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I feel like there is a disproportionate focus on relatively small dollar errors and fraud. The point was to get money to people who need it and to keep the econ
by eli 6y ago
I feel like there is a disproportionate focus on relatively small dollar errors and fraud. The point was to get money to people who need it and to keep the economy from collapsing for everyone. Setting up mechanisms to try to catch every mistake would probably have cost more money than it would have saved and definitely would have unnecessarily delayed people getting checks. The stimulus was too small and too slow to begin with.
- acdha 6y agoYes - this was a $2.2 trillion dollar relief bill and the total amount in question is well under $34 million (that number included Americans living abroad). That’s smaller than the amounts individual businesses claimed inappropriately and delaying sending the checks to check all of the recipients would probably have cost more since a lot of that money went straight into the economy paying taxes and keeping people employed.
- adultSwim 6y agoIt was actually much larger. 5 trillion was made to only look like 500 billion, using a technical trick. Of the 2.2 trillion, 500 billion was set aside for whatever. This was often reported as the part for big business. Actually it's 500b to seed new special purpose banks that can operate with 10 to 1 leverage. So the 500b is actually 5.5t, making the whole bill several times larger than widely discussed. I'm reminded of the "chain CPI" fiasco where Congress tried to reduce Social Security, but hid it in a technical detail. Except this time Democrats were on board. Neither party challenged the main narrative, and so the media didn't bother to either.
- nick0garvey 6y agoDo you have a source on this 500b allocation? Not finding anything on a quick search.
- sacomo 6y agoNot OP, but found this: https://indivisiblesf.org/blog/2020/4/28/the-cares-act-will-shape-our-economy-for-the-next-decade-or-longer-heres-why-thats-dangerous https://indivisiblesf.org/blog/2020/4/28/the-cares-act-will-... > the CARES Act may end up serving as the second largest transfer of wealth from the working class to the wealthy in our lifetimes.
- xxpor 6y agohow is that a technical trick? $500 billion is what'd come out of the treasury, which is what matters. I'm certain some of the $1200 checks were put in banks, which they went and turned around into loans at whatever the current fraction is too...
- gizmo686 6y agoMore than that; the entire point of the $1,200 was to get people money quickly to buy time to work out a longer term solution (some of the proposed longer term solutions happened to involve some form of ongoing stimulus checks modeled after the initial one).
- pc86 6y agoAnd instead what we got was the PPP and EIDL, the majority of which ended up going to huge corporations (I know Ruth's Chris returned it after the staggering public backlash). And those of us on this forum just worked from home and continued getting our paychecks. I don't know a single person that lives paycheck to paycheck in a working or middle-class job who got anything more than that $1,200.
- paulpauper 6y agoI don't think the $1200 helped that much, A large chunk (33%) of the money was saved and another chunk invested. I think politicians and media oversold the efficacy of stimulus.
- MR4D 6y agoApparently, many of the middle class invested in the market according to reports [0]. Maybe not the best form of savings for some, but I’m not here to argue one way or another. [0] - https://www.cnbc.com/2020/05/21/many-americans-used-part-of-their-coronavirus-stimulus-check-to-trade-stocks.html https://www.cnbc.com/2020/05/21/many-americans-used-part-of-...
- adventured 6y agoAnd collectible cards (baseball, basketball, football, pokemon, magic the gathering, etc). The card market exploded upward during the pandemic. (existing asset bubbles from low rates + $1,200 onto the fire + people stuck inside = huge shot of demand from buyers of cards; it wouldn't do much in the million dollar art world, however most cards are obviously more in the affordable range as it pertains to a $1,200 injection). The stock (CLCT) for the largest card grading service went up 200% over the past year, after hardly moving the prior four or five years.
- ttul 6y agoYes. It’s as if sending out hundreds of millions of checks during an unprecedented economic crisis might be somewhat of a challenge for the people who have to make it happen on an instantaneously urgent basis...
- astura 6y agoYep, this exact point is addressed in the article as well >"It's awful when we hear of millions of dollars going into the wrong hands," he added, "but it was probably within a somewhat acceptable threshold of error or margin of error" because Congress opted for speed over accuracy when it flooded the U.S. economy with money last spring I also remember at that time hearing talking heads saying things to the effect of "we are getting money out to everyone now, we'll worry about collecting it back from people who aren't eligible later." IIRC some federal government money can be withheld if you owe the IRS and most of these recepients seem to be collecting social security so it seems just docking future SS payments to collect back the $1,200 might be the best solution. Even if it can't be collected that way with existing laws, Congress can always pass a law allowing it. Though many checks might not be cashed in the first place if the recipient didn't have an American bank account.
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- paulpauper 6y agoBut the checks have long stopped yet the economy has not collapsed. THE S&P 500 made new highs. Corporate earnings are still very strong. Although unemployment is higher than usual, the economy is far from collapse or recession. The 3 quarter GDP up 33% and forecasts for q4 and 2021 remain strong in spite of checks stopping. This narrative that the economy hinges on stimulus checks is part of the media and political spin.
- morelisp 6y agoFood insecurity and food bank use is at record highs among US residents this year. That's a considerably better indicator of real economic health than any index. https://www.theguardian.com/food/2020/nov/25/us-hunger-surges-spiraling-pandemic https://www.theguardian.com/food/2020/nov/25/us-hunger-surge...
- pjc50 6y agoIt appears the economy has ascended to the paperclip-maximiser stage where it doesn't actually need people not to be starving.
- jschwartzi 6y agoOnly if you conflate "The Dow" or "The S&P 500" as the "economy." People who only watch the number go up think things are going well, while people who look at how real people fare in this crisis think things are going poorly.
- matsemann 6y agoYeah, why aren't people out celebrating that DOW hit 30k or so? Maybe because all those metrics have almost no correlation how a below median income household operates.
- Sohcahtoa82 6y agoStocks are only an indication on how the rich are doing. Why don't you ask the waitress at Denny's who's had her hours cut in half how the S&P 500 affects her?
- leftyted 6y agoIronically, the idea you're pushing, something like "this doesn't really matter, the important thing is the government giving people money, the more the better, who even cares if they're American," precisely represents the best objections to the welfare state. Which are its shoddiness, its lack of administrative rigor, and so on. These objections raise the question: can a welfare state be effective if it's administered so poorly? If the American government is sending money to Swedes, can we trust it to send money to "people who need it"? Does Sweden send welfare checks to Americans who aren't Swedish citizens? If not, perhaps that partly explains why the Swedes are more comfortable with an expansive welfare state than Americans.
- gen3 6y agoI think it’s important to remember that one of the goals during this process was speed. The government could surly be more accurate in their distribution of the 1,200$, but it would come at the expense of time. Getting the stimulus check in 2021 would be worth way less.
- forinti 6y agoOne error in 10 thousand is not shoddy at all. I bet it would cost more than $1200 eliminate each of those errors.
- MauranKilom 6y ago> the idea you're pushing, something like "this doesn't really matter, the important thing is the government giving people money, the more the better, who even cares if they're American," I'm almost unsure how to reply because you seem to ignore the central point of the comment you're replying to. Your characterization omits the most salient point: That it had to be done fast. I don't see how the tradeoffs in emergency distribution of funds are in any way indicative of whether you can trust welfare states to be administered properly or not. The comment was precisely about "lack of administrative rigor" being warranted in favor of preventing greater harm. > Does Sweden send welfare checks to Americans who aren't Swedish citizens? If not, perhaps that partly explains why the Swedes are more comfortable with an expansive welfare state than Americans. I don't understand how this point relates to the general value of welfare systems that you are discussing. Are you saying an American welfare system has to be inherently less reliable? Or that there are more Americans than Swedes so statistically Sweden will receive more accidental checks from America than the reverse? Could you elaborate?
- ericbarrett 6y agoCompletely agree. The real scandal has been egregious unemployment claims fraud. Hundreds of millions from California alone, and multiple states have been targeted[0]. [0] https://www.nytimes.com/2020/11/24/us/california-unemployment-fraud-inmates.html https://www.nytimes.com/2020/11/24/us/california-unemploymen...
- eli 6y agoI'm frankly much more concerned about the people who were incorrectly denied unemployment they deserved.
- asciident 6y agoThat's undercounted too, as they would only report the fraud they already uncovered. People outside the US are taking advantage and that money is gone: https://krebsonsecurity.com/2020/05/u-s-secret-service-massive-fraud-against-state-unemployment-insurance-programs/ https://krebsonsecurity.com/2020/05/u-s-secret-service-massi... There's also fraud from the money that's supposed to go to small businesses. My family lives in Chicago and it feels like their entire neighborhood all got $10,000 by pretending to be small businesses, and they teach each other how to do it. Everyone they know has gotten money from that and its become a meme ("did you buy that coat with your 10K check?"). My family is trying their best to resist also throwing in some applications to just get a piece of that.
- nickff 6y agoWell, this is only one error in one program. Do you think an organization that makes this kind of mistake will make only one? And if it makes more mistakes, how likely is it that the IRS will find them and reveal them?
- hinkley 6y agoI recall a story about a Congressional Oversight effort to audit for misused funds. They ended up finding something like $100k of sketchy expenditures, but the audit itself cost multiple millions of dollars. Retail tries to keep 'shrinkage' to a number that is below the threshold of detection to a point they can just built it into their cost models and not worry too much about the rest.
- jeffbee 6y agoThis story is constantly repeated in different variations on the theme. In Florida they decided to drug test people who were getting food stamps but they didn't find anybody because, surprise, poor people can't afford drugs, and they spent a fortune on the drug tests.
- triceratops 6y agoStuff like this is a feature, not a bug. It's job creation for administrators and drug test labs, and a disincentive to apply for food stamps.
- eli 6y agoI think mostly the latter. Just like how strict voter ID laws are intended to disenfranchise certain voters who don't have ready access to photo ID.
- kls 6y agoWho exactly are they intended to disenfranchise, I know the common trope is that black people are unable or unwilling to get an ID, but that in and of itself is a pretty racist implication. Any US citizen can go to their local DMV and get a state issued ID. What it does do, is restore just a small amount of confidence in the election process, something that is woefully lacking, people are so disillusioned with how far the divide in the US is, that half of them believe the Russians planted the current president via election fraud, and the other half believed that the current president's loss in the recent elections is invalid due to fraud. Lack of confidence in elections, eventually leads to revolutions, voter ID is a small token of a way to restore some of that confidence and to assume people are too poor or uneducated to get a state issued ID, is "White mans burden" under a different guise.
- dcolkitt 6y agoThe problem isn't how it was handled ex-post. The problem is how there was essentially zero infrastructure or preparation in place for this type of fast-disbursement of stimulus. Surely it couldn't haven been inconceivable to imagine that Congress may want to send widespread stimulus to most everyone with a week or two or turnaround. The 2008 financial crisis was barely more than a decade ago. How hard could it possibly be, in 2020, to setup a secure, cross-verified, system for taxpayers to update their information online? Defending the incompetence of the Treasury Department, is like defending a cook who burns down the kitchen because he never inspected his fire extinguishers. "What did you expect the guy to do? He had to move fast!"
- Jtsummers 6y agoWhether Congress could want to do something or not is irrelevant to the civil servant. Unless they're directed to make those preparations (and not just plans for the event, but actually start implementing which costs a lot more), they won't. The distinction I'm making: A plan may take 1-4 weeks to form with 1-10 participants. They could tell you exactly what's needed in order to implement a stimulus check program like this safely and accurately. But the implementation is going to take weeks or months more work and 10-1000 participants to effect it. The planning is "cheap" and done as a matter of course. That covers things like disaster recover and conops. But it doesn't, on its own, actually create a final "product". Only the plan for what to do when an emergency or directive comes down the pipe. The implementation is expensive. And they need authority to execute it. If they're not funded for it, they aren't going to do it.
- ericmay 6y ago> How hard could it possibly be, in 2020, to setup a secure, cross-verified, system for taxpayers to update their information online? Pretty difficult. People don't want to update, don't have access to computers, some are here living and working and aren't citizens or are undocumented, some people don't trust the government or don't want the government tracking them anymore than they already do. You name it. Even if you didn't have these systematic issues, it's a political football. Can't ask the wrong questions on the census b/c politics, for example. How would you even know that every American eligible got a check if you can't even get a count of every American?
- snarf21 6y agoExactly and we needed this to be $600 monthly. It also sucks that a lot of individually owned small business weren't eligible for this stimulus.
- SubiculumCode 6y agoI came to make the same point. Speed was more important than accuracy. These types of articles are just cheap shots that make the program look bad, when in fact it was an unmitigated success.
- MisterBastahrd 6y agoThere is, and it's because there is a segment of the population that has been indoctrinated to believe that the government provides no useful function other than criminal prosecution and military services. Any waste or small errors (in the larger scheme) are an alarming cause for concern in their minds and proof that government is dysfunctional by default.
- slg 6y agoAnd this is the argument for the U in UBI. You make government services as universal and as easy to acquire as possible. You get more widescale buy-in from the general population because everyone benefits rather than a select group which seems to be a problem with the current discussions around college loan forgiveness. Plus there are all sorts of cost savings that come from reduced bureaucracy that hopefully outweigh the costs from outright fraud or normal mistakes like this. All the scrutiny and bureaucracy should be on the tax collection side rather than on the service side.
- jboy55 6y agoAs with anything with government and helpful programs, a large part of the US thinks, 'It doesn't matter that millions are helped, that a handful was able to take advantage means we should get rid of it'
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