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Post by mikegarrison on Jul 2, 2020 13:28:51 GMT -5
If people are worried about rich people getting checks, you can just get it back in taxes next year. If rich people paid taxes that were in proportion to the benefits they receive from society and government, we would not have any problem funding something like this.
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Post by mervinswerved on Jul 2, 2020 13:43:51 GMT -5
If people are worried about rich people getting checks, you can just get it back in taxes next year. If rich people paid taxes that were in proportion to the benefits they receive from society and government, we would not have any problem funding something like this. This is true.
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Post by joetrinsey on Jul 2, 2020 13:56:40 GMT -5
trojansc I think it's an interesting topic and a good one. I have some thoughts, but I'll preface them by saying that Macroeconomics seems like one of the trickiest topics and there's so much debate even among the experts in the field. Even with the emphasis on experimental economics, there's so much debate about cause-and-effect of monetary policy and fiscal policy and the tools that governments have in both areas. And both are so tied to politics that I'm skeptical of simple, blanket declarations. And I'm also probably missing huge pieces of information needed to comment properly on these topics. That said... 1. I think inflation is the big danger here. Specifically: inflation without economic growth. In the Reagan era we called it Stagflation, today economists like Pippa Malmgren would call it Biflation, and while the effects aren't exactly the same, the worry is that, "what we want," stays cheap, while, "what we need," increases in price. CPI is widely cited as the measure for inflation, but some scholars have raised serious issues with the CPI and feel that it under-estimates inflation. Case in point: cost increases of housing, college tuition, medical costs have far outstripped CPI. 2. Money doesn't come from nowhere and the printing of money (either directly through monetary supply or, as in this case, via stimulus spending) does have consequences. See: steady upward pressure on housing prices due to (among other factors) government subsidization (direct or indirect) of homeownership. See skyrocketing tuition prices because of all the various policies around colleges. 3. Related to my last point, I'm sympathetic to the argument of, "well the government has been pumping money into corporate coffers for so long, the regular people need to get some." I feel the same way. 4. As a general rule, I'm not a fan of means-testing or targeted subsidies. I think unemployment, as an overall concept, is a dumb one. I think we should have a baseline safety net that everybody has access to at all times, no questions asked. As you mentioned, states are already having enough trouble distributing this money. It's only going to get worse. So, in theory, I tend to think the PUA program is not wise, and any stimulus spending should just be direct stimulus checks to everyone. 5. I'm sure it's possible that the, "people are making more on unemployment..." narrative is overplayed. I have no doubt that Republican politicians are plenty happy to pounce on the "lazy welfare class." With a steadily increasing share of their voters on unemployment (or outright welfare), I expect to see some creative wording that strongly differentiates the good hard-working Americans who have been hit on tough times through no fault of their own... and "people on welfare." That said, I wouldn't be so quick to dismiss it. There is a huge disincentive to go back to work. Yeah, in theory if somebody turns down a job, they can be reported and lose their benefits. How much of that do you think is going on right now? How much of that do you WANT going on right now? I don't want a world where one word from Big Corp X means Marisol loses her job. And if I'm hiring and I have a candidate who walks into my office and says, "I have to be honest, I'm scared and I really don't want to go back to work right now, but I have to be in this interview or else I lose my benefits," what am I going to do, hire that person out of spite? 6. And I get it, it feels cruel to, "force people to go back to work." I don't want to force people to go back to work either. But, money doesn't come from nowhere, and money is a proxy for economic activity. By definition, a certain portion of the country needs to be working to support those that aren't. Or, we can print money which.. 7. We are in such unprecedented waters in terms of deficit spending. And not just deficit spending, but the way that the spending is taking place. This isn't FDR creating the PWA and building infrastructure that (initially at least...) could be counted as an asset. We're talking massive increase (directly or indirectly) in the money supply without economic growth. That's the textbook recipe for a loss of middle and lower-class buying power. Print a 10% increase in money supply, hand it to every American, and everybody stays in the same place, but with rents and Wells Fargo stock 10% higher. 8. And I get it, we're going to do MMT. Stephanie Kelton is hot right now, and we're going to undergo a new revolution in how we think about government finance. And who am I to criticize her? All I can offer is, "other economists disagree." And that there's so many examples of world powers thinking they had a monopoly on their currency and whoops... they didn't. The dollar is the world's reserve currency. For now. We're in for a world of economic hurt if we lose that. I don't have any faith in our federal government to maintain the tricky balance of printing and taxation that Kelton requires. To me, it just smacks of, "well... the theories are correct, it's the politicians who didn't implement it correctly." 9. So I guess, at the end of this, I would favor stimulus packages that are not means-tested rather then tying it to employment or anything else. I'd favor some restraint in doing so. And I'd be against any sort of business bailout packages so the majority of money is placed directly in the hands of individuals rather than targeted packages which I expect to be well-intentioned but ultimately corrupted by lobbying interests.
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bluepenquin
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Post by bluepenquin on Jul 2, 2020 14:11:51 GMT -5
I vote other. $2000 a month to every adult and child in America, regardless of employment status or income, until the pandemic is over and businesses can reopen without restrictions. If people are worried about rich people getting checks, you can just get it back in taxes next year. Curious on the $2K number. Why not $10K or $1M? And until businesses can reopen w/o restrictions - how does this work. Everyone have their own garden and grow their own food? Break your leg - well wait a couple years until we are back in business. Heart attack - well, sorry we are closed right now. Plumbing issue in the home - DIY? Utilities - I guess no electricity.
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Post by mervinswerved on Jul 2, 2020 14:22:20 GMT -5
I vote other. $2000 a month to every adult and child in America, regardless of employment status or income, until the pandemic is over and businesses can reopen without restrictions. If people are worried about rich people getting checks, you can just get it back in taxes next year. Curious on the $2K number. Why not $10K or $1M? And until businesses can reopen w/o restrictions - how does this work. Everyone have their own garden and grow their own food? Break your leg - well wait a couple years until we are back in business. Heart attack - well, sorry we are closed right now. Plumbing issue in the home - DIY? Utilities - I guess no electricity. It's a nice round number, but I'd be willing to consider $1900 or even $2100. Obviously, essential businesses have stayed open during the most restrictive lockdowns. Not sure how you jumped from me naming a theoretical end to the emergency (businesses being able to safely operate in a pre-pandemic fashion) to "shut down all businesses and services everywhere.
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bluepenquin
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Post by bluepenquin on Jul 2, 2020 15:05:38 GMT -5
Curious on the $2K number. Why not $10K or $1M? And until businesses can reopen w/o restrictions - how does this work. Everyone have their own garden and grow their own food? Break your leg - well wait a couple years until we are back in business. Heart attack - well, sorry we are closed right now. Plumbing issue in the home - DIY? Utilities - I guess no electricity. It's a nice round number, but I'd be willing to consider $1900 or even $2100. Obviously, essential businesses have stayed open during the most restrictive lockdowns. Not sure how you jumped from me naming a theoretical end to the emergency (businesses being able to safely operate in a pre-pandemic fashion) to "shut down all businesses and services everywhere. It quickly becomes a slippery slope in determining essential business - even when looking at it from the consumer point of view. There aren't many degrees of separation before we get to something like 90% being essential when looking from a supply chain view.
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Post by mervinswerved on Jul 2, 2020 15:51:08 GMT -5
It's a nice round number, but I'd be willing to consider $1900 or even $2100. Obviously, essential businesses have stayed open during the most restrictive lockdowns. Not sure how you jumped from me naming a theoretical end to the emergency (businesses being able to safely operate in a pre-pandemic fashion) to "shut down all businesses and services everywhere. It quickly becomes a slippery slope in determining essential business - even when looking at it from the consumer point of view. There aren't many degrees of separation before we get to something like 90% being essential when looking from a supply chain view. Is it now? Setting aside that "slippery slope" is a classic logical fallacy, I think it'd be pretty simple to define essential businesses in a narrow fashion, especially if non-essential businesses don't have to clamor for exceptions because they're being compensated and supported by public money. More simple than whatever the hell we're trying right now. Certainly, no reasonable definition of essential business includes "all businesses and services everywhere" like you implied. Anyway, I think a massive infusion of cash directly to individuals and small businesses (combined with widespread rent and mortgage cancellation) would go a very long way towards mitigating the economic effects of a proper public health response.
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Post by Deleted on Jul 2, 2020 18:01:01 GMT -5
Uncle Sam is always there to save the Big Boys. But everyone else? Should have planned better. It's punitive AND it will not save the economy.
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Post by hammer on Jul 2, 2020 18:12:09 GMT -5
"Just gives me my money!"
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Post by mervinswerved on Jul 2, 2020 18:24:33 GMT -5
No thank you. I'm not interested in burdening my children and grandchildren with increased national debt and/or increased inflation. Guess you shouldn't vote for anyone in federal government then, as both parties engage in incredible deficit spending. Cancel *both* rent and mortgages. As for lenders/stockholders, they have access to other forms of lending and funding. Otherwise, tough sh!t. What about them? Just because some people paid off their mortgages during *not the global pandemic and ensuing depression* doesn't mean relief should be denied to those who have not. This is not an example of moral hazard. Federal funding is the difference between mass evictions and mass bankruptcies for millions of people. It has nothing to do with people being "fiscally responsible." It's a problem only the feds can address and they absolutely need to. [/quote]
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Post by mikegarrison on Jul 2, 2020 19:44:40 GMT -5
Guess you shouldn't vote for anyone in federal government then, as both parties engage in incredible deficit spending. I vote for the more fiscally conservative, just about every single time. So you vote Democrat? I'm a bit surprised, but whatever. I mean, you know, under Clinton the deficit dropped every year, eventually becoming a surplus. Under Bush the deficit rose until 2004, then declined but rose again and peaked in 2008. Under Obama the deficit started out huge, thanks to the economic recession he inherited, but it lowered every year. That trend immediately reversed under Trump, whose deficit spending has increased every year. It's a very clear pattern -- Republican administrations deficit spend, then Democratic administrations try to bring the deficit down, then Republican administrations deficit spend, etc.
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Post by Deleted on Jul 2, 2020 21:27:52 GMT -5
Guess you shouldn't vote for anyone in federal government then, as both parties engage in incredible deficit spending. I vote for the more fiscally conservative, just about every single time. So, who cares what happens to the market? If you find yourself in a hole, keep digging is your solution? What about those who paid off their mortgage during the pandemic so that they had no concerns about a roof over their head during the ensuing depression? Some young adult works their ass off for years, doing without movies and fancy dinners for years so pay off their student loans. Then, whoosh, everybody gets their student loans paid off by Uncle Sam. Absurd. Yes, it most certainly does. Fiscally responsible people aren't a few months away from eviction or bankruptcy. You keep contradicting yourself. How can you be fiscally responsible if you aren't even paid a living wage? It's their fault if they don't have a better job. It's their fault if they aren't educated. It's their fault if they don't have savings to pay for when they don't have a job. But, hey. What about that $600 they don't deserve, right? Do you not see how the deck is stacked against the average Joe in America? Not even the average Black Joe?
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Post by vup on Jul 2, 2020 21:36:43 GMT -5
Side note: in reference to stimulus money in general, money in the pockets of Americans would probably have a nice, little antidepressant effect. It’s reassuring to know you’re not going to lose everything over this pandemic. It really would be a relief for many. Financial security is really everything sometimes. I think it would be good for the mental health of America.
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Post by mervinswerved on Jul 3, 2020 6:11:54 GMT -5
Side note: in reference to stimulus money in general, money in the pockets of Americans would probably have a nice, little antidepressant effect. It’s reassuring to know you’re not going to lose everything over this pandemic. It really would be a relief for many. Financial security is really everything sometimes. I think it would be good for the mental health of America. There has already been some interesting research on the effects of the "Superdole" so far this year. The $1,200 stimulus check plus expanded unemployment benefits have really made a difference. Lots of people are able to actually build some savings for the first time in their lives. I was a little skeptical about UBI a few years back, but I'm starting to think it's a good idea.
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Post by joetrinsey on Jul 3, 2020 11:01:48 GMT -5
Spoken like a Keynesian. An Austrian would have a different opinion. We don't pay workers enough in this country. What happens? The Fed and state end up subsidizing the workforce -- just one more handout to holiday and his ilk. The dirty little secret of America is that we never really got rid of slave labor.
Here's the only thing I'll push back on. When you say, "we don't pay workers enough," who is "we"? As long as the problem is the big corporate boogeyman, change will never happen. Because lots of companies don't pay workers enough, but lots do. And you do have consumer buyer power to vote with your wallet.
I don't order pizza from Domino's; I get it from my local shop down the street. I don't get my hair cut at Supercuts; I walk down the street to the local barbershop. We get 80-90% of our groceries direct from local farms, although I confess I'll still be picking up mangoes and avocados and bananas from the supermarket until global warming REALLY hits Central PA. I get my oil changed by a local guy instead of at Pep Boys. I buy my daughter's toys from Etsy sellers instead of from Target.
And hey, there's some things that I'm not able to do yet. I'm not sure where I'm going to buy locally-sourced lightbulbs or paper towels or iPhone chargers. And sometimes you don't have local options.
But I think it's worth noting that so much of this was driven by the culture of Reagan-era consumerism. We decided (and I'll note it was generally a consensus from the right and the left) that consumer choice was king. If Ford can't compete with Honda, that's too bad. If Bob's General Store can't compete with Walmart, that's too bad.
And of course, you can go too far with this. Isolation isn't the answer either. But, I think it's important to note that as a buyer, you have a say in how much employees get paid.
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