I was in San Francisco this morning, and watched some local tv programs. The overall subtext was that the Bay Area Council folks are losing their minds. Rents continue to plummet, major corporate tenants continue to pull up stakes, large swaths of downtown look like some post Purge dystopian nightmare, and there is no end in sight.
A lot of economic studies have shown that infrastructure spending is actually a good investment of public funds from an economic multiplier standpoint.
As a landlord I'm going to disagree on rent control as I have been on the receiving end. It tends to be a one way trip politically and is a death spiral for a rental market IMO. That would take several beers to explain coherently. Covid rental assistance is where most municipalities are ending up, acknowledging that reduced or "canceled" rent doesn't stop mortgage, utility or vendor bills. Interestingly, apartments rents in some large cities, notably San Francisco and Seattle have dropped significantly since early 2020. 24% in the case of San Francisco. However, suburban rents have increased somewhat so this appears to be a lifestyle shift.
I think part of the problem with helicopter money right now is that there is nothing to spend it on.
I would be fine with using UI to distribute funds.
Worked before...
Like TBR said.... put the money in roads, bridges and housing.
They can start with the Milwaukee and Chicago dilapidated houses and streets.
Kills two birds with one stone. Puts the ppl to work temporarily and repairs the city/nation.
Rent control for the next 2 yrs wouldn't hurt earlier.
You're giving band-aids to gun shot victims. This is financial trauma. They need jobs.
Most ppl that made $80-120k are not going to find a replacement job in their area. They will probably have to
move to accept or even just search for those types of jobs.
Now, this same group wont have much trouble finding jobs that pay half of what they used to make.
But, their mortgage and car notes and utilities are not going to magically be reduced by 50%.
People will have to learn to adapt. Go into sales or labor? Create your own business. Go back to school, tech training or something.
White collars will turn blue, and some blue collars might turn white. I can see a lot of ppl joining the military at older ages. And who knows, maybe the military could start riffing and trimming the fat and forcing earlier retirements and separations.
Lives are gonna change in 2021-2022. Dream homes and toy cars and boats will be sold or repo'd.
There's gonna be less expendable cash floating around.
People will get divorced. "No money, no honey."
So rather than being just a naysayer...here's an idea:
Why not give the extra $1,400 to anyone who was unemployed as of December 31st? These folks are probably in a hole at this point and it could help them. Also it doesn't encourage anyone on the fence to choose to file for UI in future to take advantage.
I'm also not averse to helicopter money, when warranted. I just think, and this is the core of what is wrong with with that proposal at this time is that, aside from being a shocking and significant waste of money, it is the most brute force and blind ignorance approach possible and will have the downside of increasing wealth disparity, as is typical of our use of Keynesian economics in this country.
My fundamental point is not to ignore the large numbers of people in this country (tens of millions of them) that are in desperate need of help- we should absolutely help them- the problem is not to do so in a way that is so in a way that is a) transparently political, b) insanely irresponsible and, c) likely to have a more lasting impact on wealth disparity than on Covid relief.
So what I see you saying is that this is not an issue of mechanics, but of will.
I am not necessarily advocating an abdication of Keynesian economics. But maybe a rethinking and tweaking is in order...
@8-Inch
I think the fact that the US possesses the world's only reserve currency is at the fundamental heart of why we can get away with this bullshit (profligate, debt fueled spending) to the extent we already have. My argument is that, at some point, the world will be forced to acknowledge that Americans are, probably, deadbeats.
@TBR
One notable difference with Japan is that they have been willing, for decades, to push bond interest rates below zero. Much of the world went this route after the financial crisis. We have seen, twice since 2008, that the Fed, prompted no doubt by the American financial services industry, is unwilling to follow suit. Our answer to this stimulus issue has been for the government to buy bonds. Even, lately, junk bonds. This is driving one of the other debt bubbles you didn't mention. Namely corporate bond debt.
I am not a big fan of more helicopter money in the abstract, but I think the concern over stagflation or other dire economic questions is questionable.
Japan has had debt over 100% of GDP for two decades and while their economic growth is sub 1% in the recent path, they seem to be handling inflation (also sub 1% just fine.
Economics is not my area of expertise (nor do I desire it to be), but it seems that the Keynesian economics we have been devoted to for the past almost a century is more resilient than first thought.
If I were king of the world, I would rather see the money going to infrastructure and education.
But a case can also be made for some more targeted stimulus (or survival, and the Dems have taken to calling them). Lower income people spent the money as you would expect, on food, utilities, and rent. for higher income individuals, theirs went more to saving or debt repayment. We are facing at least two debt bubbles, student loans and auto financing. so I don't necessarily see it as a bad thing here, either.
On balance, I don't see a compelling economic case for not sending out the payments. And my social worker/welfare advocate/former poor person persona says "Hey, let these people have a little bit of extra money for them to buy a steak dinner occasionally."
I'll leave it there, as this post is already too long for a swingers site...
In layman's terms.....
Those motherfuckers ain't getting their money. What are they gonna do, invade or bomb America?
We can't print that much money without causing our dollar to crash.
Only a couple of counties in the entire world would like to see the U.S. Dollar turn to paper. And deep down inside, they really don't....
They're just numbers until interest rates go up. Then the cost of servicing all that debt starts to eat up more and more of the budget. Several things could make this particularly acute. One would be a period of "stag-flation" (inflation coupled with recession) as we saw in the 70's which would create the need to borrow more money for safety net programs at a time when excessive borrowing demands premium bond yield to sell the debt. Another would be a downgrading of the US bond rating as already happened with one rating company, though arguably as a threat to the US government not to punish them for their complicity in the mortgage crisis. Such a downgrade may eventually be inevitable if the US abandons any pretense of ever paying back it's debt (I personally do not believe we have any intention of doing so). The last driver of a potential death spiral is the aging of the baby boom generation (and its corresponding demand on the Medicare and social security systems), coupled with an acceleration of our already negative birth rates and continuing racist anti-immigration sentiment (immigration being the only realistic answer to the problem of negative birth rates).
I suspect that within the next ten years we will start to hear fringe politicians, and possibly more mainstream "populist" politicians openly talking about the previously unthinkable: default on our sovereign debt. That would be the beginning of the end of the American way of life as we have known it IMO.
At this point, it seems the debt and deficit will just be numbers...
Don't think any country will ever fully recoup what the US owes them
As to your question as to whether it will happen, I think that depends on whether Senate Democrats exercise the nuclear option of suspending the filibuster. The Georgia special election fundamentally changed that calculus. I fully expect, now that the Republicans are completely out of power, that they will suddenly remember that they would have people believe they actually give a fuck about deficits. I'm happy to have debt and deficit spending as part of the national conversation again even if it's purely cynical politically motivated bullshit.
Debt matters.
Interesting topic. I'm in the camp who thinks this ($2,000 checks) is an asinine idea. On every level
First, the idea that spending and debt don't matter is both dangerously widespread and can only be even ignored while interest rates (and hence the cost of debt service) are historically low. What is keeping interest rates low, now for decades, is another interesting topic.
Second, the amount of debt, considering how seriously this idea has been taken is staggering. The "extra $1,400" in question totals $464 billion. As I pointed out elsewhere this is over 60% of the entire cost of the just passed (by Veto override) defense appropriations act. The level of economic finesse in directing this money to families up to the 82nd percentile of income is not so much akin to driving a tack with a sledgehammer as it is to driving a tack with a hydrogen bomb.
Third even if you believe this type of "helicopter money" stimulus is warranted (I do not , at this precise time but am open to re-consider after Q4 2020 economic data is in), any economist can tell you that such money is better directed to lower income brackets assuming the goal is to see it spent into the economy immediately. While some people (quite a few from the self reporting in this thread) don't need the money but might spend it on hickory flooring anyway (great choice of wood BTW) many will put it in their E Trade accounts. Can we all agree that the stock market at least is in no need of stimulus?
That last point brings up my final issue, and the most important I think. Tis is an unprecedented economic situation and requires unprecedented economic responses. While there is real and dire distress in some sectors of the economy (restaurants, hospitality, theaters, air and cruise lines), other sectors are absolutely booming (logistics, on line business, grocery stores). The disparity cuts across income brackets as well. Many workers are not only getting repeated stimulus checks but are drowning in overtime. Others are working normal workloads and receiving normal paychecks working at home. Many of these people are also professionals benefiting from the runup in the value of their 401ks. Aiding such people will only serve to increase, not decrease, wealth inequality.
This situation requires targeted aid (continued unemployment insurance, food assistance, direct aid to specific industries) not helicopter money.
Lots of people that invaded the Capitol building are going to be unemployed when they return home.
People are being ID'd and embarrassments to their companies.
This ain't the time to be outta work. They might still qualify for those $600 checks if they hurry.
while it is true that some people are receiving checks that they don't really need, some will spend them at businesses that do need help
Nah, they're letting politics run amok like NutCal did for years. I'd bet we'd see gangbang porn starring Mike Pence before we see them say/do anything about politics outside the Politics forum.
I gave the last stimulus $1,200 to a religious senior citizen charity. Watching the mail for more.
Plenty of blame to go around...
Any other comment would get this moved to politics...
on January 3rd I found $600.00 had been deposited in my checking account. Of course I personally don't need this money, I'm sure a lot of other people do. Those of us whose incomes have not been affected should not be receiving this money. It should be going to those who need it and small businesses that have been affected. Just printing money and distributing it to everyone without regard to need is only going to create an inflationary cycle, and increase the national debt, which we will all have to pay back. Congress controls the purse, not the president. The politics it's been playing with the pandemic this year is abysmal, they should be ashamed, but of course they aren't. They believe we are all sheep that can be seduced by promises of money and "free things". Evidently they are correct since we seem to keep electing these ineffective legislators year after year. Hopefully the pandemic will be gotten under control, and things can be gotten back to some normality. Let us all hope for better days.
On the money tip, I wish I made enough to not qualify for the stimulus.
But I don't, and so I did.
Granted, it's not mortgage, grocery or diaper money, it is a small bit of relief to my budget.
My nephew and I just dragged my first check from the driveway to the basement in the form of a 290 lb Sole F65 treadmill. He thought that paying $70 for a guy to put it together was too much. When my nephew is nearing 50 and/or retired and outta shape, he'll understand better.
"I am curious as to why, given 10 months to come up with a better plan, our government didn’t have more of a New Deal-ish program in place. "
I believe, in the president's heart of hearts, he didn't see a re-election truly happening and was selling wolf tickets.
His staff was not built to handle a crisis like this. Remember all of the groups and programs that he disbanded?
So, he was gonna pass the buck and kick the can to the next president. That's one possibility.
On the outside chance of getting re-elected, he was gonna have to face Covid-19 and the economy head-on.
Playing stupid for the 1st year of the pandemic and sliding out the door was one thing. But, he couldn't avoid the elephant in the room for another term.
But, that was then, and here we are now.....
Looking to brighter days and crisis staff working diligently to lowering the number of cases and deaths and turning the economy around!!!
Won’t see it, don’t need it and I even still have my $500 emergency savings.
~Allen
With the first check, I spent 100% of it buying a used motorcycle. The second check will likely have a lot/all going towards purchases as well.
We did not need the money, but like others, I'm not going to refuse it. I could have otherwise bought the things I spent it on, or will spend it on, but I'm fortunate to not have missed any work as a result of the pandemic. In fact, I have actually made more money when you factor in I'm not commuting back/forth to work, so I have lower car insurance, wear/tear, gas, and maintenance in general.
I work in Mass but live in NH, so work from home days are technically Mass state tax free days. Mass is trying to disallow apprortioning days due to Covid, but I heard NH is taking them to court on it. Will be interesting, but if I get to apportion all of my work from home days, it will be like $5K or more I'll be getting back in Mass income tax returns. Will find out soon enough I suppose.
