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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 stimul

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.
    - wool_gather 7y ago
      > The real goal here is to keep the economic engine running I would say that the real goal is to keep people from suffering because they lack necessities, including housing. Granted that the economy is how we supply those things, so we need it to work, but I would say it is a close second priority-wise.
    - mtberatwork 7y ago
      > Because some people live in very high cost of living areas - high income alone is not sufficient. No system will be perfect, but the government certainly can make adjustments based on dimensions like residence area. (They already do something similar with GS pay scales.) Similar income distribution programs exist in other Western countries (Kinder Geld in Germany comes to mind) so it's not like variations of this have never been successfully implemented before.
  - toast0 7y ago
    At this point, you would have to use 2018 tax year info. 2019 tax filings aren't due for another month, and I think most people file in the week before the deadline. There's a lot that can happen to income levels in that time period.
  - AnthonyMouse 7y ago
    There is a degree to which people who make more need more in cases like this, i.e. if one person makes $80,000 and another makes $40,000 and they both have their hours cut and lose half their income, the one who "makes more" just had their income reduced by a larger amount and is likely to have higher recurring expenses to carry. On the other hand, the person who had been making more has had more opportunity to save. So it goes both ways, and giving people the same amount of money is a middle ground that also has the advantage of being much administratively simpler.
- deleted 7y ago
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tombert 7y ago
I mostly agree; the only caveat I'd give is that it's tough to say how much longer any of us are going to be yuppies right now; I work for one of the many big megacorporations whose stock is tanking right now. If the stock doesn't pick up soonish, there's a non-zero probability of me being laid off. While I'm not that worried (I've been able to find work in bad economies in the past), I also do feel a bit of paranoia about this.
- PeterStuer 7y ago
  Can you explain how your job is directly related to the company's stock trading price? Not being sarcastic are something, just genuinely curious?
  - quickthrowman 7y ago
    Stock prices are an expectation of future cash flows, the rest explains itself.
    - droopyEyelids 7y ago
      There is a bit more to be said about how wall st places more value on layoffs than other adjustments to a company's balance sheet. Employees are seen as a generally ugly long term money sink.
      - quickthrowman 7y ago
        I agree wholeheartedly, investors really dislike raises and bonuses for line employees, and will punish companies for it. Shareholder primacy theory is insanity. Speaking of insanity, Art Laffer is advising the current administration re: stimulus. How that guy isn’t immediately laughed out of any room he walks into is beyond me.
  - wcoenen 7y ago
    The stock price is determined by dicounted cash flow valuation of profit, or at least what stock traders estimate it to be. If the stock price is crashing, that means traders are predicting reduced profits. Reduced profits mean layoffs.
deleted 7y ago
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whatshisface 7y ago
>A yuppie like me would just park it in my savings account until I feel we hit bottom, then invest it. That sounds like stimulus to me.
- gruez 7y ago
  more like quantitative easing.
baron_harkonnen 7y ago
Sure people in the top 10% are not likely to need this money, but giving it to everyone is a lot easier and faster than figuring out who needs it the most. Even in that top 10% there are still people that live paycheck-to-paycheck. I was there not long ago. It's a lot better to give everyone the money and be wrong about ~10% of the people needing it then delay it for people who have bill past due right now.
- ModernMech 7y ago
  Yes, a lot of times you'll hear $100,000 as a cutoff for aid. I made $100,000 in the Bay Area. It doesn't go as far as people might think.
  - newhotelowner 7y ago
    I lived in the bay area with a family and moved to Ohio in the middle of 2018. 1/3 of the population living on minimum wage in a 50k population town in Ohio. That is $18,000 per year. $100,000 has much more purchasing power than $18,000. For you saving $5000 is easy. For someone making minimum wage, saving $500 by the end of the year is impossible. If you have a car, your deductible might be 250-500. The majority of the minimum wage earners deductible is 500. They usually don't have that when accident happens. When the boiler goes out, it usually cost same to fix it for high earners and minimum wage earners.
    - ModernMech 7y ago
      Yes, $18,000 has less purchasing power than $100,000, but a lot of people still have this conception that people making $100,000 can't possibly be living paycheck to paycheck.
      - bsanr2 7y ago
        I generally challenge anyone who claims this to post a detailed budget. SF is expensive, but if it were so expensive that someone making $100k could not cut any expenses, it would not be able to function. Stop contributing to your 401k or something.
chewz 7y ago
Giving to everyone is the simplest and cheapest and quickest approach. If you do not need the money just pass it to someone who needs it more.
- matwood 7y ago
  Yep. Trying to carve out one group or another is exactly how we end up with a convoluted tax system and subsidies.
OldHand2018 7y ago
> Since the administration wants to prop up the markets, this also helps accomplish their goals.
wonderwonder 7y ago
Issue with not giving it to everyone is that a large portion of people with a good, financially secure job could find themselves unemployed in a week or so as layoffs ramp up. We are going to see massive layoffs in the next few weeks, especially in retail, food services, travel and entertainment. In addition, we should be flooding individuals and households with money right now to ensure survival. An over payment of 10% is far less harmful than an underpayment of the same amount.
wenc 7y ago
Under normal circumstances, we could make it opt-in. This was a stipulation of Andrew Yang's UBI policy. It could be argued that under current circumstances, creating an opt-in mechanism might increase administrative complexity. That said, I imagine you still need a simple mechanism to figure out eligibility. Do non-citizens qualify? Permanent residents? Short-term visitors? International students? Only people with SSNs? So if there's going to be an administrative layer anyway, the difficulty of adding an opt-in mechanism to that layer would be marginal.
- tialaramex 7y ago
  "Opt-in" systems have disappointing levels of people who need the benefit but are too proud or scared to claim. Where possible avoid this problem and give the benefit to absolutely everybody. The administration is simpler, it will get to all those who need it, and if you become concerned Bill Gates is getting too much free childcare or whatever, feel free to increase his taxes accordingly.
  - diggan 7y ago
    > "Opt-in" systems have disappointing levels of people who need the benefit but are too proud or scared to claim. Is there any source to this claim when it specifically comes to giving people money for opting in for something? Using some nordic countries as example, many of them help people by giving them money each month in order to survive. These people are not too proud or scared to claim free money when they need it. My guess is that people from the US will act similarly.
    - tialaramex 7y ago
      Specifically for giving cash money? No. But the UK has experience with benefits that are automatic versus have to be claimed and it's noticeable. As an example elderly people in the UK are entitled to use some types of public transport at no cost so as to ensure they don't end up isolated (of course right now isolating them is a good idea, but ordinarily it's a problem). But the entitlement takes the form of a smartcard with photo ID. So of course you need to do paperwork to get it. The very wealthiest may not bother, if you have a chauffeur who cares about free bus travel? But the poorest don't apply at anywhere close to expected rates, because somebody needs to explain to them that they need to apply, help them take a photograph and upload it, and so on. Are you sure about Nordic countries just "giving people" money with no strings attached? They have much better social safety nets than the US, which are important for softening things like this - but an improved social safety net is not free money.
snarf21 7y ago
Morally that is the right choice. Politically, there will never be a way to pick only the people who really need it. Everyone makes that more tenable.
heymijo 7y ago
Implied in your comment is that today's crisis is one similar to 2008 in that the economy needs "stimulus." Today's crisis is different. The regular economy is grinding to a halt because we have to in attempts to slow the spread of the coronavirus. What individuals and every component of the economy need are deferral and cancellation. Rubidium talked about it in another post. [0] $1,000 to a family that is living paycheck to paycheck doesn't solve the problem. Do a search and most surveys put America at somewhere between 70-80% of workers living paycheck to paycheck. So let's discuss giving Americans money but only to move the Overton Window. Then let's lead that discussion to solutions that address the fragility of our economic problems at their root--both in the short-term and long-term. [0] https://news.ycombinator.com/item?id=22604982 https://news.ycombinator.com/item?id=22604982
xefer 7y ago
I've seen people mention putting some sort of "use it or lose it" time limit on the money, so that people are motivate to inject it directly into the economy instead of just sitting on it. I'm not sure how feasible such a thing is or if it would hurt the cause of keeping the economy moving.
- sailfast 7y ago
  I just don't know how you would enforce this and even if this money "only" helps a family with some means have a cushion to worry a bit less so they can continue as they were it would be productive for markets. Say you send a prepaid Visa card (this would be terrible because of fees but go with it) to everyone with an expiration date, it'd be easy to parlay that into vehicles that were not "spending" (gift cards, other pre-paid cards, etc) and regulating that is a nightmare. Once you get into qualifiers and enforcement regimes you're slowing things down and adding percent costs to each dollar provided. I'd say keep it simple.
sailfast 7y ago
"Means testing is hard. [Sending a check] is easy." Don't add the overhead / cost / etc for the benefit - speed is key, just cut the check in my opinion.
oiasdjfoiasd 7y ago
no, we should just give it to everyone.
Amygaz 7y ago
I agree in the sense that money will go further when pooled, than if you just give it UBI's style. But, this is a societal crisis, not an individual one. It is not fair to ask people to pull themselves out of a situation that they did not create, but that our unaccountable government did create. An example: restaurant are struggling and some people need food. Give money to Town gov, so they can buy food from restaurants and serve that in community center. Adjust volume as needed. Plus the whole financial easing they are trying is dumb. It would be useful if the intention was not to control what is happening with the public markets. We just do not really control those, not on a daily basis anyway. Algorithms heavily relying on market volatility control those, and that is what they are doing right now. So, seeing an administration believing that humans are in control of a mostly automated trading system is dumb. While the evolution of new virus with pandemic property is not something we control. Its propagation to pandemic level is something we have absolute control on. We are failing as a society, because we allow those things to happen.
bargl 7y ago
I think the simplest solution is to give money and raise taxes on the top 60%. Undo what Trump put in place and go back to taxing Americans a little more. This way the benefit only applies to the bottom 40% of tax brackets and at 40-60 you pay some if not all back and 60+ you pay it all back and more. Then it's a fair safety net that everyone can see might be necessary in these times. This is just a thought, I'd actually just put Yang in charge of this.
black_13 7y ago
This attitude is why things do get done.
java_script 7y ago
How charitable, now to implement that everyone has to prove their level of income and assets before receiving aid and will unnecessarily screw people on the margins in situations you didn’t imagine up front. Stuff like that gets implemented (usually, in America) as a non-refundable tax credit meaning the poorest get nothing as well. Just cut the check, tax the rich, and don’t make more paperwork.
jonnycomputer 7y ago
In general, giving things only to poor people generates opposition to the program giving it. The attitude is, "Why should my hard work pay for those lazy people." Means testing can also add a lot of overhead and headaches for the people involved. My suggestion: use it to pay down your upcoming tax bill, give it to people you know could use it, if you order food, leave some really fat tips for the delivery guy, donate to charity.
- pythonaut_16 7y ago
  Using what you don't need to further help people around you is a really great suggestion!
JoeAltmaier 7y ago
It often costs more than the money, to set up a bureaucracy just to decide who gets it.
dominotw 7y ago
> As long as the money is given to folks who need and/or will spend it only if admin cost to determine if a person needs it is low enough.
gdubs 7y ago
There are a lot of businesses out there that are non-essential services, that will be hit hard by this. Someone still has to shop at the local bookstore when this is over, because those people – even with direct stimulus – will be struggling to stay afloat. If we want to start the economic flywheel spinning again, it's gonna take stimulus at pretty much all levels. Most working class people will spend that money directly on essential goods and services. But for the health of the overall economy, it's important that enough people will have enough that they feel confident they can start going out again and supporting all sorts of shops.
egypturnash 7y ago
The government pulled more money than this out of thin air to throw at the stock market just the other day, only to watch it vanish just as quickly. Money is a fiction that we have invented to grease the wheels of commerce. Why bother creating a bunch of rules that people have to apply in the middle of a crisis? You are living human who has not received this month's stimulus yet, great, here you go, good luck and blessings upon your health. Bureaucracies take time to spin up, more complex rules take longer to apply, and there are a huge number of people whose jobs are destroyed by "don't go outside until the virus dies off". If you are way too rich for a thousand bucks to mean anything, then give it to someone who needs it more. Maybe a super-broke friend, maybe just withdraw a few hundreds and hand them out to homeless folks, whatever.
thatfrenchguy 7y ago
> A yuppie like me would just park it in my savings account until I feel we hit bottom, then invest it. I would personally feel obligated to spend it, and I normally save 75% of my income.
notatoad 7y ago
normally a stimulus works because if you give people $1000, people will go and spend at least some of it. With most options for discretionary spending shut down, there's really just two things left to spend on: rent and groceries (and i guess: amazon orders). $1000 to every american right now will end up just being a huge payment to landlords. i'm not saying it's a bad idea, people still need to make rent and buy food, but it's not going to stimulate anything. grocery stores are already bringing in record revenues, and landlords don't need the money. It's financial aid, not a stimulus.
Certhas 7y ago
How do you decide who needs it? I think the sane option really would be to give it to everyone and increase taxes to compensate. Progressive taxes fall most heavily on those that can afford them. They are the best tool for this job. Of course to really get this fair, you should tax wealth too, which tends to be difficult...
pwinnski 7y ago
Combine a handout with negative interest rates, and you almost guarantee it will all be spent, as it loses value sitting in a savings account.
jhayward 7y ago
> There’s no pull yourself up by your bootstraps talk right now and there shouldn’t be. Joint statement by conservatives Stephen Moore, Art Laffer, Steve Forbes: "Don’t expand welfare and other income redistribution benefits like paid leave and unemployment benefits that will inhibit growth and discourage work" [1] [1] https://twitter.com/JStein_WaPo/status/1239938361231585286 https://twitter.com/JStein_WaPo/status/1239938361231585286
markvdb 7y ago
Why not _offer_ helicopter money to everyone instead of giving it? Allow people to accept it, but don't oblige them to. Keep it universal and simple, but optimise for cost: - A/B test the messaging. - Make it opt out for lower incomes and opt in for higher incomes. - (?) Offer opt out-ers the possibility to dedicate part of their helicopter money to specific budgets (culture, army, police, medical care, ...)
eru 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. No, it's still a bad idea as stimulus. It might or might not be the right idea from a humanitarian point of view. No opinion on that topic. But if you care about nominal spending in the American economy, the Fed can do the job just fine. Just have them buy assets until total nominal spending (and thus also inflation) is up where you want it. Start with American government bonds, but if that's not enough, expand to other assets as well and keep buying. You may ask: what if this doesn't work to raise spending nor inflation? Well, that's the best case! Congratulations: that means the Fed just bought up all the assets in the world in return for some ink and paper. [0] And all that without devaluing the dollar, since we assumed no inflation would result. Your negative example of people _not_ spending the money they are given turns into the best kind of person you want to be buying assets from, if you are the creator of said money. Of course, in practice this will raise spending. Especially if you announce the policy in a clear and credible way, spending will increase almost immediately even before you implement anything. Markets are all about anticipating expected events. No need to enlarge the government budget or the deficit. Oh, and if you are looking for practical steps to raise spending in the economy and the above programme is too radical for you; then a simple first step is to eliminate positive interest rates on (excess) reserves that banks park at the Fed. In the Fed's defense, they lowered the interest on excess reserves to 0.1%. But you can argue that they should lower it further, perhaps to -1%. Make banks pay to park money at the Fed, so that they prefer bringing that money into the real economy. Either by spending it themselves, or by lending it to people to spend it for them. [0] To be more precise: in return for some even cheaper to create numbers in a computer. Nobody prints these sums of money any more.
sershe 7y ago
Or perhaps stop obliterating an economy and let them actually live. My sister and I were raised by a single mother in Russia in the 90ies, and we did relatively well compared to many. Mom mentioned once that she didn't really regret not having any hobbies or personal life for 10 years, not only because she loves us, but because she really didn't have time or mental effort required to seriously ponder these things, in almost a decade. That was all, mostly, because of economic mismanagement. If you look at the life expectancy chart for Russia at that time, and births - both, again, affected by economic mismanagement - it's quite obvious that it would have been much better even in terms of literal years life lost to have a magical smooth economic transition in 1991, followed by a 100% unchecked coronavirus epidemic. The unchecked covid-19 would have caused far less harm that what the real loss of life was; and that is before you consider lives wasted - the struggle to survive, but also drug use, alcoholism, crime, suicide statistics from the period. Oh and of course the end result - in Russia, most now want stability at any cost, so you have an emperor for life. This recession is looking like it's going to be bad, and politicians from NZ to Malaysia to the UK are saying it's going to be worse than the last one or 1997 one; the way Fed is handling it here indicates they expect something worse than Great Depression, or they are out of options and are going to run it completely into the ground. Meanwhile, the damage from the actual virus /so far/ is zero, literally zero, a rounding error. Yes, I know about Italy - the deaths there up until now are still a rounding error. Yes, I know about the exponential growth - the current levels are still a rounding error; they will grow exponentially, but exponential growth runs out very, very quickly when it has an upper bound of the entire population. It would have been much better to have a one-month-long healthcare collapse where a million people with an average age of 60+ die, instead of a prolonged recession or a depression where tens/hundreds of millions of people in US alone, disproportionately young, children, the poor (not even speaking of the people in developing countries), have their life completely ruined - for many, forever; and many die.

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.
  - wool_gather 7y ago
    > The real goal here is to keep the economic engine running I would say that the real goal is to keep people from suffering because they lack necessities, including housing. Granted that the economy is how we supply those things, so we need it to work, but I would say it is a close second priority-wise.
  - mtberatwork 7y ago
    > Because some people live in very high cost of living areas - high income alone is not sufficient. No system will be perfect, but the government certainly can make adjustments based on dimensions like residence area. (They already do something similar with GS pay scales.) Similar income distribution programs exist in other Western countries (Kinder Geld in Germany comes to mind) so it's not like variations of this have never been successfully implemented before.
- toast0 7y ago
  At this point, you would have to use 2018 tax year info. 2019 tax filings aren't due for another month, and I think most people file in the week before the deadline. There's a lot that can happen to income levels in that time period.
- AnthonyMouse 7y ago
  There is a degree to which people who make more need more in cases like this, i.e. if one person makes $80,000 and another makes $40,000 and they both have their hours cut and lose half their income, the one who "makes more" just had their income reduced by a larger amount and is likely to have higher recurring expenses to carry. On the other hand, the person who had been making more has had more opportunity to save. So it goes both ways, and giving people the same amount of money is a middle ground that also has the advantage of being much administratively simpler.
deleted 7y ago
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tombert 7y ago

I mostly agree; the only caveat I'd give is that it's tough to say how much longer any of us are going to be yuppies right now; I work for one of the many big megacorporations whose stock is tanking right now. If the stock doesn't pick up soonish, there's a non-zero probability of me being laid off. While I'm not that worried (I've been able to find work in bad economies in the past), I also do feel a bit of paranoia about this.

PeterStuer 7y ago
Can you explain how your job is directly related to the company's stock trading price? Not being sarcastic are something, just genuinely curious?
- quickthrowman 7y ago
  Stock prices are an expectation of future cash flows, the rest explains itself.
  - droopyEyelids 7y ago
    There is a bit more to be said about how wall st places more value on layoffs than other adjustments to a company's balance sheet. Employees are seen as a generally ugly long term money sink.
    - quickthrowman 7y ago
      I agree wholeheartedly, investors really dislike raises and bonuses for line employees, and will punish companies for it. Shareholder primacy theory is insanity. Speaking of insanity, Art Laffer is advising the current administration re: stimulus. How that guy isn’t immediately laughed out of any room he walks into is beyond me.
- wcoenen 7y ago
  The stock price is determined by dicounted cash flow valuation of profit, or at least what stock traders estimate it to be. If the stock price is crashing, that means traders are predicting reduced profits. Reduced profits mean layoffs.

deleted 7y ago

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whatshisface 7y ago

>A yuppie like me would just park it in my savings account until I feel we hit bottom, then invest it. That sounds like stimulus to me.

gruez 7y ago
more like quantitative easing.

baron_harkonnen 7y ago

Sure people in the top 10% are not likely to need this money, but giving it to everyone is a lot easier and faster than figuring out who needs it the most. Even in that top 10% there are still people that live paycheck-to-paycheck. I was there not long ago. It's a lot better to give everyone the money and be wrong about ~10% of the people needing it then delay it for people who have bill past due right now.

ModernMech 7y ago
Yes, a lot of times you'll hear $100,000 as a cutoff for aid. I made $100,000 in the Bay Area. It doesn't go as far as people might think.
- newhotelowner 7y ago
  I lived in the bay area with a family and moved to Ohio in the middle of 2018. 1/3 of the population living on minimum wage in a 50k population town in Ohio. That is $18,000 per year. $100,000 has much more purchasing power than $18,000. For you saving $5000 is easy. For someone making minimum wage, saving $500 by the end of the year is impossible. If you have a car, your deductible might be 250-500. The majority of the minimum wage earners deductible is 500. They usually don't have that when accident happens. When the boiler goes out, it usually cost same to fix it for high earners and minimum wage earners.
  - ModernMech 7y ago
    Yes, $18,000 has less purchasing power than $100,000, but a lot of people still have this conception that people making $100,000 can't possibly be living paycheck to paycheck.
    - bsanr2 7y ago
      I generally challenge anyone who claims this to post a detailed budget. SF is expensive, but if it were so expensive that someone making $100k could not cut any expenses, it would not be able to function. Stop contributing to your 401k or something.

chewz 7y ago

Giving to everyone is the simplest and cheapest and quickest approach. If you do not need the money just pass it to someone who needs it more.

matwood 7y ago
Yep. Trying to carve out one group or another is exactly how we end up with a convoluted tax system and subsidies.

OldHand2018 7y ago

> Since the administration wants to prop up the markets, this also helps accomplish their goals.

wonderwonder 7y ago

Issue with not giving it to everyone is that a large portion of people with a good, financially secure job could find themselves unemployed in a week or so as layoffs ramp up. We are going to see massive layoffs in the next few weeks, especially in retail, food services, travel and entertainment. In addition, we should be flooding individuals and households with money right now to ensure survival. An over payment of 10% is far less harmful than an underpayment of the same amount.

wenc 7y ago

Under normal circumstances, we could make it opt-in. This was a stipulation of Andrew Yang's UBI policy. It could be argued that under current circumstances, creating an opt-in mechanism might increase administrative complexity. That said, I imagine you still need a simple mechanism to figure out eligibility. Do non-citizens qualify? Permanent residents? Short-term visitors? International students? Only people with SSNs? So if there's going to be an administrative layer anyway, the difficulty of adding an opt-in mechanism to that layer would be marginal.

tialaramex 7y ago
"Opt-in" systems have disappointing levels of people who need the benefit but are too proud or scared to claim. Where possible avoid this problem and give the benefit to absolutely everybody. The administration is simpler, it will get to all those who need it, and if you become concerned Bill Gates is getting too much free childcare or whatever, feel free to increase his taxes accordingly.
- diggan 7y ago
  > "Opt-in" systems have disappointing levels of people who need the benefit but are too proud or scared to claim. Is there any source to this claim when it specifically comes to giving people money for opting in for something? Using some nordic countries as example, many of them help people by giving them money each month in order to survive. These people are not too proud or scared to claim free money when they need it. My guess is that people from the US will act similarly.
  - tialaramex 7y ago
    Specifically for giving cash money? No. But the UK has experience with benefits that are automatic versus have to be claimed and it's noticeable. As an example elderly people in the UK are entitled to use some types of public transport at no cost so as to ensure they don't end up isolated (of course right now isolating them is a good idea, but ordinarily it's a problem). But the entitlement takes the form of a smartcard with photo ID. So of course you need to do paperwork to get it. The very wealthiest may not bother, if you have a chauffeur who cares about free bus travel? But the poorest don't apply at anywhere close to expected rates, because somebody needs to explain to them that they need to apply, help them take a photograph and upload it, and so on. Are you sure about Nordic countries just "giving people" money with no strings attached? They have much better social safety nets than the US, which are important for softening things like this - but an improved social safety net is not free money.

snarf21 7y ago

Morally that is the right choice. Politically, there will never be a way to pick only the people who really need it. Everyone makes that more tenable.

heymijo 7y ago

Implied in your comment is that today's crisis is one similar to 2008 in that the economy needs "stimulus." Today's crisis is different. The regular economy is grinding to a halt because we have to in attempts to slow the spread of the coronavirus. What individuals and every component of the economy need are deferral and cancellation. Rubidium talked about it in another post. [0] $1,000 to a family that is living paycheck to paycheck doesn't solve the problem. Do a search and most surveys put America at somewhere between 70-80% of workers living paycheck to paycheck. So let's discuss giving Americans money but only to move the Overton Window. Then let's lead that discussion to solutions that address the fragility of our economic problems at their root--both in the short-term and long-term. [0] https://news.ycombinator.com/item?id=22604982 https://news.ycombinator.com/item?id=22604982

xefer 7y ago

I've seen people mention putting some sort of "use it or lose it" time limit on the money, so that people are motivate to inject it directly into the economy instead of just sitting on it. I'm not sure how feasible such a thing is or if it would hurt the cause of keeping the economy moving.

sailfast 7y ago
I just don't know how you would enforce this and even if this money "only" helps a family with some means have a cushion to worry a bit less so they can continue as they were it would be productive for markets. Say you send a prepaid Visa card (this would be terrible because of fees but go with it) to everyone with an expiration date, it'd be easy to parlay that into vehicles that were not "spending" (gift cards, other pre-paid cards, etc) and regulating that is a nightmare. Once you get into qualifiers and enforcement regimes you're slowing things down and adding percent costs to each dollar provided. I'd say keep it simple.

sailfast 7y ago

"Means testing is hard. [Sending a check] is easy." Don't add the overhead / cost / etc for the benefit - speed is key, just cut the check in my opinion.

oiasdjfoiasd 7y ago

no, we should just give it to everyone.

Amygaz 7y ago

I agree in the sense that money will go further when pooled, than if you just give it UBI's style. But, this is a societal crisis, not an individual one. It is not fair to ask people to pull themselves out of a situation that they did not create, but that our unaccountable government did create. An example: restaurant are struggling and some people need food. Give money to Town gov, so they can buy food from restaurants and serve that in community center. Adjust volume as needed. Plus the whole financial easing they are trying is dumb. It would be useful if the intention was not to control what is happening with the public markets. We just do not really control those, not on a daily basis anyway. Algorithms heavily relying on market volatility control those, and that is what they are doing right now. So, seeing an administration believing that humans are in control of a mostly automated trading system is dumb. While the evolution of new virus with pandemic property is not something we control. Its propagation to pandemic level is something we have absolute control on. We are failing as a society, because we allow those things to happen.

bargl 7y ago

I think the simplest solution is to give money and raise taxes on the top 60%. Undo what Trump put in place and go back to taxing Americans a little more. This way the benefit only applies to the bottom 40% of tax brackets and at 40-60 you pay some if not all back and 60+ you pay it all back and more. Then it's a fair safety net that everyone can see might be necessary in these times. This is just a thought, I'd actually just put Yang in charge of this.

black_13 7y ago

This attitude is why things do get done.

java_script 7y ago

How charitable, now to implement that everyone has to prove their level of income and assets before receiving aid and will unnecessarily screw people on the margins in situations you didn’t imagine up front. Stuff like that gets implemented (usually, in America) as a non-refundable tax credit meaning the poorest get nothing as well. Just cut the check, tax the rich, and don’t make more paperwork.

jonnycomputer 7y ago

In general, giving things only to poor people generates opposition to the program giving it. The attitude is, "Why should my hard work pay for those lazy people." Means testing can also add a lot of overhead and headaches for the people involved. My suggestion: use it to pay down your upcoming tax bill, give it to people you know could use it, if you order food, leave some really fat tips for the delivery guy, donate to charity.

pythonaut_16 7y ago
Using what you don't need to further help people around you is a really great suggestion!

JoeAltmaier 7y ago

It often costs more than the money, to set up a bureaucracy just to decide who gets it.

dominotw 7y ago

> As long as the money is given to folks who need and/or will spend it only if admin cost to determine if a person needs it is low enough.

gdubs 7y ago

There are a lot of businesses out there that are non-essential services, that will be hit hard by this. Someone still has to shop at the local bookstore when this is over, because those people – even with direct stimulus – will be struggling to stay afloat. If we want to start the economic flywheel spinning again, it's gonna take stimulus at pretty much all levels. Most working class people will spend that money directly on essential goods and services. But for the health of the overall economy, it's important that enough people will have enough that they feel confident they can start going out again and supporting all sorts of shops.

egypturnash 7y ago

The government pulled more money than this out of thin air to throw at the stock market just the other day, only to watch it vanish just as quickly. Money is a fiction that we have invented to grease the wheels of commerce. Why bother creating a bunch of rules that people have to apply in the middle of a crisis? You are living human who has not received this month's stimulus yet, great, here you go, good luck and blessings upon your health. Bureaucracies take time to spin up, more complex rules take longer to apply, and there are a huge number of people whose jobs are destroyed by "don't go outside until the virus dies off". If you are way too rich for a thousand bucks to mean anything, then give it to someone who needs it more. Maybe a super-broke friend, maybe just withdraw a few hundreds and hand them out to homeless folks, whatever.

thatfrenchguy 7y ago

> A yuppie like me would just park it in my savings account until I feel we hit bottom, then invest it. I would personally feel obligated to spend it, and I normally save 75% of my income.

notatoad 7y ago

normally a stimulus works because if you give people $1000, people will go and spend at least some of it. With most options for discretionary spending shut down, there's really just two things left to spend on: rent and groceries (and i guess: amazon orders). $1000 to every american right now will end up just being a huge payment to landlords. i'm not saying it's a bad idea, people still need to make rent and buy food, but it's not going to stimulate anything. grocery stores are already bringing in record revenues, and landlords don't need the money. It's financial aid, not a stimulus.

Certhas 7y ago

How do you decide who needs it? I think the sane option really would be to give it to everyone and increase taxes to compensate. Progressive taxes fall most heavily on those that can afford them. They are the best tool for this job. Of course to really get this fair, you should tax wealth too, which tends to be difficult...

pwinnski 7y ago

Combine a handout with negative interest rates, and you almost guarantee it will all be spent, as it loses value sitting in a savings account.

jhayward 7y ago

> There’s no pull yourself up by your bootstraps talk right now and there shouldn’t be. Joint statement by conservatives Stephen Moore, Art Laffer, Steve Forbes: "Don’t expand welfare and other income redistribution benefits like paid leave and unemployment benefits that will inhibit growth and discourage work" [1] [1] https://twitter.com/JStein_WaPo/status/1239938361231585286 https://twitter.com/JStein_WaPo/status/1239938361231585286

markvdb 7y ago

Why not _offer_ helicopter money to everyone instead of giving it? Allow people to accept it, but don't oblige them to. Keep it universal and simple, but optimise for cost: - A/B test the messaging. - Make it opt out for lower incomes and opt in for higher incomes. - (?) Offer opt out-ers the possibility to dedicate part of their helicopter money to specific budgets (culture, army, police, medical care, ...)

eru 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. No, it's still a bad idea as stimulus. It might or might not be the right idea from a humanitarian point of view. No opinion on that topic. But if you care about nominal spending in the American economy, the Fed can do the job just fine. Just have them buy assets until total nominal spending (and thus also inflation) is up where you want it. Start with American government bonds, but if that's not enough, expand to other assets as well and keep buying. You may ask: what if this doesn't work to raise spending nor inflation? Well, that's the best case! Congratulations: that means the Fed just bought up all the assets in the world in return for some ink and paper. [0] And all that without devaluing the dollar, since we assumed no inflation would result. Your negative example of people _not_ spending the money they are given turns into the best kind of person you want to be buying assets from, if you are the creator of said money. Of course, in practice this will raise spending. Especially if you announce the policy in a clear and credible way, spending will increase almost immediately even before you implement anything. Markets are all about anticipating expected events. No need to enlarge the government budget or the deficit. Oh, and if you are looking for practical steps to raise spending in the economy and the above programme is too radical for you; then a simple first step is to eliminate positive interest rates on (excess) reserves that banks park at the Fed. In the Fed's defense, they lowered the interest on excess reserves to 0.1%. But you can argue that they should lower it further, perhaps to -1%. Make banks pay to park money at the Fed, so that they prefer bringing that money into the real economy. Either by spending it themselves, or by lending it to people to spend it for them. [0] To be more precise: in return for some even cheaper to create numbers in a computer. Nobody prints these sums of money any more.

sershe 7y ago

Or perhaps stop obliterating an economy and let them actually live. My sister and I were raised by a single mother in Russia in the 90ies, and we did relatively well compared to many. Mom mentioned once that she didn't really regret not having any hobbies or personal life for 10 years, not only because she loves us, but because she really didn't have time or mental effort required to seriously ponder these things, in almost a decade. That was all, mostly, because of economic mismanagement. If you look at the life expectancy chart for Russia at that time, and births - both, again, affected by economic mismanagement - it's quite obvious that it would have been much better even in terms of literal years life lost to have a magical smooth economic transition in 1991, followed by a 100% unchecked coronavirus epidemic. The unchecked covid-19 would have caused far less harm that what the real loss of life was; and that is before you consider lives wasted - the struggle to survive, but also drug use, alcoholism, crime, suicide statistics from the period. Oh and of course the end result - in Russia, most now want stability at any cost, so you have an emperor for life. This recession is looking like it's going to be bad, and politicians from NZ to Malaysia to the UK are saying it's going to be worse than the last one or 1997 one; the way Fed is handling it here indicates they expect something worse than Great Depression, or they are out of options and are going to run it completely into the ground. Meanwhile, the damage from the actual virus /so far/ is zero, literally zero, a rounding error. Yes, I know about Italy - the deaths there up until now are still a rounding error. Yes, I know about the exponential growth - the current levels are still a rounding error; they will grow exponentially, but exponential growth runs out very, very quickly when it has an upper bound of the entire population. It would have been much better to have a one-month-long healthcare collapse where a million people with an average age of 60+ die, instead of a prolonged recession or a depression where tens/hundreds of millions of people in US alone, disproportionately young, children, the poor (not even speaking of the people in developing countries), have their life completely ruined - for many, forever; and many die.