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Giving Americans Money to Offset Coronavirus Impact Gains Support in Congress

268 points by spking 7y ago

Zenst 7y ago
Last global pandemic of most compare - the Spanish Flu, we had a society that was savings conscious. Past few decades have seen a turn towards interest rates so low that borrowing over saving has prevailed. So whilst this may help a little and more so for some, it will do nothing for many who are debt rolling from one payday until another. That without intervention upon loans and debt repayments over this period will cause more chaos and impact. Though most will need fuel, food and essentials in this time, might be better if you had those delivered to those who are stuck and in direct need. Otherwise, I wouldn't be supprised if ration books become norm for a period soon. Certainly for toilet roll.
- pbourke 7y ago
  > Last global pandemic of most compare - the Spanish Flu, we had a society that was savings conscious. Also a society that was emerging from WWI. The mindset was different.
- dhosek 7y ago
  Savings rates have been going up over the last decade. Some data is available here: https://www.motherjones.com/kevin-drum/2020/03/can-personal-savings-rescue-us-from-an-upcoming-recession/ https://www.motherjones.com/kevin-drum/2020/03/can-personal-...
  - Zenst 7y ago
    WOW, how the interest rate can be higher than the base rate is somewhat interesting. Meanwhile in the UK and many other places the saving interest rate is way closer to the base rate and usually less than that. It's almost as if you could borrow cheap and get interest higher than the interest on the loan, alas an avenue that for many is not as easily accessible, but if you have money, you can make money.
23B1 7y ago
https://petitions.whitehouse.gov/petition/suspend-mortgage-payments-and-interest-until-coronavirus-pandemic-has-passed https://petitions.whitehouse.gov/petition/suspend-mortgage-p... 3 signatures so far. If the housing market, core to our economy, can be insulated from a crash rebuilding will be significantly easier.
- droptablemain 7y ago
  Has the current administration ever bothered to respond to any of those?
- baybal2 7y ago
  I think housing market in USA seriously needs a healthy correction to make housing available to masses again
  - save_ferris 7y ago
    Yeah, but if that happens, the economic factors leading to a housing crash (i.e. mass unemployment) will almost certainly also prevent most people who need affordable housing from being able to purchase it.
    - JMTQp8lwXL 7y ago
      All else equal, getting rid of superfluous zoning rules that are preventing new construction and thereby lowering prices, wouldn't harm those who close to being able to afford housing today. Relaxing zoning doesn't hurt the economy. If anything, restricted zoning limits the economic growth we need.
      - save_ferris 7y ago
        That I completely agree with. It just sounded like the parent suggested that a housing crash would somehow make real estate affordable for everyone, which clearly isn't the case, based on what happened in 2008.
  - 7y ago
sethammons 7y ago
Instead of giving money, why not suspend debt payments and interest growth?
- andylei 7y ago
  because some people might need to buy food
  - deleted 7y ago
    [deleted]
- graeme 7y ago
  The debt payments go to someone. Suspending those still creates a cashflow hole. I haven’t fully thought through the effects of handing out cash, just wanted to point out that suspending debts isn’t costless. Landlords would reduce spending, and banks might slip into crisis. And what of those with no debt, but who can’t work due to virus? Or those with debt, but who can’t work? They still need to eat.
- davis_m 7y ago
  Does it have to be one or the other?
- koheripbal 7y ago
  Because then the banks will go under. The government isn't the recipient of loan payments.
  - tlbsofware 7y ago
    Hmm unless they buy the loans and we have to pay the government for that... doesn’t sound like it would work but I’m curious of what the economists here think of that
- rjsw 7y ago
  I suspect it will need a bit of both.
- 7y ago
samsquire 7y ago
The case for unconditional basic income has never been stronger. Especially with disease precluding work.
- seneca 7y ago
  I'm curious, in current proposals, would a UBI be limited to citizens only? I'm guessing not, given the "universal" nature of it. If that's the case, I can't say I see support for a UBI gaining wide-spread support, or economic viability, in the US without first securing our boarders. It seems mutually exclusive, given that it would result in an unprecedented flood of economic migrants. I may be misunderstanding the scope of "universal" in this context. If that's the case, I'm curious what the typical requirements for access are.
  - badestrand 7y ago
    I have never seen a proposal for UBI that is not limited to citizens. You obviously have to draw a line somewhere and obviously you would not give money to tourists. Maybe long term residents could be included though, e.g. those who live 5+ or 10+ years in the country.
  - tlbsofware 7y ago
    They would need some sort of registered paperwork to guarantee that some aren’t being double paid. On Wikipedia it mentions legal residents so my guess is it would extend to work visas too possibly
  - eatbitseveryday 7y ago
    Andrew Yang’s proposal was targeting UBI at American adults[1] which means citizens. [1] https://www.yang2020.com/what-is-freedom-dividend-faq/ https://www.yang2020.com/what-is-freedom-dividend-faq/
    - seneca 7y ago
      Thanks for the reference, that's a very succinct explanation. For those on mobile, here's the answer from Yang's plan: > Every U.S. citizen over the age of 18 would receive $1,000 a month, regardless of income or employment status...
eagsalazar2 7y ago
Should also include suspension of residential rent payments. Otherwise renters are accumulating debt during the crisis (at best) which will also drag the economy and housing market down.
duxup 7y ago
Economics is an interesting field of study with what seems like endless amount of differing views and such. However, it seems that if you're looking for economic stimulus one of the most sure fire ways / proven ways / agreed upon ways to get bang for the buck is to give poor people money. Poor people will spend it, and you can be pretty dang sure they'll put that money into the economy and quickly. I'm all for it.
- abfan1127 7y ago
  The most important aspect of the claim about spending money is the broken window fallacy. Henry Hazlitt wrote a great book on the subject called Economics in One lesson. The simple example is that we can't go around breaking windows to stimulate the economy. Sure, the window manufacturer and the window replacement companies might benefit, however that money which went towards the window could have gone elsewhere. Engineering taught me one very important lesson. We can never get something for nothing. There is always a trade off. If the government is handing out money, it has to come from somewhere. Its either taxes, which means that tax money collected can't be spent elsewhere. Or it has to be printed, which is inflation. Some people say, people aren't spending it, they are saving it! Thats important too. Unless they are keeping it in their mattress, that money is deposited in banks, which loan out the money for capital improvements, etc. Lastly, my anecdotal experience is that "free money" tends to be squandered more than earned money. Which means poorly allocated funds towards resources less valuable to a strong economy.
  - minikites 7y ago
    >The simple example is that we can't go around breaking windows to stimulate the economy. Sure, the window manufacturer and the window replacement companies might benefit, however that money which went towards the window could have gone elsewhere. The "windows" in this metaphor are already broken by the coronavirus. Our only choice now is how soon to fix them and which windows get fixed first. >Unless they are keeping it in their mattress, that money is deposited in banks, which loan out the money for capital improvements This isn't borne out by evidence, banks refused to lend during the 2008 recession.
  - 7y ago
shartshooter 7y ago
As long as the money is given to folks who need and/or will spend it, it feels like this is the exact situation where the federal government steps in for stimulus. There’s no pull yourself up by your bootstraps talk right now and there shouldn’t be. I know the single parent working a couple of jobs will spend every dime they’re given in a time like this, just to survive. A yuppie like me would just park it in my savings account until I feel we hit bottom, then invest it. I’m not the type of person you want to give money like this to. Save it for folks who are really living hand-to-mouth and don’t shortchange them.
- ed312 7y ago
  It is impossible to know from demographic information alone exactly how people will spend a windfall. If we're doing helicopter money, we should do it for everyone equally. Maybe instead of food I buy a bunch of video games or beer or some other good. Still keeping the economic engine running.
  - MiroF 7y ago
    I think that we can assume that for people worth low income, savings rates will be much lower than for richer people. Sure, we can't "exactly" know from demographic information, but the fact that if you have a higher income you have a higher savings rate is pretty basic.
  - mtberatwork 7y ago
    Why not do a progressive amount based on income (available from the IRS)? Those in higher income brackets would receive less, while those in lower income brackets would receive more.
    - ed312 7y ago
      Because some people live in very high cost of living areas - high income alone is not sufficient. Ultimately if you don't hand out the benefit equally you're making some kind of value judgement: you ought to live this way, and not this way, to be worthy of support from the government. This is a _hard_ problem to even quantify. The real goal here is to keep the economic engine running (even on idle). Adding a political dimension will only slow down or block this, which will hurt everyone.
pingyong 7y ago
Hmm. A lot of businesses will get into big trouble over the coming weeks and potentially months. Bars, event organizers, even shopping malls. They're all going to go down to almost zero profit for a while. The problem is if you just give people money right now, they literally can't spend it on those things because they are or will be closed during that time. Money isn't the reason they're not going, Corona is. The money would be spent on things that are doing well now anyway (rent, food and netflix/videogames/etc.). Maybe right now the focus should be on not making people homeless, but then giving people money after the crisis so they can spend it in the industries that are suffering right now.
- nathancahill 7y ago
  > almost zero profit Almost zero revenue. Negative profit.
  - whatshisface 7y ago
    There are going to be a lot of interesting conversations with landlords in the coming months. "If you make me pay rent, I won't be around when the crisis is over. If you let me off paying rent, I will get back in business and start paying rent again faster than any other way you could fill my space."
- mtberatwork 7y ago
  The workers at these establishments, especially those whose income is tied to tips, will certainly need this extra money for rent, food, etc.
  - pingyong 7y ago
    Some absolutely will. That's not really what I'm trying to argue against, people who would become homeless or starve should absolutely be helped. However, a lot of people seem to be under the impression that this would boost the economy (because the idea is that almost everyone gets money so they can spend it instead of specifically helping with rent or food), which I don't think it will currently, or at least it won't in a meaningful way that helps the businesses who need it.
alecco 7y ago
Actions have consequences. Your income and your future pension are going to pay for this in one way or another.
- tryptophan 7y ago
  I think this is one of these situations in which doing nothing has a higher cost than doing something, even if that something(give people money for free) is generally bad in most circumstances.
  - alecco 7y ago
    The goal is to make the economy to recover quickly. Fail fast, learn the lesson, make things cheap and keep unemployment low. Or do something against centuries of experience and see what happens. Avoiding short-term pain by trading it for a much worse problem later is what made us so vulnerable to a not-so-deadly virus. Zombie too big to fail banks and corporations and a real estate market out of control. Same happened everywhere, not just US.
- cultus 7y ago
  Great, we'll just have tens of millions of new homeless then.
  - alecco 7y ago
    It's not the only possible measure to handle the problem.
- decebalus1 7y ago
  we don't have a functioning nation-wide social safety net. Some say it's the price we pay for innovation and market driven prosperity. That's fine, I guess. But I'd rather pay for this in the future than having to deal with rioters and looters now. Not to mention living in a healthy and civil society where people don't have to worry about the first level in Maslow's pyramid of needs. There was a quote about being X meals away from anarchy.
- 7y ago
deleted 7y ago
[deleted]
nimbius 7y ago
hey i remember when we did this in 2008. There was a huge economic meltdown, I just lost my job and was living out of my truck, and the Republican party wasnt looking like a real winner in the upcoming election. So it was decided that everyone gets a "stimulus check." I got $700 from the Republican party...and it basically felt like $700 to keep my mouth shut about how Bush didnt care to find Osama Bin Laden. it was a few hundred and in return i was expected to stop complaining about how TARP bailed out big banks but left me living in a stale coffee scented Dodge Ram. I am a little bitter about the whole gesture but let me tell you what I spent that money on: credit card debt. Now here we are in 2020 and the Republican party is looking at cutting checks for everyone again and I gotta wonder why. What is this really hoping to achieve? Write me a check and in return I stop complaining about how my health insurance doesnt cover a flu shot? or how the country has more prison beds than hospital beds? That basically everything the president promised he'd do he either ignored or buck-passed to Obama? I dont want corona cash. I want an economy that doesnt shit the bed like clockwork every ten years and send me out looking for handyman jobs. Id like a healthcare system that doesnt include ambulance rides that are as expensive as a used car.
dpcan 7y ago
Chasing our own tails. If this virus does very little to zero damage in the US, I’m afraid it will become the worst “cry wolf” situation in the history of humanity.... when the truly dangerous bug arrives.
- unknown_library 7y ago
  If it does very little damage, then mission accomplished.
  - dpcan 7y ago
    Yes, I am 100% on board with this. Nothing happens is exactly what we want, and WHY we are doing what we are doing. But there are too many people in this world that are painfully illogical and will think it's a "hoax" or "fake" if nothing actually happens.
- pbourke 7y ago
  Even if the US had a magical force field that kept the virus out, it would still do a considerable amount of damage. The supply disruptions that hit China are now moving to the rest of the world. The largest companies in the US do a large amount of foreign business - I’ve heard up to 40% or so of the revenue of the S&P 500 comes from outside of the US.
starpilot 7y ago
/r/titlegore
throwaway5752 7y ago
We have this already. It's called unemployment. We don't need stimulus for people with existing paychecks. We need conditions and durations on unemployment temporarily lifted, some for of access for self-employed or under-the-table workers, and some form of block grants for companies that would otherwise face bankruptcies (which would cascade) and and obviously enormous increases in funding that would be required by this. edit: why am I downvoted? The problem is not giving extra money to those with jobs, the problem is giving money to those without jobs.
- throwanem 7y ago
  I don't know why you're downvoted, but unemployment is a state-level program. This is a national problem and merits a federal response.
  - throwaway5752 7y ago
    Yes, and this begs the question of what will happen with state budgets, many of which have balanced budget amendments and have no legal flexibility to deal with this. The answer is federal block grants to backstop national unemployment changes. Removing waiting periods and extending benefits indefinitely is essentially temporary UBI, which is what we need. So yes, this form of changes to unemployment would _require_ a federal response. And we require far more federal response than that, far far more. But payroll tax holidays and $1000/adult responses are not serious policy and waste invaluable time.
reaperducer 7y ago
I've heard people say this won't change anything, and that rich people will just use it to buy gold-plated toilets while poor people will use it to buy meth waffles. I remember the last time everyone got checks from the government.† The $1,200 I got was enough to keep my family from living under a bridge. There are tens of millions of people living paycheck-to-paycheck, so even if this helps some people, I'm in favor of it. † https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008 https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008
- choward 7y ago
  It's funny how much people can be influenced by the media and other people without any actual facts. Who cares what rich people do with the money? And not everyone is poor because they are drug addicts. "If we just give everyone money what incentive is their to work?" That's another one of my favorites.
francisofascii 7y ago
Sitting at home reading a book may not feel like a real job, but it is a job! In this unique situation, the government is asking/requiring people to stay home and alter behaviors. It is not a free handout for doing nothing. People giving up jobs and staying home and doing nothing is serving a purpose of not spreading the virus. People should be compensated for that service.
- fma 7y ago
  Yep that is part of Yang's policy. Human value vs economic value. Right now our economy doesn't value human life. A stay at home parent who looks after the kids is judged as 0 economic value but raising productive children provides great value to society. For today... as a human you are very valuable if you stay the hell home.
9uq34aofgh 7y ago
The media/political response is a giant hoax. Read the source paper from the CDC our corporate and political leaders are using to justify the panic: https://www.cdc.gov/mmwr/volumes/66/rr/rr6601a1.htm https://www.cdc.gov/mmwr/volumes/66/rr/rr6601a1.htm and appendix 5 https://stacks.cdc.gov/view/cdc/44314 https://stacks.cdc.gov/view/cdc/44314 From the evidence section of appendix 5: "Mandatory quarantine delayed the peak of the pandemic, but when cost was taken into account, mandatory quarantine was not an economically effective intervention against the 2009 H1N1 pandemic" Isolations only delay the peak, they don't prevent it, and the wreak havoc on the economy. Plus all the curve flattening talk are just poorly written computer simulations. Zero evidence it will happen. From the paper here are the key objectives of isolation, none of which apply to covid-19 in the USA (unless hospitals are adding tens of thousands of new beds, respirators, and nurses in the next few weeks). "Objective 1: To gain time for an initial assessment of transmissibility and clinical severity of the pandemic virus in the very early stage of its circulation in humans (closures for up to 2 weeks) Objective 2: To slow down the spread of the pandemic virus in areas that are beginning to experience local outbreaks and thereby allow time for the local health care system to prepare additional resources for responding to increased demand for health care services (closures up to 6 weeks) Objective 3: To allow time for pandemic vaccine production and distribution (closures up to 6 months)"
- cliffy 7y ago
  Of course you're some newly created sock-puppet account too afraid to post under your real handle. COVID-19 will absolutely cause the death of millions in the US alone if proper steps aren't taken to reduce R0. If not from the disease itself, then from hospitals being completely overloaded. Edit: Let's be real: lockdown/isolation is going to have to persist for at least a month or more to have a real chance of preventing the spread to most of the population in the US. 2 weeks is not going to cut it.
  - 9uq34aofgh 7y ago
    Not a sock-puppet. Where's the evidence isolations will flatten the curve and not just cause another spike of cases after isolation ends? Covid-19 isn't going to die out after a few weeks or months. Deaths are coming from ages 70+ with severe pre-existing conditions during non-peak hospital conditions. This is normal and nothing to panic about. Also, do R0 values of a virus change dramatically? I thought they were set based the number of non-vaccinated people who get infected...
runawaybottle 7y ago
How does direct cash help the underlying problem? People can’t go outside and do stuff. We need loans for businesses and relief for companies to weather a pause (so layoffs and closings are mitigated).
- glitcher 7y ago
  It is not meant to fix the underlying problem. It is meant to help those in need buy essential items like food and medicine, and possibly even pay their rent, but it probably won't be enough for even that when your family needs to eat first. I think direct cash to individuals is only one small part of the bigger picture though. And to your point, businesses are going to need help too. It's not a matter of choosing only one or the other path, but finding a balance employing multiple strategies simultaneously.
etxm 7y ago
Honest question, not an economist. How would giving everyone money impact inflation? Is giving money the same thing as “printing money?”
- wmeredith 7y ago
  Giving money != printing money. If I give you $20 that doesn't mean I fabricated the bill myself. The money could come from any numbers of places in the vast Federal budget.
  - megous 7y ago
    The budget already has a huge deficit. They'd have to cut funding to something, in order not to increase it further. Or they could add it to the deficit (which means borrowing the money), and that translates to higher inflation, pretty much, as banks create the borrowed money. Recent lowering of the interest rates by the FED also plays into this. I think any kind of stimulus will almost certainly translate to higher inflation. It's not necessarily bad. It's a bit of an equalizer. You give money to everyone, money loses value somewhat, but only the people who have the most money at the moment, will suffer from the inflation in absolute terms (money received vs value of savings lost).
- 6gvONxR4sf7o 7y ago
  Typically it's redistribution. If you combine a progressive tax with a flat handout, you're basically taking from the rich and giving to the poor.
mythrwy 7y ago
I feel we need to do something along these lines for the immediate, but at the same time wonder if it's practically possible to give enough money to actually matter. To me it seems this crisis is exposing several fallacies underlying our civilization. 1) The idea that infinite debt based economic growth is workable long term. 2) The notion that somehow we can beat natural evolution and selection long term with science. Both of these ideas work very well in the narrow slice of human history we have lived in, but longer term maybe are just fallacies.
deleted 7y ago
[deleted]
jordanpg 7y ago
The assume that form that this would actually take would likely be promised 2020 or 2021 tax credits -- anything else would be logistically too slow. This form is only useful to people who already have cash or ready credit available. Not obvious to me that this would help the many millions who need cash to spend right now.
veeralpatel979 7y ago
Just curious: will this help the economy recover, when for large parts of it (entertainment, dining, travel, etc) the reason it's closed is due to the virus and not due to lack of money?
Entalpi 7y ago
I am sorry but how is this a reasonable idea, instead of you know making paternal/maternal leave state, health care system and salary insurance program government funded? Temporary economic injections will not transform peoples lifes nor save them from an unsustainable lifestyle.
nvusuvu 7y ago
Why can't we collectively say, no Americans have to pay mortgages/rent for x months. No small/medium sized businesses have to pay business loans for x months. Everyone focus on social distancing and making sure everyone has food and shelter. Weather this out, and start back up after peak infections/hospitalizations has been dealt with.
- isoskeles 7y ago
  Yeah, I feel like this would be cheaper without propping up banks or landlords who don’t have a mortgage. I don’t know if most payment software can handle it but you basically set back any mortgages by N months. Similar for rent you somehow mark it as paid, whatever that arrangement looks like.
- ghouse 7y ago
  Rent too? What about car payments? Utility bills? Student loans? That's fine, but then the banks go out of business? So, do we bail them out? How much is appropriate? And now we're a central-planned economy...
- bequanna 7y ago
  > Why can't we collectively say, no Americans have to pay mortgages/rent for x months. Who would say this? The Federal government? I'm no lawyer, but essentially, they would be voiding hundreds of millions of contracts (?) The Government can't just wave a wand and take an action like this. Even if they could, I don't think you would feel very good about this 'eat the rich' approach for long. Think about it: Why would I as a landlord keep paying utility bills, taxes, insurance when my tenants don't pay me rent? Why would I pay my mortgage? I wouldn't. I would simply walk away. How long after you stop paying rent before your apartment doesn't have running water? The real estate market would be decimated. Banks would fail. Trillions and trillions in value and investments destroyed. Unemployment would skyrocket. Goodbye recession, hello depression. A back door approach to this is a moratorium on evictions, which some states have done. Good luck trying this approach if you're a tenant tho. If this crises is shorter than expected, you'll shortly be evicted and carry that on your record. I think you're operating on the misconception that landlords and businesses are making outsized margins and 'hoarding' wealth. To think that they somehow would have the ability to continue providing you with services and incurring all expenses without any income is naive. Direct cash payments to all taxpayers is the easiest, fastest, and probably cheapest way to achieve your goals of bailing out those at risk.
msoad 7y ago
Do we have the infrastructure to pay every American some amount of money?
- isoskeles 7y ago
  Yes, we’ve done it before, near the end of Bush’s second term. Although I believe that mainly went to adults, it would still work that way.
- toast0 7y ago
  Slip some benjamins in with the census mailers?
Avshalom 7y ago
Hey, maybe they could stop trying to kill SNAP while they're at it https://www.cbpp.org/research/food-assistance/presidents-budget-would-cut-food-assistance-for-millions-and-radically https://www.cbpp.org/research/food-assistance/presidents-bud... https://www.vox.com/identities/2020/3/13/21178257/trump-administration-food-stamps-coronavirus-economy https://www.vox.com/identities/2020/3/13/21178257/trump-admi...
- Avshalom 7y ago
  Also the sick leave bill? pretty half assed to start with and they just made it even more half assed. https://threadreaderapp.com/thread/1239729011187744773.html https://threadreaderapp.com/thread/1239729011187744773.html
exabrial 7y ago
I think this AND the payroll tax elimination for a period of time is a one-two punch combo. The first directly helps the people, the second keeps them employed.
gigatexal 7y ago
i'm gainfully employed and I would surely spend it
neonate 7y ago
https://archive.md/DwZIK https://archive.md/DwZIK
lovemenot 7y ago
It really needn't be about money. Neither how much, nor how distributed. A pandemic is mostly about human behaviour, which is social. No need to keep imagining that there is a strong causal link with money in the short term. At least not so much as it might matter.
CyanLite4 7y ago
Based on inventory levels at my area supermarkets, is MORE consumption really needed right now? I could see a mortgage/rent holiday for a month or two. Just don’t want folks going out buying a thousand dollars worth of toilet paper.
ghouse 7y ago
Corporations are owned by people. "84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households."[0] Bailing our corporations bails out the wealthy. Send money to everyone equally. It's fast. It's fair. And it will quickly increase the velocity of money. [1] [0] https://www.nytimes.com/2018/02/08/business/economy/stocks-economy.html https://www.nytimes.com/2018/02/08/business/economy/stocks-e... [1] https://www.investopedia.com/terms/v/velocity.asp https://www.investopedia.com/terms/v/velocity.asp
maerF0x0 7y ago
Can we please get it for legal immigrants too? We pay taxes (lots!), are in the same need and also can stimulate the economy.
vearwhershuh 7y ago
I sincerely hope they do this as debt-free greenbacks.
nazgulnarsil 7y ago
Means testing would take too long. Don't be concerned that rich people get it too. 1. There are far fewer rich people 2. Rich people just took a 20+ percent haircut, they did and are paying for it in decreased economic activity
sershe 7y ago
This is a great idea, I just wish the government didn't make it necessary in the first place. Or perhaps that they at least tried it before the insane measures the Fed is taking to prop up the stock market.

268 points by spking 7y ago

Last global pandemic of most compare - the Spanish Flu, we had a society that was savings conscious. Past few decades have seen a turn towards interest rates so low that borrowing over saving has prevailed. So whilst this may help a little and more so for some, it will do nothing for many who are debt rolling from one payday until another. That without intervention upon loans and debt repayments over this period will cause more chaos and impact. Though most will need fuel, food and essentials in this time, might be better if you had those delivered to those who are stuck and in direct need. Otherwise, I wouldn't be supprised if ration books become norm for a period soon. Certainly for toilet roll.

pbourke 7y ago
> Last global pandemic of most compare - the Spanish Flu, we had a society that was savings conscious. Also a society that was emerging from WWI. The mindset was different.
dhosek 7y ago
Savings rates have been going up over the last decade. Some data is available here: https://www.motherjones.com/kevin-drum/2020/03/can-personal-savings-rescue-us-from-an-upcoming-recession/ https://www.motherjones.com/kevin-drum/2020/03/can-personal-...
- Zenst 7y ago
  WOW, how the interest rate can be higher than the base rate is somewhat interesting. Meanwhile in the UK and many other places the saving interest rate is way closer to the base rate and usually less than that. It's almost as if you could borrow cheap and get interest higher than the interest on the loan, alas an avenue that for many is not as easily accessible, but if you have money, you can make money.

23B1 7y ago

https://petitions.whitehouse.gov/petition/suspend-mortgage-payments-and-interest-until-coronavirus-pandemic-has-passed https://petitions.whitehouse.gov/petition/suspend-mortgage-p... 3 signatures so far. If the housing market, core to our economy, can be insulated from a crash rebuilding will be significantly easier.

droptablemain 7y ago
Has the current administration ever bothered to respond to any of those?
baybal2 7y ago
I think housing market in USA seriously needs a healthy correction to make housing available to masses again
- save_ferris 7y ago
  Yeah, but if that happens, the economic factors leading to a housing crash (i.e. mass unemployment) will almost certainly also prevent most people who need affordable housing from being able to purchase it.
  - JMTQp8lwXL 7y ago
    All else equal, getting rid of superfluous zoning rules that are preventing new construction and thereby lowering prices, wouldn't harm those who close to being able to afford housing today. Relaxing zoning doesn't hurt the economy. If anything, restricted zoning limits the economic growth we need.
    - save_ferris 7y ago
      That I completely agree with. It just sounded like the parent suggested that a housing crash would somehow make real estate affordable for everyone, which clearly isn't the case, based on what happened in 2008.
- 7y ago

sethammons 7y ago

Instead of giving money, why not suspend debt payments and interest growth?

andylei 7y ago
because some people might need to buy food
- deleted 7y ago
  [deleted]
graeme 7y ago
The debt payments go to someone. Suspending those still creates a cashflow hole. I haven’t fully thought through the effects of handing out cash, just wanted to point out that suspending debts isn’t costless. Landlords would reduce spending, and banks might slip into crisis. And what of those with no debt, but who can’t work due to virus? Or those with debt, but who can’t work? They still need to eat.
davis_m 7y ago
Does it have to be one or the other?
koheripbal 7y ago
Because then the banks will go under. The government isn't the recipient of loan payments.
- tlbsofware 7y ago
  Hmm unless they buy the loans and we have to pay the government for that... doesn’t sound like it would work but I’m curious of what the economists here think of that
rjsw 7y ago
I suspect it will need a bit of both.
7y ago

samsquire 7y ago

The case for unconditional basic income has never been stronger. Especially with disease precluding work.

seneca 7y ago
I'm curious, in current proposals, would a UBI be limited to citizens only? I'm guessing not, given the "universal" nature of it. If that's the case, I can't say I see support for a UBI gaining wide-spread support, or economic viability, in the US without first securing our boarders. It seems mutually exclusive, given that it would result in an unprecedented flood of economic migrants. I may be misunderstanding the scope of "universal" in this context. If that's the case, I'm curious what the typical requirements for access are.
- badestrand 7y ago
  I have never seen a proposal for UBI that is not limited to citizens. You obviously have to draw a line somewhere and obviously you would not give money to tourists. Maybe long term residents could be included though, e.g. those who live 5+ or 10+ years in the country.
- tlbsofware 7y ago
  They would need some sort of registered paperwork to guarantee that some aren’t being double paid. On Wikipedia it mentions legal residents so my guess is it would extend to work visas too possibly
- eatbitseveryday 7y ago
  Andrew Yang’s proposal was targeting UBI at American adults[1] which means citizens. [1] https://www.yang2020.com/what-is-freedom-dividend-faq/ https://www.yang2020.com/what-is-freedom-dividend-faq/
  - seneca 7y ago
    Thanks for the reference, that's a very succinct explanation. For those on mobile, here's the answer from Yang's plan: > Every U.S. citizen over the age of 18 would receive $1,000 a month, regardless of income or employment status...

eagsalazar2 7y ago

Should also include suspension of residential rent payments. Otherwise renters are accumulating debt during the crisis (at best) which will also drag the economy and housing market down.

duxup 7y ago

Economics is an interesting field of study with what seems like endless amount of differing views and such. However, it seems that if you're looking for economic stimulus one of the most sure fire ways / proven ways / agreed upon ways to get bang for the buck is to give poor people money. Poor people will spend it, and you can be pretty dang sure they'll put that money into the economy and quickly. I'm all for it.

abfan1127 7y ago
The most important aspect of the claim about spending money is the broken window fallacy. Henry Hazlitt wrote a great book on the subject called Economics in One lesson. The simple example is that we can't go around breaking windows to stimulate the economy. Sure, the window manufacturer and the window replacement companies might benefit, however that money which went towards the window could have gone elsewhere. Engineering taught me one very important lesson. We can never get something for nothing. There is always a trade off. If the government is handing out money, it has to come from somewhere. Its either taxes, which means that tax money collected can't be spent elsewhere. Or it has to be printed, which is inflation. Some people say, people aren't spending it, they are saving it! Thats important too. Unless they are keeping it in their mattress, that money is deposited in banks, which loan out the money for capital improvements, etc. Lastly, my anecdotal experience is that "free money" tends to be squandered more than earned money. Which means poorly allocated funds towards resources less valuable to a strong economy.
- minikites 7y ago
  >The simple example is that we can't go around breaking windows to stimulate the economy. Sure, the window manufacturer and the window replacement companies might benefit, however that money which went towards the window could have gone elsewhere. The "windows" in this metaphor are already broken by the coronavirus. Our only choice now is how soon to fix them and which windows get fixed first. >Unless they are keeping it in their mattress, that money is deposited in banks, which loan out the money for capital improvements This isn't borne out by evidence, banks refused to lend during the 2008 recession.
- 7y ago

shartshooter 7y ago

As long as the money is given to folks who need and/or will spend it, it feels like this is the exact situation where the federal government steps in for stimulus. There’s no pull yourself up by your bootstraps talk right now and there shouldn’t be. I know the single parent working a couple of jobs will spend every dime they’re given in a time like this, just to survive. A yuppie like me would just park it in my savings account until I feel we hit bottom, then invest it. I’m not the type of person you want to give money like this to. Save it for folks who are really living hand-to-mouth and don’t shortchange them.

ed312 7y ago
It is impossible to know from demographic information alone exactly how people will spend a windfall. If we're doing helicopter money, we should do it for everyone equally. Maybe instead of food I buy a bunch of video games or beer or some other good. Still keeping the economic engine running.
- MiroF 7y ago
  I think that we can assume that for people worth low income, savings rates will be much lower than for richer people. Sure, we can't "exactly" know from demographic information, but the fact that if you have a higher income you have a higher savings rate is pretty basic.
- mtberatwork 7y ago
  Why not do a progressive amount based on income (available from the IRS)? Those in higher income brackets would receive less, while those in lower income brackets would receive more.
  - ed312 7y ago
    Because some people live in very high cost of living areas - high income alone is not sufficient. Ultimately if you don't hand out the benefit equally you're making some kind of value judgement: you ought to live this way, and not this way, to be worthy of support from the government. This is a _hard_ problem to even quantify. The real goal here is to keep the economic engine running (even on idle). Adding a political dimension will only slow down or block this, which will hurt everyone.

pingyong 7y ago

Hmm. A lot of businesses will get into big trouble over the coming weeks and potentially months. Bars, event organizers, even shopping malls. They're all going to go down to almost zero profit for a while. The problem is if you just give people money right now, they literally can't spend it on those things because they are or will be closed during that time. Money isn't the reason they're not going, Corona is. The money would be spent on things that are doing well now anyway (rent, food and netflix/videogames/etc.). Maybe right now the focus should be on not making people homeless, but then giving people money after the crisis so they can spend it in the industries that are suffering right now.

nathancahill 7y ago
> almost zero profit Almost zero revenue. Negative profit.
- whatshisface 7y ago
  There are going to be a lot of interesting conversations with landlords in the coming months. "If you make me pay rent, I won't be around when the crisis is over. If you let me off paying rent, I will get back in business and start paying rent again faster than any other way you could fill my space."
mtberatwork 7y ago
The workers at these establishments, especially those whose income is tied to tips, will certainly need this extra money for rent, food, etc.
- pingyong 7y ago
  Some absolutely will. That's not really what I'm trying to argue against, people who would become homeless or starve should absolutely be helped. However, a lot of people seem to be under the impression that this would boost the economy (because the idea is that almost everyone gets money so they can spend it instead of specifically helping with rent or food), which I don't think it will currently, or at least it won't in a meaningful way that helps the businesses who need it.

alecco 7y ago

Actions have consequences. Your income and your future pension are going to pay for this in one way or another.

tryptophan 7y ago
I think this is one of these situations in which doing nothing has a higher cost than doing something, even if that something(give people money for free) is generally bad in most circumstances.
- alecco 7y ago
  The goal is to make the economy to recover quickly. Fail fast, learn the lesson, make things cheap and keep unemployment low. Or do something against centuries of experience and see what happens. Avoiding short-term pain by trading it for a much worse problem later is what made us so vulnerable to a not-so-deadly virus. Zombie too big to fail banks and corporations and a real estate market out of control. Same happened everywhere, not just US.
cultus 7y ago
Great, we'll just have tens of millions of new homeless then.
- alecco 7y ago
  It's not the only possible measure to handle the problem.
decebalus1 7y ago
we don't have a functioning nation-wide social safety net. Some say it's the price we pay for innovation and market driven prosperity. That's fine, I guess. But I'd rather pay for this in the future than having to deal with rioters and looters now. Not to mention living in a healthy and civil society where people don't have to worry about the first level in Maslow's pyramid of needs. There was a quote about being X meals away from anarchy.
7y ago

deleted 7y ago

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nimbius 7y ago

hey i remember when we did this in 2008. There was a huge economic meltdown, I just lost my job and was living out of my truck, and the Republican party wasnt looking like a real winner in the upcoming election. So it was decided that everyone gets a "stimulus check." I got $700 from the Republican party...and it basically felt like $700 to keep my mouth shut about how Bush didnt care to find Osama Bin Laden. it was a few hundred and in return i was expected to stop complaining about how TARP bailed out big banks but left me living in a stale coffee scented Dodge Ram. I am a little bitter about the whole gesture but let me tell you what I spent that money on: credit card debt. Now here we are in 2020 and the Republican party is looking at cutting checks for everyone again and I gotta wonder why. What is this really hoping to achieve? Write me a check and in return I stop complaining about how my health insurance doesnt cover a flu shot? or how the country has more prison beds than hospital beds? That basically everything the president promised he'd do he either ignored or buck-passed to Obama? I dont want corona cash. I want an economy that doesnt shit the bed like clockwork every ten years and send me out looking for handyman jobs. Id like a healthcare system that doesnt include ambulance rides that are as expensive as a used car.

dpcan 7y ago

Chasing our own tails. If this virus does very little to zero damage in the US, I’m afraid it will become the worst “cry wolf” situation in the history of humanity.... when the truly dangerous bug arrives.

unknown_library 7y ago
If it does very little damage, then mission accomplished.
- dpcan 7y ago
  Yes, I am 100% on board with this. Nothing happens is exactly what we want, and WHY we are doing what we are doing. But there are too many people in this world that are painfully illogical and will think it's a "hoax" or "fake" if nothing actually happens.
pbourke 7y ago
Even if the US had a magical force field that kept the virus out, it would still do a considerable amount of damage. The supply disruptions that hit China are now moving to the rest of the world. The largest companies in the US do a large amount of foreign business - I’ve heard up to 40% or so of the revenue of the S&P 500 comes from outside of the US.

starpilot 7y ago

/r/titlegore

throwaway5752 7y ago

We have this already. It's called unemployment. We don't need stimulus for people with existing paychecks. We need conditions and durations on unemployment temporarily lifted, some for of access for self-employed or under-the-table workers, and some form of block grants for companies that would otherwise face bankruptcies (which would cascade) and and obviously enormous increases in funding that would be required by this. edit: why am I downvoted? The problem is not giving extra money to those with jobs, the problem is giving money to those without jobs.

throwanem 7y ago
I don't know why you're downvoted, but unemployment is a state-level program. This is a national problem and merits a federal response.
- throwaway5752 7y ago
  Yes, and this begs the question of what will happen with state budgets, many of which have balanced budget amendments and have no legal flexibility to deal with this. The answer is federal block grants to backstop national unemployment changes. Removing waiting periods and extending benefits indefinitely is essentially temporary UBI, which is what we need. So yes, this form of changes to unemployment would _require_ a federal response. And we require far more federal response than that, far far more. But payroll tax holidays and $1000/adult responses are not serious policy and waste invaluable time.

reaperducer 7y ago

I've heard people say this won't change anything, and that rich people will just use it to buy gold-plated toilets while poor people will use it to buy meth waffles. I remember the last time everyone got checks from the government.† The $1,200 I got was enough to keep my family from living under a bridge. There are tens of millions of people living paycheck-to-paycheck, so even if this helps some people, I'm in favor of it. † https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008 https://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008

choward 7y ago
It's funny how much people can be influenced by the media and other people without any actual facts. Who cares what rich people do with the money? And not everyone is poor because they are drug addicts. "If we just give everyone money what incentive is their to work?" That's another one of my favorites.

francisofascii 7y ago

Sitting at home reading a book may not feel like a real job, but it is a job! In this unique situation, the government is asking/requiring people to stay home and alter behaviors. It is not a free handout for doing nothing. People giving up jobs and staying home and doing nothing is serving a purpose of not spreading the virus. People should be compensated for that service.

fma 7y ago
Yep that is part of Yang's policy. Human value vs economic value. Right now our economy doesn't value human life. A stay at home parent who looks after the kids is judged as 0 economic value but raising productive children provides great value to society. For today... as a human you are very valuable if you stay the hell home.

9uq34aofgh 7y ago

The media/political response is a giant hoax. Read the source paper from the CDC our corporate and political leaders are using to justify the panic: https://www.cdc.gov/mmwr/volumes/66/rr/rr6601a1.htm https://www.cdc.gov/mmwr/volumes/66/rr/rr6601a1.htm and appendix 5 https://stacks.cdc.gov/view/cdc/44314 https://stacks.cdc.gov/view/cdc/44314 From the evidence section of appendix 5: "Mandatory quarantine delayed the peak of the pandemic, but when cost was taken into account, mandatory quarantine was not an economically effective intervention against the 2009 H1N1 pandemic" Isolations only delay the peak, they don't prevent it, and the wreak havoc on the economy. Plus all the curve flattening talk are just poorly written computer simulations. Zero evidence it will happen. From the paper here are the key objectives of isolation, none of which apply to covid-19 in the USA (unless hospitals are adding tens of thousands of new beds, respirators, and nurses in the next few weeks). "Objective 1: To gain time for an initial assessment of transmissibility and clinical severity of the pandemic virus in the very early stage of its circulation in humans (closures for up to 2 weeks) Objective 2: To slow down the spread of the pandemic virus in areas that are beginning to experience local outbreaks and thereby allow time for the local health care system to prepare additional resources for responding to increased demand for health care services (closures up to 6 weeks) Objective 3: To allow time for pandemic vaccine production and distribution (closures up to 6 months)"

cliffy 7y ago
Of course you're some newly created sock-puppet account too afraid to post under your real handle. COVID-19 will absolutely cause the death of millions in the US alone if proper steps aren't taken to reduce R0. If not from the disease itself, then from hospitals being completely overloaded. Edit: Let's be real: lockdown/isolation is going to have to persist for at least a month or more to have a real chance of preventing the spread to most of the population in the US. 2 weeks is not going to cut it.
- 9uq34aofgh 7y ago
  Not a sock-puppet. Where's the evidence isolations will flatten the curve and not just cause another spike of cases after isolation ends? Covid-19 isn't going to die out after a few weeks or months. Deaths are coming from ages 70+ with severe pre-existing conditions during non-peak hospital conditions. This is normal and nothing to panic about. Also, do R0 values of a virus change dramatically? I thought they were set based the number of non-vaccinated people who get infected...

runawaybottle 7y ago

How does direct cash help the underlying problem? People can’t go outside and do stuff. We need loans for businesses and relief for companies to weather a pause (so layoffs and closings are mitigated).

glitcher 7y ago
It is not meant to fix the underlying problem. It is meant to help those in need buy essential items like food and medicine, and possibly even pay their rent, but it probably won't be enough for even that when your family needs to eat first. I think direct cash to individuals is only one small part of the bigger picture though. And to your point, businesses are going to need help too. It's not a matter of choosing only one or the other path, but finding a balance employing multiple strategies simultaneously.

etxm 7y ago

Honest question, not an economist. How would giving everyone money impact inflation? Is giving money the same thing as “printing money?”

wmeredith 7y ago
Giving money != printing money. If I give you $20 that doesn't mean I fabricated the bill myself. The money could come from any numbers of places in the vast Federal budget.
- megous 7y ago
  The budget already has a huge deficit. They'd have to cut funding to something, in order not to increase it further. Or they could add it to the deficit (which means borrowing the money), and that translates to higher inflation, pretty much, as banks create the borrowed money. Recent lowering of the interest rates by the FED also plays into this. I think any kind of stimulus will almost certainly translate to higher inflation. It's not necessarily bad. It's a bit of an equalizer. You give money to everyone, money loses value somewhat, but only the people who have the most money at the moment, will suffer from the inflation in absolute terms (money received vs value of savings lost).
6gvONxR4sf7o 7y ago
Typically it's redistribution. If you combine a progressive tax with a flat handout, you're basically taking from the rich and giving to the poor.

mythrwy 7y ago

I feel we need to do something along these lines for the immediate, but at the same time wonder if it's practically possible to give enough money to actually matter. To me it seems this crisis is exposing several fallacies underlying our civilization. 1) The idea that infinite debt based economic growth is workable long term. 2) The notion that somehow we can beat natural evolution and selection long term with science. Both of these ideas work very well in the narrow slice of human history we have lived in, but longer term maybe are just fallacies.

deleted 7y ago

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jordanpg 7y ago

The assume that form that this would actually take would likely be promised 2020 or 2021 tax credits -- anything else would be logistically too slow. This form is only useful to people who already have cash or ready credit available. Not obvious to me that this would help the many millions who need cash to spend right now.

veeralpatel979 7y ago

Just curious: will this help the economy recover, when for large parts of it (entertainment, dining, travel, etc) the reason it's closed is due to the virus and not due to lack of money?

Entalpi 7y ago

I am sorry but how is this a reasonable idea, instead of you know making paternal/maternal leave state, health care system and salary insurance program government funded? Temporary economic injections will not transform peoples lifes nor save them from an unsustainable lifestyle.

nvusuvu 7y ago

Why can't we collectively say, no Americans have to pay mortgages/rent for x months. No small/medium sized businesses have to pay business loans for x months. Everyone focus on social distancing and making sure everyone has food and shelter. Weather this out, and start back up after peak infections/hospitalizations has been dealt with.

isoskeles 7y ago
Yeah, I feel like this would be cheaper without propping up banks or landlords who don’t have a mortgage. I don’t know if most payment software can handle it but you basically set back any mortgages by N months. Similar for rent you somehow mark it as paid, whatever that arrangement looks like.
ghouse 7y ago
Rent too? What about car payments? Utility bills? Student loans? That's fine, but then the banks go out of business? So, do we bail them out? How much is appropriate? And now we're a central-planned economy...
bequanna 7y ago
> Why can't we collectively say, no Americans have to pay mortgages/rent for x months. Who would say this? The Federal government? I'm no lawyer, but essentially, they would be voiding hundreds of millions of contracts (?) The Government can't just wave a wand and take an action like this. Even if they could, I don't think you would feel very good about this 'eat the rich' approach for long. Think about it: Why would I as a landlord keep paying utility bills, taxes, insurance when my tenants don't pay me rent? Why would I pay my mortgage? I wouldn't. I would simply walk away. How long after you stop paying rent before your apartment doesn't have running water? The real estate market would be decimated. Banks would fail. Trillions and trillions in value and investments destroyed. Unemployment would skyrocket. Goodbye recession, hello depression. A back door approach to this is a moratorium on evictions, which some states have done. Good luck trying this approach if you're a tenant tho. If this crises is shorter than expected, you'll shortly be evicted and carry that on your record. I think you're operating on the misconception that landlords and businesses are making outsized margins and 'hoarding' wealth. To think that they somehow would have the ability to continue providing you with services and incurring all expenses without any income is naive. Direct cash payments to all taxpayers is the easiest, fastest, and probably cheapest way to achieve your goals of bailing out those at risk.

msoad 7y ago

Do we have the infrastructure to pay every American some amount of money?

isoskeles 7y ago
Yes, we’ve done it before, near the end of Bush’s second term. Although I believe that mainly went to adults, it would still work that way.
toast0 7y ago
Slip some benjamins in with the census mailers?

Avshalom 7y ago

Hey, maybe they could stop trying to kill SNAP while they're at it https://www.cbpp.org/research/food-assistance/presidents-budget-would-cut-food-assistance-for-millions-and-radically https://www.cbpp.org/research/food-assistance/presidents-bud... https://www.vox.com/identities/2020/3/13/21178257/trump-administration-food-stamps-coronavirus-economy https://www.vox.com/identities/2020/3/13/21178257/trump-admi...

Avshalom 7y ago
Also the sick leave bill? pretty half assed to start with and they just made it even more half assed. https://threadreaderapp.com/thread/1239729011187744773.html https://threadreaderapp.com/thread/1239729011187744773.html

exabrial 7y ago

I think this AND the payroll tax elimination for a period of time is a one-two punch combo. The first directly helps the people, the second keeps them employed.

gigatexal 7y ago

i'm gainfully employed and I would surely spend it

neonate 7y ago

https://archive.md/DwZIK https://archive.md/DwZIK

lovemenot 7y ago

It really needn't be about money. Neither how much, nor how distributed. A pandemic is mostly about human behaviour, which is social. No need to keep imagining that there is a strong causal link with money in the short term. At least not so much as it might matter.

CyanLite4 7y ago

Based on inventory levels at my area supermarkets, is MORE consumption really needed right now? I could see a mortgage/rent holiday for a month or two. Just don’t want folks going out buying a thousand dollars worth of toilet paper.

ghouse 7y ago

Corporations are owned by people. "84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households."[0] Bailing our corporations bails out the wealthy. Send money to everyone equally. It's fast. It's fair. And it will quickly increase the velocity of money. [1] [0] https://www.nytimes.com/2018/02/08/business/economy/stocks-economy.html https://www.nytimes.com/2018/02/08/business/economy/stocks-e... [1] https://www.investopedia.com/terms/v/velocity.asp https://www.investopedia.com/terms/v/velocity.asp

maerF0x0 7y ago

Can we please get it for legal immigrants too? We pay taxes (lots!), are in the same need and also can stimulate the economy.

vearwhershuh 7y ago

I sincerely hope they do this as debt-free greenbacks.

nazgulnarsil 7y ago

Means testing would take too long. Don't be concerned that rich people get it too. 1. There are far fewer rich people 2. Rich people just took a 20+ percent haircut, they did and are paying for it in decreased economic activity

sershe 7y ago

This is a great idea, I just wish the government didn't make it necessary in the first place. Or perhaps that they at least tried it before the insane measures the Fed is taking to prop up the stock market.