For most, the proposed $1,000 check from the government won't even pay one month's rent...

Surprised there is anything at all

reality is during a Draconian event such as a lockdown all taxes, all rent, all revolving debt should be frozen and illegal to collect.

needs to start at the top though and would result in a lot of boo who and arm flailing

 

That's true, but it's not really the point.

HK has done this recently (HK$10,000 - about US$1,300) because of the recession caused by Covid 19 and the riots. HK did it before, in 1998, during the Asian Financial Crisis. I lived there at the time, and was delighted to get it.

The point of it is not to help individuals during a difficult time: that's just a nice side-effect. The point of it is that if they spend the money, it will start circulating through the economy; there'll be a multiplier effect; and it will boost the economy. The government gives me $1,000. I spend $1,000 on delicious chocolate. That money goes to the chocolatier, and pays people's wages. The chocolatier makes $800 in profit on that chocolate. The chocolatier then spends her $800 on a bike that she wouldn't have bought otherwise: the bike shop lady gets $400 and the bike manufacturer gets $400. They each use their money to buy some cocaine from me, so I get $800. I spend that on more chocolate. And so on.

Other moves - things like tax cuts - benefit the rich more than the poor, because of course cutting the tax rate by 5% gives someone on $1,000,000 a year an extra $50,000, but only gives someone on $20,000 a year an extra $1,000. Doing this is stupid when you're trying to restart an economy, because rich people don't need the money. Giving a flat amount to everyone works better, because poor people get the money, and they need it.

I'm not talking about the moral issues here: I'm talking about the practical effect. Give me $10,000, and a lot of it will go into my savings account. Give my poor friend $1,000, and she'll spend it all because it means she can buy things she wants but can't normally afford. My money going into my savings account does not benefit the economy. Hers, being spent on stuff that she would not otherwise have bought, hits that multiplier effect explained above and helps kick-start the economy.

So a flat-rate $1,000-per-person gift isn't intended to directly help people who are struggling financially. It's intended to boost the economy. It doesn't matter that it's not enough to cover a month's rent. What matters is that it's $1,000 that they don't otherwise have and that, as it's a windfall, they'll spend a significant portion of it. The government is not doing this to be nice, or to help individuals: it's trying to boost the economy as a whole.

Of course, it doesn't always work. I spent my 1998 HK windfall on a holiday in Vietnam, so I boosted the Vietnamese economy rather than the HK economy. Ah, well.

 

I agree with you up there. Give the cash to those most affected.... But we all know who'll get the majority of it.

I swear to god if it comes down to it and General Motors gets another bailout I'll lose it.

 

"Heard you got your $500 check, we'd be happy to cash it for you so you can get what you need"

"Naw, it says $1000."

"Yeah but the check cashing fee just went up"

 

Pends on the town.
In many parts of this country if you’re paying $1,000 for rent, you’re NOT poor....
I bought my last house for less than $200k, and my note is less than $1,000.

Be that as it may...@hkmb is right.
This is is intended to “help the poor” NOT by giving them a month’s rent but rather by defibrillating the economy.

A rising tide.....

 

I will be watching the "what did you do to your Prius today" thread

 

I agree. @hkmb seems to have a good understanding of it. Capitalism done with integrity is about as powerful as compound interest.

As for the title --- that $1,000 will come within just a few bucks of making three mortgage payments for me if I decide to use it that way.

 

People are conflating a $1,000 a person rumor originally raised by Sen. Mitt Romney with whatever Coronavirus bill that's going to blow through the Senate today:: https://appropriations.house.gov/sites/democrats.appropriations.house.gov/files/Families%20First%20summary.pdf
ALL of which is different from the "bucks in your back pocket" bill that's still NOT A BILL yet but just a bunch of sound bytes on the interwebs.

The GOOD news is that more and more folks are sitting at home now....and certain dot.gov "Performance Reviews" will be signed by their employers in early November.
Congress Critters KNOW that.

Stay tuned......

 

It occurs to me that there are many people in the country that are affected zero amount in their daily spending. (Not talking IRAs, 401k, investments). People like me who get a pension and social security and who is married to someone who does too.

I'm thinking that funding states to provide immediate unemployment insurance would be a way to avoid giving people like me money. Bring a letter from your employer and get your first check now kind of thing.

 

$1000 per person is a good start, but no where near enough to stop a serious recession (or depression). A response adequate to the size of the damage being done would be measured in the trillions.

Here's an example of one such proposal:
This Is the Only Way to End the Coronavirus Financial Panic - The New York Times

 

With some restrictions like no stock buy-backs for the period of the loan. And an executive compensation cap of 10 times the average worker's salary.

And support for the PBGC so older retired folks pensions aren't wiped out. It isn't just the workers. With a pension fund's investments not meeting expectations, I can see major hardships for many of the most vulnerable.

 

i don't need the money. there has to be a better way. if i get it, i'll donate it.

 

There probably is a better way, but it would take 40 years to hammer out all the dirty details. We can't have nice things.

Besides, it's only a small fraction of what they already burned down trying to shore up the stock market.

 

million, billion, trillion,\....\ wait...what comes after trillion?

 

A trillion and one.

 

Socialism

 

Post 3 sums it up....it is to spur the economy.

FWIW
For New York, Calif, high tax and cost of living states, this rebate really won't make a difference.
Additionally, based on the area of the county, the income limitations I heard about to receive this fed pay out exclude much of the middle class....but I haven't read the legislation.
If I got $1000 it would just go to utilities, taxes and, now, the home schooling costs.

For many (IMO) a deletion of a property tax payment might work better, but that is state/ county rebate not federal.

Government will always "get theirs" same as a loan/mortgage.
Sure, defer loan/ tax for three months, but that just extends the pay off date, and interest more than likely with a bank note, would be accrued during the deferral period and added to the principal amount due.
Tax elimination is the answer for USA to try to make people whole.
Noting the excess amount of government employees, bureaucracy and benefits/ perks, if reduced, may increase unemployment.

Restaurants and bars are "big time" effected with the Stay at Home orders because of Covid.
Loss of income for x period of time will never be re-cooped.
The middle class, the engine of the USA economy.

I'd propose the UN (United Nations) should sue China, which may be the only way to make everyone whole.
How much? Trillions and Trillions of dollars....then how to collect and disperse?
Wuhan China - "f*cked *p" the entire world economy, that's the source issue.

Rant over.
Thanks for reading I hope you enjoyed my rant.

 

ah but that’s only what all the sensible countries do,

I still believe during a crisis, interest, payments, rent, taxes (sales and property) mortgage, revolving debt should be on hold

 

Oh.
TRUST ME......

The ChiComms are "probably" going to suffer some blow-back for their early actions on this.

We're in the very beginnings of what is likely to be a fairly robust economic down-turn and perhaps a couple of months of telling the young-uns that they cannot have the destination weddings....proms....summer vacas...etc that they all considered to be their birthright.

Like I said in another post....we've been posting about this since JANUARY.
Right now, people are alternately scared, inconvenienced by child-care and layoffs, in denial about the seriousness of this bug.....and some are getting to be kinda tired of hearing about it all.

In a few more months?
When the markets finish un-spooling and the effects of all of this start propagating throughout the world economy.....

They're gonna get MAD.