-workers-live-paycheck-to-paycheck.html https://www.cnbc.com/amp/2019/01/09/shutdown-highlights-that...
kevin_thibedeau 7y ago
> hand a lot of money over to the top income earners They just got their loan interest rates reduced. All with a nice excuse to cover for it.
mattmanser 7y ago
This is classic "me and my friends are rich, therefore everyone else is". You just don't realize you're in the top 10-20% of earners, and the difficulties of those underneath you.

the_watcher 7y ago

> 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.

macinjosh 7y ago

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.

Jtsummers 7y ago
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.
- belltaco 7y ago
  I think the IRS is much better set up for this than state run welfare programs. Send a check out to everyone now but collect $950 more in taxes next year from only folks that made more than $XX,XXX amount of money in 2020. Also you could make it so that uncashed checks would be cancelled by next year and you get a $50 extra refund.
- macinjosh 7y ago
  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)
- NamTaf 7y ago
  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.

lsllc 7y ago

I think something like a $10K tax rebate per person would be more appropriate. 1. It'll help people cover their bills 2. It'll put a shit-ton of money out to help reboot the economy when this all blows over.

xyzzyz 7y ago
Tax rebate doesn’t help if you don’t pay any tax, and if you’re out of work, you’re also not paying tax. For example, if you normally make the median income of $30k, but quarantine put you out of work for 3 months, you’re down to $22,500, your federal tax bill is ~$2700, and so this is most you can get from tax rebate. If you have children, this is even lower. While I agree that tax rebates are typically correct approach, here it’s not the case: they won’t help much those who most need it, and they’ll help most those who don’t need them at all.
- refurb 7y ago
  Then make it a tax credit. Regardless of what you pays in tax (it could be zero) you’ll get $X amount as a direct credit.
- lsllc 7y ago
  Right, tax credit then.

maximente 7y ago

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 them financially, no questions asked. that will draw a fair amount of outrage, i assume, given that the US can't even get that done for older and poorer people. that's why i think if you buy in to UBI, you sort of need whatever else Yang brought with it - measuring societal value differently, etc. otherwise you are looking at a situation where certain persons are going to be portrayed as truly valueless, bc in the US the economy dominates so much. and i don't think that bodes well for those people.

jawns 7y ago
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.
- ThrowawayR2 7y ago
  Any form of entertainment is going to feel empty eventually and then you're right back at square one. A universal jobs program makes more sense as a form of containment; it needn't even be particularly onerous.
overthemoon 7y ago
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.

ouid 7y ago

It's looking to me like the only way to fight the coronavirus recession is to have a strong enough testing capacity that we can be relatively sure that the people we are interacting with in the world do not have the virus.

salimmadjd 7y ago

Congresswoman Tulsi Gabbard put a bill last week on the house. https://www.congress.gov/bill/116th-congress/house-resolution/897/text?r=5&s=1 https://www.congress.gov/bill/116th-congress/house-resolutio...

wallflower 7y ago

The $1.5T injection would have been about 5 months of $1,000 UBI.

refurb 7y ago
Except the $1.5B injection was a loan, not an actual expenditure.

TheFiend7 7y ago

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.

AnthonyMouse 7y ago
> Any form of UBI should 1000% be in the form of benefits, goods, housing, or other physical goods. We've tried this and it's a dumpster fire. The government builds low income housing which is 100% people in poverty and it turns into a slum. The government subsidizes home loans and student loans and it raises the cost of housing and education. The government subsidizes food and then restaurant workers who already have access to food can't use the money to fix their car or whatever it is they really need right now. People know what they need better than bureaucrats do. If you give them money and they need food, they buy food. If you give them money and they need transportation, they buy transportation. If you give them food and they need transportation, you messed up, which is what consistently happens in practice when you don't give them money.
- TheFiend7 7y ago
  Fair but you just completely ignored the second half of my comment. Instead of handing out money, don't take it in the first place?
  - AnthonyMouse 7y ago
    In general that's just the same thing. If the per capita average cost of providing roads and schools etc. is $15,000/year then anybody you're taxing less than $15,000/year is really getting a subsidy in the amount of the difference. They get roads and schools and pay less in tax than they cost and the other taxpayers have to pick up the tab. Nothing about that changes at the point where the amount of "tax" someone pays goes negative. They started getting a subsidy from other taxpayers when they paid less than $15,000, not when they paid less than $0. So if you want to call a UBI a "tax credit" then go ahead, but changing the name to "tax credit" makes no mathematical or economic difference at all.

skandl 7y ago

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.

FabHK 7y ago

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.

maliker 7y ago

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.

strunz 7y ago
Wasn;t it determined that no one actually spent that money and just paid of debt instead?
- jfengel 7y ago
  Not no one, but few. That's what the National Bureau of Economic Research concluded: https://www.nber.org/papers/w15421 https://www.nber.org/papers/w15421 "Only about one-fifth of respondents in the Reuters/University of Michigan survey report that the 2008 tax rebates led them to mostly increase spending, while over half said it would lead them to mostly pay off debt... [T]he results imply that the rebates provided only a modest stimulus to spending per dollar of rebate."

fxtentacle 7y ago

I predict that Americans hate their less wealthy fellow citizens way too much for this to ever turn into reality.

trophycase 7y ago

Nope, as pointed out by others. This doesn't do anything to solve the systemic problems that allowed this to happen and us to be woefully unprepared for this.

georgemcbay 7y ago
I don't have any specific opinion on if the proposed action would be a good or a bad thing (I'm not an economist or policy-wonk type), but it seems silly to me to dismiss actions taken in a crisis just because they don't solve the systemic problems that caused the situation. Sometimes you need to stem the bleeding to buy yourself enough time to fix the underlying problem.

missedthecue 7y ago

I think this is silly. The idea behind this is to induce demand, but there isn't a lack of demand due to lack of purchasing power. People aren't spending because they aren't leaving the house. (which, in the case of a pandemic, is a thing to be encouraged) I sincerely doubt that giving everyone a thousand bucks will save the restaurants and bars and movie theaters and retailers and cruise ships and hotels and airlines etc...

vishaalk 7y ago
People lost their jobs and therefore their income, so there was a material loss in demand.
xxandroxygen 7y ago
You're right, a thousand bucks a person won't save those things. But the people who /were/ working at those restaurants/bars/etc now have a way to buy food for the month. People aren't leaving the house but they sure still need to spend on food, rent, basics.

giarc 7y ago

This method is good when you want people to go out and shop and spend the money. What happens when millions of American's now have money to go out and eat and go on vacation? That's the opposite of what we want.

zbyte64 7y ago

Or we could provide universal healthcare, but that would be crazy.

jakearmitage 7y ago
How would that help at this point in time? Italy has universal health and it is not helping. UBI, on the other hand, could make an impact.
- foldr 7y ago
  >Italy has universal health and it is not helping You can't just sat that universal health care isn't helping in Italy because things are bad there. Things might be even worse if Italy didn't have universal health care.
jkingsbery 7y ago
As we are all being reminded now, healthcare is a good with a fixed capacity. We still need some way to decide who gets access to the capacity. But even if we did provide universal healthcare, people who aren't working run the risk of losing their homes, access to food, and other necessities, so providing universal healthcare would only solve part of the problem that's being proposed.
jpindar 7y ago
Right now, being able to stay in your home IS healthcare.

malandrew 7y ago

My guess is that most of this money would be spent on businesses that are still operating, which means that those businesses that are hurting the most, because they are shut down, wouldn't see much or any of this stimulus.

Proven 7y ago

Universal weapon, huh? Why not 5K or 100K? Why not give free money to illegal immigrants, or better, to the entire world? Every dollar you print out of nothing is stolen from the savers who worked for it.

danellis 7y ago

Misleading headline. The proposal is actually for "every adult who is a U.S. citizen or a taxpaying U.S. resident".

timwaagh 7y ago

They tried that in Iran. The result: massive inflation. The system cannot handle such a massive spike in demand especially if production is under strain from covid. It surprises me Romney is for it because he was a politician back when ahmedinejad tried that little stunt.

throw0101a 7y ago
When has Iran not have massive (>10%) inflation? * https://tradingeconomics.com/iran/inflation-cpi https://tradingeconomics.com/iran/inflation-cpi Not since at least 1970 AFAICT.
Mountain_Skies 7y ago
Romney and economic disaster for the working class seem to go hand in hand.

selfishgene 7y ago

I like how Mankiew nonchalantly remarks that $1000 "sounds about right." Wonder if he consulted any of the models in his widely used Macroeconomics textbook in order to reach this profound conclusion. I think an even better way to help people right now would include Congress putting an end to the price gouging of students who are forced to pay as much as $200 dollars a pop to purchase textbooks (like Mankiew's Macroeconomics) for their classes. And there's an idea for Bernie Sanders too, who is gasping for breath on the campaign trail now: instead of promising "free tuition" handouts, how about asking government to play a role in establishing "fair tuition" (much like Medicare already does in health care for seniors) that reflects the true costs of educating students (using the latest technologies) in subjects that lead to real jobs, after universities have been forced to cut the fat (starting from the top!) out of their bloated university administrations.

LordOfWolves 7y ago
Unfortunately, price regulations on textbooks (however possible) would only affect the individuals "consuming" those textbooks, the majority of which are traditional students. This has been a problem for many years. Why the price of a textbook for a particular course are not paid for via the cost(s) of that particular course is beyond me. I am all for solving this problem, but it is one of many.

Red_Leaves_Flyy 7y ago

I'm sure there are many Americans for whom this would be insufficient. However, for my partner and I, and our immediate family this amount would allow all of us to keep our heads above water without catastrophic financial fallout, until society has restarted. I may be laid off this week. If I am, and if unemployment is less than 50% my expected take home, and lasts more than two months, then I am going to have to make decisions that will adversely effect my credit through no fault of my own, except not having a sufficient emergency fund built up. 1000/mo, even just for my entire household would allow us to stave off entering arrears indefinitely.

deleted 7y ago

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29athrowaway 7y ago

Should not be for every American but rather people that need it.

Cd00d 7y ago
Adding 'need' criteria is likely to add bloat, expense, and hoops that people who _do_ need it will not always be able to jump through. Better to create an emergency benefit with as little bureaucracy and paperwork as possible, even if it means that some people that won't feel the impact will still benefit. We get so caught up in keeping benefits away from the wrong people that we end up simply not providing them broadly enough. It's counterproductive.

erobbins 7y ago

Honestly I'd like to see a 1 month quarantine, with the US government guaranteeing the wages of everyone in the workforce for that time. Something like 100% up to 50k/year, 75% of 50-100k, and cap it there. It would cost a few hundred billion dollars but it would keep the "I have to work or be homeless" people from being homeless and allow them to actually stay home for that time.

ptruesdell 7y ago
Just $10k for every full time employee in the US is over 1.3 trillion dollars, so your numbers are pretty far off.
- erobbins 7y ago
  1 month salary for every full time employee is not anywhere near that. Especially capped at 1/12 of 100k/year
nostromo 7y ago
And then the virus spreads one month later.

bmj 7y ago

Romney said that the idea would "help ensure families and workers can meet their short-term obligations and increase spending in the economy." Given that many states are closing all non-essential businesses, where, exactly would the economy be stimulated? Stockpiling more toilet paper? I realize that online retailers are currently still delivering, but how long will that last?

ianleeclark 7y ago
If people see precarious economic conditions, they tend to save more. By having a semblance of a safety net, they're hopefully able to continue similar consumption habits. It's likely that the supply shock were seeing today will die down in a few weeks, which is when this would start to help.

ada1981 7y ago

That buys a decent amount of whiteclaw, instant lotto tickets and juul pods.

effingwewt 7y ago
How is that any different from it going to folks better off who don't immediately need it, and thus stash it in savings, etc.? The point is it will be going to those who need it. Please don't throw the baby out with the bath water.
- ada1981 7y ago
  I’m actually a fan of UBI. Comment was more out of frustration as I’ve seen idiotic behavior en mass from humans.

seemslegit 7y ago

This won't help a recession one bit as it doesn't incentivize any economic activity. An average 1000$-worth of government-backed loan risk subsidy might be worth considering. With fed interest rates near-zero people with good credit should already be able to get pretty good short term loans and this will help those without a credit score or with a poor one to be able to meet their obligations.

ianleeclark 7y ago
> This won't help a recession one bit as it doesn't incentivize any economic activity Please explain to me how, in a country where 76% of the population lives paycheck to paycheck, putting more cash in their pocket doesn't stimulate economic activity? When someone loses hours at their job due to no customers coming through, how does making sure that person can still eat not, at bare minimum, ensure they can still eat, not help with economic activity? > With fed interest rates near-zero people with good credit should already be able to get pretty good short term loans and this will help those without a credit score or with a poor one to be able to meet their obligations. Oh, cool, we put the fuckers in debt in times of highly uncertain economic horizons, but we'll say it's helping them.
- seemslegit 7y ago
  A subsidized loan will also put cash in their pocket, will do so more efficiently because it should only be taken out by those who need it to the extent needed. A 1000$ for the people who don't need it is basically a luxury gift in hard times.
  - ianleeclark 7y ago
    Whenever you introduce means testing, you can never claim that the people who truly need it will receive it, as you are explicitly offering avenues through which they could be excluded.
    - seemslegit 7y ago

tibbydudeza 7y ago

Well it seems a rather "socialist" a.k.a "handouts" or "welfare" which is an anathema in GOP circles. Perhaps they should do some mental gymnastics and rebrand it as "US Families First Aid".

tomcam 7y ago

I assume my curiousity will be downvoted but I ask in a totally bipartisan way: How much would it cost? I’m guessing $157 billion/month given that 157 million people are working. How would it be paid for? I assume it’s just put on the credit card with the other $23 trillion or so we’re in debt? Both parties have contributed hugely to the debt so don’t assume which side I’m on here. And while I expect to be downvoted I truly want to understand the long-term effects. Not saying I’m against it.

Proziam 7y ago

Can someone please answer this for me: Why not simply not tax individuals? Suspending mortgage payments, rents, and taxes would have a much greater benefit as far as I can tell. This topic reeks of political opportunism. It looks like everyone in favor of 'UBI' (including politicians and 'influencers') is clamoring for this despite not considering (or, in the case of the politicians, ignoring intentionally) any of the drawbacks. 1. The money isn't 'free' it's coming out of tax dollars. 2. Once a UBI concept exists, people begin to plan their lives around it. Any changes to the system that aren't increasing the amounts received then have a huge negative impact on a large population. 3. The average American household now carries significant debt, in the tens of thousands of dollars range. They won't be stimulating the economy if they are just paying back (part of) prior debts. 4. Do we seriously trust the US Government to not mess this up? California is the [0]world's fifth-largest economy and still spends more than it takes in, despite placing enormous tax burdens on its residents. The federal government hasn't been any better, historically. At what point does the economic house of cards come crashing down? Who gets crushed first if it does? [0]https://www.businessinsider.com/california-economy-ranks-5th-in-the-world-beating-the-uk-2018-5 https://www.businessinsider.com/california-economy-ranks-5th...

j88439h84 7y ago
Most low-income people pay 0 federal income tax already
chadlavi 7y ago
Or why not appropriately tax them, especially the ultra high income ones who sneak out of paying with dodgy capital gains and shell company plots, then use that money to give appropriate stimulus?
- Proziam 7y ago
  If we assume that we need 1,000 dollars per month for every adult in the country that means we'd have to increase taxes on "the ultra-high-income" to the tune of [0]209,128,094 * 1000 = $209,128,094,000 per month. Or, $2,509,537,128,000‬ per year. We're talking about 'giving away' (using the term loosely here) 25% more than the combined market cap of FAANG every other year. Put another way, that is 76% of annual federal tax revenue at [1]current levels. No way that's sustainable. [0]https://www.infoplease.com/us/comprehensive-census-data-state/demographic-statistics-342 https://www.infoplease.com/us/comprehensive-census-data-stat... [1.1]https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762 https://www.thebalance.com/current-u-s-federal-government-ta... [1.2]https://nypost.com/2018/07/12/universal-basic-income-would-cost-taxpayers-3-8t-per-year-study/ https://nypost.com/2018/07/12/universal-basic-income-would-c...

tengbretson 7y ago

$1k per American seems laughably small. Imagine how many people we would save if we gave $100k to every American?

magduf 7y ago
Probably not that many, because that could result in massive inflation. Sure, QE has shown that we can print some more money and inflation isn't affected that much, but there have to be some limits to that. You can't just give everyone $1,000,000,000 (1B) and not have some huge effect on the economy from that.
- tengbretson 7y ago
  It's not as ridiculous as it sounds. $100k per US household would only cost ~$10 trillion, which seems to be within one order of magnitude of the $1.5 trillion we just dropped without batting an eye.
  - magduf 7y ago
    Yeah, but my point is, if you take this to a ridiculous extreme ($1B per person), this would surely cause a disaster. So somewhere between 0 and this extreme, it goes from having little effect to having a big one, and I suspect it may be non-linear.
  - Twixes 7y ago
    The $1.5 trillion was in basically short term loans (bond repurchase agreements) whose purpose is to increase liquidity of financial institutions that have assets generally in investments.

davidgh 7y ago

Using the same total expenditure, quadruple the amount to $4k, give it out over 4 months ($1k per month), and only give it to those who are likely to need it (based on current income). Use 2020 income tax returns to reconcile the payments when actual income is known.