6 ms·

The hypothetic "economic devastation" has a very simple political solution. An epidemic raging throughout the country doesn't. The economic problem is only a

The hypothetic "economic devastation" has a very simple political solution. An epidemic raging throughout the country doesn't. The economic problem is only a problem if the political leadership decides to do nothing at all.

kelchm 6y ago
The economic devastation is hardly hypothetical at this point. It’s happening and clearly observable even here in the US. Claiming that there is a simple political solution to the current global economic situation is beyond disingenuous.
- deleted 6y ago
  [deleted]
- mrgreenfur 6y ago
  I think he's alluding to the option of giving money to people instead of to companies; this will alleviate personal devastation.
  - downerending 6y ago
    That sounds good, but how does it play out? We could maybe afford to pay everyone $10K/y for a few years, especially now that we're printing money like crazy. And we'd just let companies go bankrupt and the economy as we know it seize tight. Businesses would generally be wiped out, and your mom-and-pop outfits that worked their entire lives to build something would be on the dole like the rest of us. With the private economy gone, the government could run "essential" industries. It could probably do an okay job of allocating talent, I guess. It's kind of like turning a firehose on an overheating server rack. It might work...
    - cmendel 6y ago
      10K? What are you talking about? We blew 30 Trillion! in a month! With that we could give every person in the USA 90K!
      - downerending 6y ago
        That was just a for-instance. That said, the $30T probably hasn't actually been expended. Rather, it was used to buy assets that are likely worth less than $30T right now. How much less? Who knows. My guess, though, is that the Fed (or Feds) will eventually recoup most of that. When you give peons like us $10K, you don't get any of it back, except in taxes. I'm not that knowledgeable on the subject, but I do know that when given a choice between keeping your seed corn dry and eating it, you need to think very hard about what you're doing.
        cmendel 6y ago
        >When you give peons like us $10K, you don't get any of it back, except in taxes. Where do you think it goes exactly? This might help explain our disconnect: https://en.wikipedia.org/wiki/Velocity_of_money https://en.wikipedia.org/wiki/Velocity_of_money
        downerending 6y ago
        I was specifically addressing the idea that $30T was given to companies. This simply isn't correct. A better analogy would be if the government decided to "give" $90K to each homeowner in return for a $90K share in their home equity (valued according to some plausible marking). That's very different than simply giving them $90K with no strings attached. Certainly something is being given, but it's not worth anything like $90K.
  - 100ideas 6y ago
    On the eve of passing the first $2 trillion stimulus package, final deliberations in the US Congress about the "best" way to use the funds devolve into partisan deadlock: One side insists that the only rational policy is for approximately 100% of the funds to be used to prevent business failures, arguing that "1) citizens need businesses to employ them so they can earn the monies they need to avoid starvation and homelessness with enough leftover (or at least a line of credit) for consumer consumption to collectively drive 70% of the economy; 2) the economy is literally made out of businesses and if too many die, then by definition so will economy; and 3) failed businesses take longer and are more costly (in capital investments) to repair/replace than are the jobs/homes/lives of the employees that must be sacrificed to save the company. "On the contrary!", says the almost-equally-sized other half of the legislature, "Approx 100% of the funds to be distributed directly to citizens, $6000 each, thus 'cutting out the the middleman employers' and maximizing the number of citizens saved from homelessness and starvation due to unemployment. THIS is the optimal policy, both economically AND morally!" To break the deadlock, Congress selects YOU as stimulus policy czar: your job is to decide and justify how best to distribute the stimulus funds - primarily distributed to businesses, primarily distributed directly to citizens, or some compromise between?
    - 100ideas 6y ago
      I’m going to take an extreme position in the hopes it “stimulates” conversation: the best course is $6k direct citizen payments. Business that fail create new niches some of the gritty but solvent ex-employed can try to exploit with new startups. Also, if the stimulus in the scenario was $4 trillion total, each citizen could be given/loaned ~$12000; by pooling their stimuli payments, tens of individuals and/or large families could potentially have enough capital to take a risky shot on a startup / small biz.
      - ianai 6y ago
        It’s bizarre that this is an extreme position. It underscores how far and extreme US politics has become that supporting people is viewed so negatively while bailing out multinational corporations goes without saying. Being too big to fail is a sign that a company should be busted up into smaller companies, but I digress... I highly doubt startups would form around families just due to people getting one time large payments like 12k. If you have a family of 10 you’re going through 120k plenty quickly with just food, shelter, and other necessities. So much so that the money would have a huge multiplier effect at sustaining local demand for essential goods and services.
  - dnautics 6y ago
    "this will alleviate personal devastation" Will it? Or will it just push it out over time? Or something else completely? Can you say with certainty that more people won't die of despair if we give people money? Does it depend on doing something a certain way? Are there some ways of doing things better than others? How much depends on the effectiveness policymakers (politicians) versus implementors (bureaucrats)? I don't think we can say for certain "doing nothing" is categorically worse than "doing something".
    - newen 6y ago
      This is hilarious.
      - dgzl 6y ago
        Thanks for thinking it's more important for citizens to get free cash instead of job-creators, seems like a good time to buy a new gun.
    - dgzl 6y ago
      Agreed. You can't just dump money into citizens' pockets with no expectation of return. Giving an engine gas doesn't make the engine more efficient at using the gas, it just let's us get to the next mechanic. And that's what we need, good mechanics. So how do we spend our money, buying enough gas to get part way to our goal, or spend the money on the mechanics to make our engine efficient enough so we can get to our goal with less gas than we need?
      - clawedjird 6y ago
        You can't just dump money into citizens' pockets with no expectation of return. Giving an engine gas doesn't make the engine more efficient at using the gas Maybe the point isn't to generate a financial return or increase the efficiency of the "engine." Maybe the point is simply to prevent hypothetical deaths resulting from "economic devastation." Maybe the car engine just needs enough gas to make it to the next gas station, not extensive re-engineering.
- clawedjird 6y ago
  Well, we can't exactly prevent people from dying of a virus that's largely outside of our control. We can enact policies to prevent people from dying due to a lack of basic resources, however. Unfortunately, contrary to what many seem to believe, this isn't a case of choosing between two evils. It's not as if we can avoid economic consequences by simply ignoring the virus. Business as usual won't exist, with or without mandated lockdowns, until the threat of the virus has passed. Neither can we simply defeat the virus by shutting down all economic activity, even if that were possible. The solution to this crisis will likely require a combination of luck, technological progress, and well-executed policy. That said, I'll reiterate that keeping people from dying due to "economic devastation" is very much within our present capabilities and doesn't depend on global economic recovery. Of course, that doesn't mean that we'll (well, those in a position to choose, anyway) make the choice to do so.
  - s1artibartfast 6y ago
    >That said, I'll reiterate that keeping people from dying due to "economic devastation" is very much within our present capabilities and doesn't depend on global economic recovery. Very true, but the most likely outcome is that people will not exercise their power to reduce the hardship in the third world. Most people of means did not bother to end starvation in the 3rd world before this, why would they be more likely when they are in worse economic position. How much have you personally donated to end starvation before this? If you haven't, what made you make the choice not to?
    - clawedjird 6y ago
      I agree, unfortunately.
    - pasabagi 6y ago
      Charity is more of a symptom of than a cure of poverty. Nations that kept the 'charity is a big part of welfare' model typically have high levels of poverty, even if they're wealthy. The US is the standout example of this. Nations that treat it as a basic function of government, and a right of the governed, to be able to eat and receive medicine, don't usually have a problem with that kind of poverty. I think it's about how people think of their rights. If somebody has a right to something, they can't receive it as a gift. It is theirs, no matter who holds it. If it isn't a right, then it can always be legally withheld. Charity celebrates the gift-giving side of the equation, but it conceals the darker side: that charity doesn't make sense if it isn't backed up by people taking property rights more seriously than basic needs. If basic needs are protected by law, it's not a charitable donation, it's a tax.
- casefields 6y ago
  Those that say the answer is simple, really do think making the money printer go brrrrrr is the answer. Modern Monetary Theory is helping them along, but it remains to be seen what will actually happen.
deleted 6y ago
[deleted]
ars 6y ago
You can't eat money. If you give everyone money, but people aren't working, aren't producing anything, then your country is just as poor as before. The economic backbone of a country is not money, it's work. So giving money in bulk does not replace work. (You can do it targeted, for small sections of the population, but you can't do it for everyone.)
- somewhereoutth 6y ago
  Indeed. However, if it is necessary to reduce output in order to control the virus, it surely must be fair to distribute that loss evenly. Hence the point of helicopter money is exactly that - to ensure that those who are unable to work (and have no other source of income) do not carry a disproportionate burden through this situation. EDIT: Furthermore - if you give someone who is broke $1200, they will likely go out and spend it on food and essentials - hence significant (for them) resources are allocated towards them. If you gave the same to a multi-millionaire, the chances are that it would have zero effect on their consumption. Likely it would end up in their bank account (if they could be bothered to cash it) - where it would contribute to the slight erosion of the value of money.
  - Accujack 6y ago
    >Indeed. However, if it is necessary to reduce output in order to control the virus, it surely must be fair to distribute that loss evenly. A fine point here - it's only fair if the profit in non pandemic circumstances is also distributed evenly, which isn't the case.
- casefields 6y ago
  But you can feed the stove for warmth! https://library.randolphschool.net/c.php?g=237930&p=1581974 https://library.randolphschool.net/c.php?g=237930&p=1581974
- fragmede 6y ago
  I did some research, and if it is correct, the money is to be used to buy food. Further research leads to believe that, with some additional work, food can be eaten. The backbone of a country is its people. If everyone starves to death, there is no more country. Giving money in bulk is to paper over the cracks in the system. For most of us on here, we're lucky enough to have transitioned to working remotely, and have enough savings to live off of for some time so as to not worry about rent or mortgage payment. Food insecurity isn't a thing to contend with, outside of fraught trips to the supermarket. Others have no such luck, and missing even a single paycheck, or single digit hours out of one, upsets the delicate balance that is the payday loan repayment house of cards. Except that four out of five Americans live paycheck to paycheck[0], so it's most Americans that have no such luck. Those Americans will go broke, hungry, and would be borderline homeless. Giving money is to alleviate those conditions. People aren't working because we're telling them not to. Ergo, giving money in bulk. Not to replace work, but to supplant it when it isn't an option. There are those that want to replace work with bulk money transfers, but you don't have to buy into the idea of UBI to recognize that giving people money so they don't starve is better than the alternative. [0] https://www.forbes.com/sites/zackfriedman/2019/01/11/live-paycheck-to-paycheck-government-shutdown/#269135014f10 https://www.forbes.com/sites/zackfriedman/2019/01/11/live-pa...

kelchm 6y ago

The economic devastation is hardly hypothetical at this point. It’s happening and clearly observable even here in the US. Claiming that there is a simple political solution to the current global economic situation is beyond disingenuous.

deleted 6y ago
[deleted]
mrgreenfur 6y ago
I think he's alluding to the option of giving money to people instead of to companies; this will alleviate personal devastation.
- downerending 6y ago
  That sounds good, but how does it play out? We could maybe afford to pay everyone $10K/y for a few years, especially now that we're printing money like crazy. And we'd just let companies go bankrupt and the economy as we know it seize tight. Businesses would generally be wiped out, and your mom-and-pop outfits that worked their entire lives to build something would be on the dole like the rest of us. With the private economy gone, the government could run "essential" industries. It could probably do an okay job of allocating talent, I guess. It's kind of like turning a firehose on an overheating server rack. It might work...
  - cmendel 6y ago
    10K? What are you talking about? We blew 30 Trillion! in a month! With that we could give every person in the USA 90K!
    - downerending 6y ago
      That was just a for-instance. That said, the $30T probably hasn't actually been expended. Rather, it was used to buy assets that are likely worth less than $30T right now. How much less? Who knows. My guess, though, is that the Fed (or Feds) will eventually recoup most of that. When you give peons like us $10K, you don't get any of it back, except in taxes. I'm not that knowledgeable on the subject, but I do know that when given a choice between keeping your seed corn dry and eating it, you need to think very hard about what you're doing.
      - cmendel 6y ago
        >When you give peons like us $10K, you don't get any of it back, except in taxes. Where do you think it goes exactly? This might help explain our disconnect: https://en.wikipedia.org/wiki/Velocity_of_money https://en.wikipedia.org/wiki/Velocity_of_money
        downerending 6y ago
        I was specifically addressing the idea that $30T was given to companies. This simply isn't correct. A better analogy would be if the government decided to "give" $90K to each homeowner in return for a $90K share in their home equity (valued according to some plausible marking). That's very different than simply giving them $90K with no strings attached. Certainly something is being given, but it's not worth anything like $90K.
- 100ideas 6y ago
  On the eve of passing the first $2 trillion stimulus package, final deliberations in the US Congress about the "best" way to use the funds devolve into partisan deadlock: One side insists that the only rational policy is for approximately 100% of the funds to be used to prevent business failures, arguing that "1) citizens need businesses to employ them so they can earn the monies they need to avoid starvation and homelessness with enough leftover (or at least a line of credit) for consumer consumption to collectively drive 70% of the economy; 2) the economy is literally made out of businesses and if too many die, then by definition so will economy; and 3) failed businesses take longer and are more costly (in capital investments) to repair/replace than are the jobs/homes/lives of the employees that must be sacrificed to save the company. "On the contrary!", says the almost-equally-sized other half of the legislature, "Approx 100% of the funds to be distributed directly to citizens, $6000 each, thus 'cutting out the the middleman employers' and maximizing the number of citizens saved from homelessness and starvation due to unemployment. THIS is the optimal policy, both economically AND morally!" To break the deadlock, Congress selects YOU as stimulus policy czar: your job is to decide and justify how best to distribute the stimulus funds - primarily distributed to businesses, primarily distributed directly to citizens, or some compromise between?
  - 100ideas 6y ago
    I’m going to take an extreme position in the hopes it “stimulates” conversation: the best course is $6k direct citizen payments. Business that fail create new niches some of the gritty but solvent ex-employed can try to exploit with new startups. Also, if the stimulus in the scenario was $4 trillion total, each citizen could be given/loaned ~$12000; by pooling their stimuli payments, tens of individuals and/or large families could potentially have enough capital to take a risky shot on a startup / small biz.
    - ianai 6y ago
      It’s bizarre that this is an extreme position. It underscores how far and extreme US politics has become that supporting people is viewed so negatively while bailing out multinational corporations goes without saying. Being too big to fail is a sign that a company should be busted up into smaller companies, but I digress... I highly doubt startups would form around families just due to people getting one time large payments like 12k. If you have a family of 10 you’re going through 120k plenty quickly with just food, shelter, and other necessities. So much so that the money would have a huge multiplier effect at sustaining local demand for essential goods and services.
- dnautics 6y ago
  "this will alleviate personal devastation" Will it? Or will it just push it out over time? Or something else completely? Can you say with certainty that more people won't die of despair if we give people money? Does it depend on doing something a certain way? Are there some ways of doing things better than others? How much depends on the effectiveness policymakers (politicians) versus implementors (bureaucrats)? I don't think we can say for certain "doing nothing" is categorically worse than "doing something".
  - newen 6y ago
    This is hilarious.
    - dgzl 6y ago
      Thanks for thinking it's more important for citizens to get free cash instead of job-creators, seems like a good time to buy a new gun.
  - dgzl 6y ago
    Agreed. You can't just dump money into citizens' pockets with no expectation of return. Giving an engine gas doesn't make the engine more efficient at using the gas, it just let's us get to the next mechanic. And that's what we need, good mechanics. So how do we spend our money, buying enough gas to get part way to our goal, or spend the money on the mechanics to make our engine efficient enough so we can get to our goal with less gas than we need?
    - clawedjird 6y ago
      You can't just dump money into citizens' pockets with no expectation of return. Giving an engine gas doesn't make the engine more efficient at using the gas Maybe the point isn't to generate a financial return or increase the efficiency of the "engine." Maybe the point is simply to prevent hypothetical deaths resulting from "economic devastation." Maybe the car engine just needs enough gas to make it to the next gas station, not extensive re-engineering.
clawedjird 6y ago
Well, we can't exactly prevent people from dying of a virus that's largely outside of our control. We can enact policies to prevent people from dying due to a lack of basic resources, however. Unfortunately, contrary to what many seem to believe, this isn't a case of choosing between two evils. It's not as if we can avoid economic consequences by simply ignoring the virus. Business as usual won't exist, with or without mandated lockdowns, until the threat of the virus has passed. Neither can we simply defeat the virus by shutting down all economic activity, even if that were possible. The solution to this crisis will likely require a combination of luck, technological progress, and well-executed policy. That said, I'll reiterate that keeping people from dying due to "economic devastation" is very much within our present capabilities and doesn't depend on global economic recovery. Of course, that doesn't mean that we'll (well, those in a position to choose, anyway) make the choice to do so.
- s1artibartfast 6y ago
  >That said, I'll reiterate that keeping people from dying due to "economic devastation" is very much within our present capabilities and doesn't depend on global economic recovery. Very true, but the most likely outcome is that people will not exercise their power to reduce the hardship in the third world. Most people of means did not bother to end starvation in the 3rd world before this, why would they be more likely when they are in worse economic position. How much have you personally donated to end starvation before this? If you haven't, what made you make the choice not to?
  - clawedjird 6y ago
    I agree, unfortunately.
  - pasabagi 6y ago
    Charity is more of a symptom of than a cure of poverty. Nations that kept the 'charity is a big part of welfare' model typically have high levels of poverty, even if they're wealthy. The US is the standout example of this. Nations that treat it as a basic function of government, and a right of the governed, to be able to eat and receive medicine, don't usually have a problem with that kind of poverty. I think it's about how people think of their rights. If somebody has a right to something, they can't receive it as a gift. It is theirs, no matter who holds it. If it isn't a right, then it can always be legally withheld. Charity celebrates the gift-giving side of the equation, but it conceals the darker side: that charity doesn't make sense if it isn't backed up by people taking property rights more seriously than basic needs. If basic needs are protected by law, it's not a charitable donation, it's a tax.
casefields 6y ago
Those that say the answer is simple, really do think making the money printer go brrrrrr is the answer. Modern Monetary Theory is helping them along, but it remains to be seen what will actually happen.

deleted 6y ago

[deleted]

ars 6y ago

You can't eat money. If you give everyone money, but people aren't working, aren't producing anything, then your country is just as poor as before. The economic backbone of a country is not money, it's work. So giving money in bulk does not replace work. (You can do it targeted, for small sections of the population, but you can't do it for everyone.)

somewhereoutth 6y ago
Indeed. However, if it is necessary to reduce output in order to control the virus, it surely must be fair to distribute that loss evenly. Hence the point of helicopter money is exactly that - to ensure that those who are unable to work (and have no other source of income) do not carry a disproportionate burden through this situation. EDIT: Furthermore - if you give someone who is broke $1200, they will likely go out and spend it on food and essentials - hence significant (for them) resources are allocated towards them. If you gave the same to a multi-millionaire, the chances are that it would have zero effect on their consumption. Likely it would end up in their bank account (if they could be bothered to cash it) - where it would contribute to the slight erosion of the value of money.
- Accujack 6y ago
  >Indeed. However, if it is necessary to reduce output in order to control the virus, it surely must be fair to distribute that loss evenly. A fine point here - it's only fair if the profit in non pandemic circumstances is also distributed evenly, which isn't the case.
casefields 6y ago
But you can feed the stove for warmth! https://library.randolphschool.net/c.php?g=237930&p=1581974 https://library.randolphschool.net/c.php?g=237930&p=1581974
fragmede 6y ago
I did some research, and if it is correct, the money is to be used to buy food. Further research leads to believe that, with some additional work, food can be eaten. The backbone of a country is its people. If everyone starves to death, there is no more country. Giving money in bulk is to paper over the cracks in the system. For most of us on here, we're lucky enough to have transitioned to working remotely, and have enough savings to live off of for some time so as to not worry about rent or mortgage payment. Food insecurity isn't a thing to contend with, outside of fraught trips to the supermarket. Others have no such luck, and missing even a single paycheck, or single digit hours out of one, upsets the delicate balance that is the payday loan repayment house of cards. Except that four out of five Americans live paycheck to paycheck[0], so it's most Americans that have no such luck. Those Americans will go broke, hungry, and would be borderline homeless. Giving money is to alleviate those conditions. People aren't working because we're telling them not to. Ergo, giving money in bulk. Not to replace work, but to supplant it when it isn't an option. There are those that want to replace work with bulk money transfers, but you don't have to buy into the idea of UBI to recognize that giving people money so they don't starve is better than the alternative. [0] https://www.forbes.com/sites/zackfriedman/2019/01/11/live-paycheck-to-paycheck-government-shutdown/#269135014f10 https://www.forbes.com/sites/zackfriedman/2019/01/11/live-pa...