The Check’s In The Mail

Mitt Romney’s proposal to send every American adult a check for $1,000 opened a discussion of ways to address the economic dislocation that will permeate the nation. Of course, if you can’t work, lose your job, have a small business that’s shuttered, will a check for $1000 do the trick?

The shift came four days after an internal report from the Department of Health and Human Services — not yet shared with the public — concluded that the “pandemic will last 18 months or longer and could include multiple waves of illness.”

To self-isolate for a couple weeks is one thing. If this goes on for 18 months, is it even conceivable? This isn’t to say it will happen, but it’s not beyond the pale. During whatever period it is, people will not only need medical care, and maybe burial, but will need to eat, among other things.

Following Mitt’s grand, others came up with grander numbers.

 A group of six senators upped the ante on Tuesday, proposing to send everyone an initial $2,000 and as much as $4,500 by the end of the year.

Give a person $1000 and she survives for one month. Give a person $2000 and she survives for two. Mind you, my proposal was to limit the cash influx to those whose 2018 tax return was  under $100,000, and to do so monthly until we reach the “all clear.” Then again, I surmised that this might go on or 3-4 months, not 18. I’m an optimist.

A cash infusion to people who can’t survive without it is, obviously, a hand-out, but it’s not without its social benefits.

People need money to pay the rent, the mortgage, the utility bills. Handing out money also would encourage consumer spending, which is the primary form of economic activity in this country. And that, in turn, would help to keep small businesses open, and workers employed.

In other words, the money would circulate through the economy and, at least to some small extent, keep the economy on life support while we live in our bunkers. But if something smells wrong about this argument, there’s a reason.

Sending people money to pay the rent isn’t giving them money, but their landlords. Paying utility bills means utility workers are still out there working, running, repairing, charging, for their services. Keeping small businesses open and workers employed means someone is patronizing these businesses, and workers are there to open the doors and make the frappucinos. And truck drivers are delivering the Italian roast that factory workers are cranking out. It’s almost as if there will be a functioning economy all about us while we’re huddling in front of the television waiting for Odenkirk’s next season of Better Call Saul.

Seeing the problem of checks being sent to people who don’t need the cash to survive, the New York Times seizes the opportunity.

One downside to blanket distribution is that some people don’t need the money. There are sensible ways of correcting for this. The government could require people to pay income taxes on the money: Those with higher incomes would pay higher rates and, as an added benefit, some of the money would flow to state and local governments, which are likely to experience sharp drops in revenue. Alternatively, the federal government could use a sliding scale: less money for those with higher incomes. But there are benefits to universal distribution, too. The government can’t anticipate who is going to lose their jobs.

A complicated scheme, but one that would require government workers to congregate in offices to oversee the complications. And then the complications build.

The government should make low-interest loans readily available to smaller businesses but with explicit requirements for maintaining employment. Denmark, for example, is offering to cover 75 percent of the payroll at troubled companies — so long as recipients maintain those jobs.

Of course, how a small business can cover the balance without any revenue is a mystery, not to mention the many other expenses businesses pay beyond wages that still accrue even if the employees at the Times and members of Congress aren’t aware of what it costs for a business to exist.

As for big business, even the ones we despise because they treated us like dirt when they were flush and squandered profits on stock buybacks rather than save for a pandemic (yes, you, airline scum), the problems are complicated.

It is incumbent upon policymakers to ensure that airline profits during the next economic expansion are distributed more equitably. Companies must be barred from shoveling federal aid out the back door in the form of executive bonuses, dividend payments or stock buybacks. Senator Elizabeth Warren has suggested, quite reasonably, that airlines or other big companies that receive government bailouts should be required to start paying a $15 minimum wage within a year after the end of the national emergency.

Warren’s “suggestions” are a workers’ wishlist that includes some reasonable conditions and some wacky, untenable ones, but why let a good crisis go to waste? This is certainly an opportunity for the government to wrangle concessions out of industry players who sucked before, but would you rather have no more baggage fees and some knee room, or a random worker on the board of directors?

We are deep into uncharted economic territory now, and its entirely unclear how long this will last, how deep the pain will be and who will be left standing when this is over. No matter what decisions are  made, they will be wrong. As usual, there is no one-size-fits-all simple solution, and we are nothing if not a nation that obsesses over the individual at the risk of the majority.

But just as there are no atheists in foxholes, there are no oppressed in a pandemic. For the time being, the primary function of government is to keep the most people possible alive and kicking, both physically and economically, and we can argue about how bad a job it did later, when we no longer have to worry about whether people will die of COVID-19 this month, starve this month, and can get back to the really important issues of what words are most traumatic to young people.

38 thoughts on “The Check’s In The Mail

  1. Rojas

    “Fella had a team of horses, had to use’em to plow an’ cultivate an’ mow, wouldn’t think a turnin’ ’em out to starve when they wasn’t workin’.
    Them’s horses – we’re men.”

  2. Buck Wheat

    If one reads the actual report, the statement concerning the 18-month length of the CoVid19 is under a section title ASSUMPTIONS. Incidentally, the article cites the report as saying “the ‘pandemic…” when it actually says “A pandemeic… ” Again, this is under a heading of ASSUMPTIONS.

          1. Pedantic Grammar Police

            When you spell ASSUMPTIONS in all caps, does that make an ASS of U and MPTIONS?

  3. grberry

    I’m smart enough to know that I’m not smart enough to know what the right thing to do is. While I don’t think much of Romney, his idea has the virtue of simplicity and being relatively feasible to implement. And we absolutely need to keep the economy of real people making, delivering, and selling real products going. Without them we die. We can live without the chattering classes. My job is not essential but can be done from home. The grocery store supply chain is essential and cannot be done from home. The utility workers and their supply chains are essential and can’t be done from home.

    For implementing Romney’s idea, if this had held off two months we could have used census returns to do the check for everyone in the country. As it is, we can use the cross-check database that the Census department has built over the past couple years to see if they have gotten a response from every address as a good enough tool to implement Romney’s idea.

    Tax returns are submitted by/for only a percentage of the population, somewhere near 2/3rds. Others don’t have enough income to have to report or are working under the table.

    And Warren’s notion of the $15 minimum wage tooth fairy is even less viable in a time of crisis than normal. Wages have to be paid by customers, not magic government wishing. One time infusions of cash are irrelevant. I’m embarrassed to admit she is one of my Senators. Better she were sent back to Harvard where she would do less (not no) damage.

    1. SHG Post author

      An simple plan has the virtue of being excutable, if potentially inadequate. A complicated plan might accommodate more of the inadequacies, but becomes impossible to implement (especially timely). Pick your poison.

      1. Fubar

        My department of simplified emergency contingency plan feasibility studies has advised me to issue the following statement, just in case.

        My plan’s simple, and I’ll guarantee
        An America both great and free:
        Sum all checks into one,
        And when you are done,
        Just sign it and send it to me!

  4. orthodoc

    in light of the subject of the next post, i cannot quote the author by name, but he did nail it (in his “Speech To the Graduates” published in the NY Times in August 1979 (back when he was allowed to publish there)):

    “More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly.”

  5. Dave Landers

    I’ve heard of this Saul Goodman. He had that excellent website for his legal services.

  6. Jake

    We already have a system to identify suddenly unemployed workers and mitigate their circumstances quickly. It seems suspicious that none of our ‘leaders’ are talking about using these magic funds to increase unemployment payments to a level that is capable of sustaining the life of even one person at today’s cost of living.

    1. SHG Post author

      Really, Jake? Today is the day you pick to humblebrag that you’ve never been on unemployment and have no clue how bad the system works normally, and how much worse it will work under current conditions? You’re cruel, Jake. So very cruel.

      1. Jake

        On the contrary, I have relied on unemployment twice in the thirty years I have been working. Although both times it was efficient in terms of confirming my self-selection as unemployed, even in the ’90s, the amount was only sufficient to stem the bleeding from my meager savings while paying the rent.

        As the system enjoys the status of already being in place and, even if imperfect, widely accepted, it seems obvious that the correct use of funds available is to increase the payout both in terms of monthly amount and the maximum duration an individual can stay on the roll.

          1. Jake

            How much personal experience do you have with applying for and accepting unemployment insurance, sir? I am assuming you know it has not been necessary to stand in line at a physical office for 20 years.

            1. SHG Post author

              Lawyers experience things through their clients, Jake. It’s the nature of what we do. Unlike the individual with his singular experience, we do it thousands of time, even though not on our own behalf.

            2. Jake

              What’s the minimum amount I could give you to become your client? I want to bask in the sunlight of you, assuming the very best interpretation of how I relay my experiences to you, for just one day.

      2. Pedantic Grammar Police

        As a techie contractor I use unemployment frequently, and it seems fine to me. I fill out an online form, and my debit card magically gets money on it every 2 weeks. It is kind of a miserable pittance, but I keep my expenses low, and I get by. As someone who is collecting unemployment right now, I’d be ecstatic if they increased it. Maybe it’s better in CA than NY? I didn’t collect it there because I had already used it up before I moved.

        1. SHG Post author

          Here’s the problem, PGP. No one, save Jake, is even considering this, and just because Jake brought it up does not mean we suddenly engage in a state by state discussion of its efficacy because it’s not even in the running, anywhere, by anyone, anywhere, ever. Yet, here you are, somebody tossing an insanely pointless bone down a rabbit hole, and you’re chasing it. Don’t chase it, PGP. For the sake of brain cells everywhere, don’t do it.

          1. Pedantic Grammar Police

            If you help Jake dig a rabbit hole 4 levels deep, it’s inevitable that people will start falling in. I’m just an innocent victim here, crying out for help from the bottom of the rabbit hole. Does anyone have a rope?

          2. Jake

            It would have taken 3 seconds on Google to learn that your statement is factually incorrect. Not only has a nationally recognized, experienced expert on the subject suggested it publicly on Forbes in the last 48 hours, but multiple states also have plans in motion to expand coverage to those impacted by this crisis.

            Use the money I’ve sent you on a donut and give me the benefit of the doubt just once. Please? Pretty please?

        2. rojas

          Along with a host of other measures “DIVISION D—EMERGENCY UNEMPLOYMENT INSURANCE STABILIZATION AND ACCESS ACT OF 2020” has passed in the Senate.
          I expect Trump will sign it post haste.

          There are a lot of independent contractors that do not have access to unemployment insurance. I’ve seen the number estimated at around 10% of the workforce.

    2. Miles

      Even in the annals of Jakedom, this is remarkably dumb. To add insult to injury, consider how the closed govt office is going to verify employment and discharge when the business of closed or bankrupt, and then get that check out 8-12 weeks later.

  7. John Barleycorn

    You Twit-ed out a proposal?

    Just checking in on that and all…

    This will not be a SJ Tab feature in the future.

    P.S. Yes you are an “idiot” but nice to see you floating around and having a bit of “fun”.
    Traveling minstrel show is where it is going to be at, as predicted, after all the proposals are long forgotten.

    P.S.S. What is it with proposals anyway? Could be a good post? Right up your alley, but I fear the Twits may have blended your cynicism into the neve-after?

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