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> Examples I witnessed are friends who never lost their job got like an extra $8k (couple working with two kids). So they bought stuff with it. And what's wron

> Examples I witnessed are friends who never lost their job got like an extra $8k (couple working with two kids). So they bought stuff with it. And what's wrong with that? Aren't we talking about an economic stimulus program? What do you think is the whole point of an economic stimulus program, other than stimulating the economy?

prepend 4y ago
What’s wrong with it is a few things: 1) there could have been more money for people who actually needed it and were negatively impacted by losing their job or getting sick or whatnot 2) buying lots of “luxury” items drove up inflation. This is bad for a whole slew of reasons we are seeing now. If we wanted to stimulate the economy, we could have done it in more effective ways that didn’t hose us.
- wonderwonder 4y ago
  The economy was tanking, how long would it have taken to filter the deserving people? How many thousands of people would have fallen through the cracks? How much money would have gone to laid off white collar people while 'essential workers' still had to go into work and earn minimum wage in the middle of a pandemic? This is politics, can you imagine the outrage if such an already polarizing figure decided to pick and choose who got the funds and who deserved more? I am very much not a fan of the Trump administration but in this situation I think they played a bad hand pretty well.
  - prepend 4y ago
    First, I’m not a professional economic policy person so I assume they will have much better ideas. But we could have put rules in place that were enforced retroactively. Something like “you get $600 if you lost your job. Everyone who asks gets it. But when you file your taxes if you didn’t lose your job and you took the money, you have to pay it back.” Stuff like that. I worked for a consulting company that had a pretty smart expense approval process. They approved everything and audited you severely when you went up for partner. It wasn’t perfect, but it was pretty close as people were really nervous and conservative even though they wouldn’t be audited until years later. There was also a lot of stuff where unemployment paid more than working so there were perverse incentives to not work and make more money. I had a family member who normally made about$2k/month. He got $600/week in unemployment so took a long time to go back while making an extra $500 per month. Stupidly, he bought a car with the extra money (but he’s been able to keep making the payments). Just having some cap that paid 80% of your salary in unemployment would have been super simple to implement. Or some programs ran for over a year. So the emergency stuff could have phased out after 3 months or 6 months. There’s lots of ways they could have designed interventions much better.
    - jrumbut 4y ago
      > There was also a lot of stuff where unemployment paid more than working so there were perverse incentives to not work and make more money. I had a family member who normally made about$2k/month. He got $600/week in unemployment so took a long time to go back while making an extra $500 per month. Stupidly, he bought a car with the extra money (but he’s been able to keep making the payments). On an instinctive level I prefer hearing a story like this to the kind of story that would have been more common/worse without the very broad aid that was given, but perhaps this sort of event is quite damaging as well. I'm not sure it's possible, but it would be interesting to see attempts at quantifying the difference. > Just having some cap that paid 80% of your salary in unemployment would have been super simple to implement. There is nothing super simple about government unemployment insurance programs, especially in recent years. What about Uber drivers, per diem nurses, people whose employer was dependent on events in Wuhan so their pay was cut? Even if there are easy answers to these questions, UI is administered by the states so there are going to be more than 50 versions of each answer.
    - seba_dos1 4y ago
      > It wasn’t perfect, but it was pretty close as people were really nervous and conservative How is that close to perfect? I assure you that some people who would need and actually deserve that payout wouldn't apply for it just out of the irrational fear that it will cause them problems later.
- gowld 4y ago
  > buying lots of “luxury” items drove up inflation How so? buying stuff cures inflation. Are you referring to supply chain shortages making non-luxury stuff not get produced?
  - prepend 4y ago
    Buying stuff drives prices up and contributes to inflation, not cures. There’s the same amount of stuff but more cash, so prices go up.
JackFr 4y ago
COVID relief was not an economic stimulus program. It was intended specifically to ease economic pain and displacement, not to stimulate an economy experiencing slack demand.

prepend 4y ago

What’s wrong with it is a few things: 1) there could have been more money for people who actually needed it and were negatively impacted by losing their job or getting sick or whatnot 2) buying lots of “luxury” items drove up inflation. This is bad for a whole slew of reasons we are seeing now. If we wanted to stimulate the economy, we could have done it in more effective ways that didn’t hose us.

wonderwonder 4y ago
The economy was tanking, how long would it have taken to filter the deserving people? How many thousands of people would have fallen through the cracks? How much money would have gone to laid off white collar people while 'essential workers' still had to go into work and earn minimum wage in the middle of a pandemic? This is politics, can you imagine the outrage if such an already polarizing figure decided to pick and choose who got the funds and who deserved more? I am very much not a fan of the Trump administration but in this situation I think they played a bad hand pretty well.
- prepend 4y ago
  First, I’m not a professional economic policy person so I assume they will have much better ideas. But we could have put rules in place that were enforced retroactively. Something like “you get $600 if you lost your job. Everyone who asks gets it. But when you file your taxes if you didn’t lose your job and you took the money, you have to pay it back.” Stuff like that. I worked for a consulting company that had a pretty smart expense approval process. They approved everything and audited you severely when you went up for partner. It wasn’t perfect, but it was pretty close as people were really nervous and conservative even though they wouldn’t be audited until years later. There was also a lot of stuff where unemployment paid more than working so there were perverse incentives to not work and make more money. I had a family member who normally made about$2k/month. He got $600/week in unemployment so took a long time to go back while making an extra $500 per month. Stupidly, he bought a car with the extra money (but he’s been able to keep making the payments). Just having some cap that paid 80% of your salary in unemployment would have been super simple to implement. Or some programs ran for over a year. So the emergency stuff could have phased out after 3 months or 6 months. There’s lots of ways they could have designed interventions much better.
  - jrumbut 4y ago
    > There was also a lot of stuff where unemployment paid more than working so there were perverse incentives to not work and make more money. I had a family member who normally made about$2k/month. He got $600/week in unemployment so took a long time to go back while making an extra $500 per month. Stupidly, he bought a car with the extra money (but he’s been able to keep making the payments). On an instinctive level I prefer hearing a story like this to the kind of story that would have been more common/worse without the very broad aid that was given, but perhaps this sort of event is quite damaging as well. I'm not sure it's possible, but it would be interesting to see attempts at quantifying the difference. > Just having some cap that paid 80% of your salary in unemployment would have been super simple to implement. There is nothing super simple about government unemployment insurance programs, especially in recent years. What about Uber drivers, per diem nurses, people whose employer was dependent on events in Wuhan so their pay was cut? Even if there are easy answers to these questions, UI is administered by the states so there are going to be more than 50 versions of each answer.
  - seba_dos1 4y ago
    > It wasn’t perfect, but it was pretty close as people were really nervous and conservative How is that close to perfect? I assure you that some people who would need and actually deserve that payout wouldn't apply for it just out of the irrational fear that it will cause them problems later.
gowld 4y ago
> buying lots of “luxury” items drove up inflation How so? buying stuff cures inflation. Are you referring to supply chain shortages making non-luxury stuff not get produced?
- prepend 4y ago
  Buying stuff drives prices up and contributes to inflation, not cures. There’s the same amount of stuff but more cash, so prices go up.

JackFr 4y ago

COVID relief was not an economic stimulus program. It was intended specifically to ease economic pain and displacement, not to stimulate an economy experiencing slack demand.