[SERIOUS] What do people think of direct cash payments (US stimulus package)?

[squatz1]

Even though literally every single thread on here is about the coronavirus, I felt like I would change it up a bit and talk about the economic side and the legislative responses.

One of the thing that Trump and the rest of his administration wanted to do as apart of their stimulus package was to get cash directly into the hands of Americans. We know that this is now the law of the land, and 90 percent of Americans are going to be receiving checks from the government within the next few weeks.

While we've accepted this as happening now, I don't think anyone could have ever thought that the republican party that had the teaparty revolution 2009 about fiscal conservatism, would've just left all of that behind 11 years later when Donald Trump is their President (even saying that is pretty crazy) This entire stimulus package was what, $2.5 trillion -- there's no fiscal conservatism in that at all.

What does everyone think about this happening? Will it work? Eh?


Note: This is a serious post, if you post some random sig spam bullshit I will delete. Thx

[1713860971]

1713860971

[TwitchySeal]

I've tried to wrap my head around what kind of effects it will have and I'm having a hard time.  It will get millions of people out of a really tough spot and there will be millions that receive it who don't need it or will just blow it.

I guess my strongest opinion on the whole thing is that the $75k/year cut off seems too high and the $500 per kid seems too low, that doesn't even cover a month of child care while schools are closed.  

Giving people that make $95k/year a hundred bucks also seems silly - that $100 would go a lot further to a family of 4 making a combined $55k/year.

In the end, we'll never really know whether it actually made things better or worse overall.

[Gyfts]

Direct cash payments are necessary when the federal government directs state localities to essentially shut down and place mandatory lock downs in place in order to stop the spread of coronavirus. It's more of a relief package oppose to a stimulus package. People compare this to the stimulus package in 2009 where the federal government started handing out checks for no reason but people don't see the nuance.

In 2009, the government didn't mandate that businesses close. Even though the virus is spreading, certain businesses would still be open providing service if the government didn't force shut downs therefore government intervention was part of the economic downturn thus is justified for providing relief.

I'm not necessarily oppose to some of the restrictions but  I'd argue setting arbitrarily limits at at 75k for a cut off doesn't accurately reflect people's living situation. You could live in California under a multi-person household with that salary and not make it far.

[squatz1]

Direct cash payments are necessary when the federal government directs state localities to essentially shut down and place mandatory lock downs in place in order to stop the spread of coronavirus. It's more of a relief package oppose to a stimulus package. People compare this to the stimulus package in 2009 where the federal government started handing out checks for no reason but people don't see the nuance.

In 2009, the government didn't mandate that businesses close. Even though the virus is spreading, certain businesses would still be open providing service if the government didn't force shut downs therefore government intervention was part of the economic downturn thus is justified for providing relief.

I'm not necessarily oppose to some of the restrictions but  I'd argue setting arbitrarily limits at at 75k for a cut off doesn't accurately reflect people's living situation. You could live in California under a multi-person household with that salary and not make it far.

This is a very important point to bring up, and I'm very happy that you did. When the banking crisis happened in 2008 and the Great Recession happened, businesses were still able to be in operation -- it's not like you couldn't go to the pizza place down the street to eat, or the catering hall was going under from a lack of customers. Maybe people were spending less on luxuries because many lost their jobs, but businesses weren't mandated to close -- they closed if they had to.

That's why the Trump admin and Congress is giving money out to businesses to try to prop them up through this time. I know that if you can prove there was a financial loss from the coronavirus to your business, you're able to get up to a 10,000 grant from the US government which is fully forgivable with no string attached and you can get a guaranteed loan from them with loan interest rates for the rest of your loss.

I think the issue is going to end up being in who actually gets the money, here's an example: If you're in Alabama making 75,000 is a lot different then making 75,000 in NYC. In Alabama (or any other LCOL areas for that matter) you're going to get a lot more bang for your buck, compared to HCOL areas.

[Artemis3]

The only thing i can think from this is inflation. It may appear to be helpful at first, but it will kick back everyone later.

"No such thing as a free lunch". All this "money giving" comes from where again? Certainly not from a productive economy. Print to save? Not gonna happen, print always leads to inflation, and inflation leads to everyone getting poorer. This is like a loan with too much interest at best.

This power of politicians to "print" money when they feel like it is what led to all hyperinflation cases in history.

[suchmoon]

It's a ridiculous way to handle this crisis. I can't see it as anything other than an attempt to bribe voters and I'm surprised that Democrats went along with it, since it helps mostly Trump (he wanted his signature on the checks LOL). The proper way to do it would be to boost unemployment benefits and possibly some other existing support programs for people who need help. The stimulus bill does some of that, e.g. expanding unemployment benefits to help "gig" workers, but still - giving cash to people, particularly ones who still have jobs is insane.

Also keep in mind that some states will be hit particularly hard and unlike the federal government states can't print money.

[PrimeNumber7]

The direct cash payments are actually advances on tax credits for the 2020 tax year.

I believe the intention of the cash payments is to prevent people from hoarding money unnecessarily out of fear of a poor financial future. If too many people stop buying things, inventories will start to build up, and suppliers will need to lay off workers because of the lack of demand, and these employers may not be hired back after the economy opens back up.

There are very few people working away from home currently. Many companies that are requiring employees to come into the office have announced enhanced child care benefits that are paying for 'emergency' child care.

The bill also provides unemployment benefits that are probably dangerous, and harmful to the long term economy. In general, state unemployment will pay 50% of your earnings up to a maximum benefit of $300-$400 or so. The stimulus bill will pay $600/week above what workers will receive under normal unemployment circumstances. Someone working full time earning federal minimum wage would receive benefits equal to wages working out to $18.725/hour, and someone earning $15/hour full time would receive benefits equal to wages working out to $22.5/hour. This creates a disincentive to look for work, and there are over a million newly opened temporary jobs resulting from the additional demands caused by the coronavirus. I would expect Amazon, CVS, and grocery stores to have difficulty filling these jobs.

The stimulus package has been described by many as a "wartime bill" and in many ways it is. Based on projects on how much the US economy will shrink, the federal deficit may reach 15-20% of the GDP in 2020. By comparison, the deficit reached 27% in 1943 in WW2, and was above 20% throughout WW2. What people are willing to accept in wartime is different than what people are willing to accept in normal circumstances.

[TwitchySeal]

The direct cash payments are actually advances on tax credits for the 2020 tax year.

I don't think so.  I think it's pretty much no strings attached cash, but I'm not sure.  Where did you read that?

[PrimeNumber7]

The direct cash payments are actually advances on tax credits for the 2020 tax year.

I don't think so.  I think it's pretty much no strings attached cash, but I'm not sure.  Where did you read that?

The New York Times

What if my recent income made me ineligible, but I anticipate being eligible because of a loss of income in 2020? Do I get a payment?

The plan does not help people in that circumstance now, but you may benefit once you file your 2020 taxes. That’s because the payment is technically an advance on a tax credit that is available for the entire year. So it will depend on how much you earn.

And there are many other provisions in the legislation. You may be able to file for unemployment or for one of the new loans for small business owners or sole proprietors.

I have not read the text of the law, however, my reading of this FAQ is that payments will be sent based on the most recent return you have filed, and the actual amount will be based on your 2020 income.

[TwitchySeal]

The direct cash payments are actually advances on tax credits for the 2020 tax year.

I don't think so.  I think it's pretty much no strings attached cash, but I'm not sure.  Where did you read that?

The New York Times

What if my recent income made me ineligible, but I anticipate being eligible because of a loss of income in 2020? Do I get a payment?

The plan does not help people in that circumstance now, but you may benefit once you file your 2020 taxes. That’s because the payment is technically an advance on a tax credit that is available for the entire year. So it will depend on how much you earn.

And there are many other provisions in the legislation. You may be able to file for unemployment or for one of the new loans for small business owners or sole proprietors.

I have not read the text of the law, however, my reading of this FAQ is that payments will be sent based on the most recent return you have filed, and the actual amount will be based on your 2020 income.

Ah yeah, that makes sense.  I thought you meant it would be deducted from 2020 tax credits.

I heard that when they calculate it they will use your 2018 return if you haven't filed yet, and you get to keep it even if your eventual 2019 return would lower your payment or disqualify you.

Conversely, I think if you didn't qualify in 18 or 19 (made over $100k), but you do in 2020 (made under $100k), you would also be able to claim it when you file in 2021.

I guess they really want people to not worry about having to give it back.

[squatz1]

The direct cash payments are actually advances on tax credits for the 2020 tax year.

I don't think so.  I think it's pretty much no strings attached cash, but I'm not sure.  Where did you read that?

The New York Times

What if my recent income made me ineligible, but I anticipate being eligible because of a loss of income in 2020? Do I get a payment?

The plan does not help people in that circumstance now, but you may benefit once you file your 2020 taxes. That’s because the payment is technically an advance on a tax credit that is available for the entire year. So it will depend on how much you earn.

And there are many other provisions in the legislation. You may be able to file for unemployment or for one of the new loans for small business owners or sole proprietors.

I have not read the text of the law, however, my reading of this FAQ is that payments will be sent based on the most recent return you have filed, and the actual amount will be based on your 2020 income.

Ah yeah, that makes sense.  I thought you meant it would be deducted from 2020 tax credits.

I heard that when they calculate it they will use your 2018 return if you haven't filed yet, and you get to keep it even if your eventual 2019 return would lower your payment or disqualify you.

Conversely, I think if you didn't qualify in 18 or 19 (made over $100k), but you do in 2020 (made under $100k), you would also be able to claim it when you file in 2021.

I guess they really want people to not worry about having to give it back.

I think that is actually how it is going to work. I'm going to provide a bit of an example to make it easier, look below for that.

Imagine you're married and you and your wife made 185,000 on your most recent tax return. Great, that means that you're entitled to some money due to the stimulus package -- not the full payment of $1200 a person, because your income is too high, but you'd get something. Problem is in 2020 your tax return says that you've made 200,000 as a couple. The phase out was 192,000 (somewhere in this realm) and now you're going to have to return the money you got back to the government.

I think this is how it works, as this was supposed to help people who didn't make money in 2020 -- people that lost their jobs and such due to the virus. Not people that lost their jobs in 2018,2019.

There are other programs out their though, unemployment across the nation has an additional $600 a  week for people (up to July 31'st), which is very substantial to people who weren't making much before this and were only thinking they would get like $300-400 a week from unemployment.

Lots of stuff out their for small businesses to try to keep as many employees on as they can -- tax credits, loans for payrolls, 10k grant for those with damages, etc.

[BADecker]

Is my stimulus money in the mail yet?     

[Sadlife]

In my opinion this is just a bailout from a collapsing economy from my perspective they're handing out free money in order to make the economy go round. And even though some people may see this as a good deed, but in my perspective the fed/banks are just printing out trillions of money out of nothing injecting into the monetary system lowering the purchasing power of USD.

[TECSHARE]

Dumb. Suspend income taxes indefinitely. Don't take money from people and hand it back to them. This is not only of limited benefit, it also creates a dangerous dependence on government. The government should be dependent on the people, no the people dependent on the government. People dependent on the government = slaves, not free men.

[TwitchySeal]

Dumb. Suspend income taxes indefinitely.

The people who didn't lose any income would receive the most assistance.
The people who lost their jobs would receive none.

Do you understand the motivation for the stimulus package?

[Mad7Scientist]

Dumb. Suspend income taxes indefinitely. Don't take money from people and hand it back to them. This is not only of limited benefit, it also creates a dangerous dependence on government.

Yes! They are using this to push Socialism! It is awful!

Concerning the economy, remember that our money system is based on loans and repaying those loans, and most importantly the interest on those loans, using even more borrowed money. The system can never end unless the debt is legally abolished, since the only way to have enough dollars to pay the interest on the debt is to borrow more money which is created out of nothing.

So what happens is when people get scared they stop taking out new loans. Business loans stop, home loans slow down, car loans slow down, student loans stop, etc. So this creates a deflationary condition as money is sucked out of circulation to pay the interest on existing loans, and big economic trouble follows. Eventually either every dollar in circulation will disappear or people will default on the loans. If newly created money in the form of a stimulus checks being sent to everyone is done, this injects new money in to the economy and stops the run away deflation situation.

[TwitchySeal]

Yes! They are using this to push Socialism!

And Capitalism!  At the same time!

I hope it works.

[Mad7Scientist]

And Capitalism!  At the same time!

Just the bad parts of Capitalism.

Do you have some examples of Capitalism that is being pushed due to this crisis?

[TwitchySeal]

And Capitalism!  At the same time!

Just the bad parts of Capitalism.

Do you have some examples of Capitalism that is being pushed due to this crisis?

I think the reason it got so much support from republicans is because they think it could prevent the economy from collapsing from the bottom, which would take much longer to recover from.

In other words, the socialist bill could result in a much stronger economy a couple years from now, which means we have more 'room' for more capitalism sooner.

Of course, we don't know for sure the economy would collapse without the bill, or that it won't with it.  But - the fact it got so much support from Republicans really says something (I don't think they're all secret socialists - but if you do that would completely negate everything I just said)

[Spendulus]

And Capitalism!  At the same time!

Just the bad parts of Capitalism.

Do you have some examples of Capitalism that is being pushed due to this crisis?

I think the reason it got so much support from republicans is because they think it could prevent the economy from collapsing from the bottom, which would take much longer to recover from.

In other words, the socialist bill could result in a much stronger economy a couple years from now, which means we have more 'room' for more capitalism sooner.

Of course, we don't know for sure the economy would collapse without the bill, or that it won't with it.  But - the fact it got so much support from Republicans really says something (I don't think they're all secret socialists - but if you do that would completely negate everything I just said)

The way I read it, it's an attempt to avoid a repeat of something like the Great Depression.

That sort of thing really happens in the minds of the people, not in the basic economic facts. Can things go back to normal? Semi normal? How about normal without cruise ships?

The government is trying its best to encourage a positive attitude in the people. I have to agree and support that.