Good point NYTs

But David, that’s politics, spread the wealth among as many voters as possible.

David Leonhardt , the New York Times
Of course, millions of other Americans are struggling mightily. Nine million fewer people are employed than a year ago. Others are coping with big medical bills. Many small businesses have closed or may soon. State and local governments are planning deep cuts.

The $900 billion stimulus bill that Congress passed last night will provide a lot of help to the economy. But many economists believe that it also has major flaws. Among them: It isn’t especially targeted at the parts of the economy that need help.

A central part of the stimulus are one-time checks that the government will mail to people. Any household with income below $150,000 will likely receive at least $1,200. Families with children will receive more.
Much of that money will go to Americans who are doing just fine and who will save the money they receive, which in turn will do nothing to keep struggling businesses afloat or keep workers employed. Already, the personal savings ratehad risen to about 14 percent this fall, from 8 percent at the start of the year.
At the same time, the bill provides only 11 weeks of expanded unemployment insurance. “That’s not enough to bridge us to when a vaccine is widely distributed,” Ernie Tedeschi, a former Treasury Department economist, wrote yesterday. In all, the bill spends less on the expanded jobless benefits than on the stimulus checks.

6 comments

  1. Missed the most important point David makes. He moans about the fact that the $600 direct payments cost more than the extension of incentives to remain unemployed.

    Gang, there is a reason why unemployment is designed to provide a bare subsistence level – it is to serve as an incentive to obtain gainful employment.

    As all the data show, we need to protect the elderly and those with significant medical conditions, and get everyone else back to work. An additional dollop of money on top of unemployment benefits simply reduces the financial incentive to return to work for those whose new benefit exceeds the take home pay they would have received from employment.

    Because, in pandemic-world, many states don’t require individuals to seek work, we have seen unemployment drop, in large part because labor force participation has substantially declined.

    I have a copy of the bill if anyone wants to do something none of the idiots who voted in favor of the bill have accomplished – none have read it. For all they know, it could confirm a sense of the Senate and the House that Nancy Pelosi, Chuck Schumer, Donald Trump, Mitch McConnell and Kevin McCarthy are all idiots.

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    1. Jack – I get it about the unemployment, thing. But, these are not normal times. If your skill set is in the hospitality / food service industries, or related businesses that support the same, there may not be any jobs in your area. So, for now I am for increased unemployment benefits. It is these Crazy Covid shutdowns, that are doing the most damage to our economy, and there is no proof that they help stop the spread, anyway. I know workers that their employer has been shut down, for the third time now, CRAZY! As, I have said before, I do not need any stimulus money, buy I will take it and hold it in reserve, for the coming inflation, that all this extra money is sure to cause, in the long run.

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  2. This is just crazy! But, what is another Trillion Dollars of debt going to do in 2021, almost nothing. But, the interest payments at just 2%, will be another $20 Billion per year, forever. The money is not going to the right places in the economy. Many people I know, do not need the money, and I am talking about people with incomes between $10,000 and $40,000. They are retired, or if working, have not lost their job. My 90 year old mother, who lives with my older sister, still has money left from the first stimulus. If, a one time payment of $1,200 or $600 is going to make a big difference to your monthly budget, you are doing something wrong.

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  3. Looks like the 1200 is turning into $600, that hardly pays a monthly mortgage for most plus taxes are all due at the beginning of January I think it is a ridiculous low amount to afford the American people

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