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.