Election Year Pandering in a Pandemic
mike.editor@midpush.com 200512, updated 200512
As American enter their 3rd month of huddling in place the US Congress and Executive branch are working overtime on how to give away money that is borrowed, or just plain printed out of nothing.
It is an election year and both sides are out in full force
Each side has their idea’s and the media is consistently pushing government to help more.
As we have been Sheltering-In-Place, I have been saving money. My monthly gasoline bill is way down. I no longer go to restaurants 3-4 times a week. I don’t go to stores, browse, and impulse buy. And my airline travel to visit relatives has been put on hold for at least a year. I am not getting on a packed closed in petri-dish plane. Sorry. It appears Hotels, Restaurants, Airlines, Mass Transit, and Stadium events will take big hits over the next year at least.
And there is only so much I need from Amazon’s Chinese factories. If I were to receive more money, I will just bank it. I am happy to take the taxpayers money, but is this the right way to handle this long term?
Idea's with severe problems
Although everyone loves getting free money from Uncle Sam, is it the best way to spend the taxpayers money? If you have a job still, do you need more money? Couldn’t this money be spent on people who have no jobs.
The real problem is unemployment is so high but a number of lucky individuals still have their jobs. And they are unable to spend as much money as the did 3 months ago.
Prior to the 2017 Federal Tax changes companies could write off expensive lunches and dinners as business entertainment expenses. Restaurants loved this tax benefit as hordes of business people would stream in, have a great time, good food and drink, and the expense could be used as a tax deduction.
This benefit was one of the casualty’s of the 2017 tax changes.
In 2018 resturants still survived although it cost companies more to “entertain”.
Forcing employee’s back into restaurant’s also makes no sense.
The CARE’s act provided money for loans to business who promised to keep their employee’s employed. However banks are not dumb. If it takes 5 hours to process a loan, and one business is asking for $10K, and another $500K, the bank makes, profit/sales, of $100 on the first loan, and $5K on the second.
If you were a bank manager, what would you do.
There should have been a fixed cost associated with processing a loan.
Otherwise, banks will not return calls from small requestors.
If you look at Canada, a country that many progressives in the US regard as a model country, they provide unemployment at 80% of the your prior income.
However in the US, and in many coastal states, it is possible to make more money on unemployment than by actually working at your prior job. And this at a time when it is hard to spend the money.
Ideally, unemployment would be a percentage of your prior income. Canada’s 80% figure seems good.
Bernie Sanders and Kamala Harris, both failed presidential candidates, have teamed together to come out with package that helps all.
Bernie is at least true to form here. He as always been at the forefront of the Progressive movement with a goal of equality for all.
Kamala, a new comer to this movement, has struggled as she has searched for the right giveaways and programs to give her credibility.
But their package basically works out to. If you make less than $120K/year, you get $2K/month per adult and children. A family of 2 parents and two children would get $8K/month, or $96K/year. Whether you are employed or not.
They are correct that the one time $1,200 stimulus check is insufficient. But this is nut’z.
During the 2008/2009 economic downturn the federal government required companies receiving federal help to reduce the salaries of their highest paid executives.
Salaries were limited to $500K/year, oh my!
This should be required at this time also. Why should a company receive a $10 million loan, when the CEO makes more then $10 million? Additionally people making over $250/K at some point should have their salaries reduced. There needs to be some hardship imposed on these monies received, otherwise, these are just grants.
As I writing this, Nancy Pelosi speaker of the house announced the House would be voting Friday, 5/15, on a $3 trillion bill that answers the aspirations of the Democratic party.
Undoubtedly it is filled with many items that will never pass the Senate or be signed by the President. The 116th Congress 2018/20, has passed many “Showcase Bills” that will never make it to law. But, they do receive great press from key news organization.
Ideally, bills being passed into law, say other then the annual budget, should be limited to $2 billion dollars.
Why, because each bill should be able to stand on it’s own. Who voted on what and who said no.
What Should Be done
Unemployment is presently $600/week and your state kicks in an additional amount.
You can take a couple tacks here. Federal Unemployment could pay up to $600/wk, but no more than 80% of your prior salary. If your state is generous with it’s people’s money, like California, it could kick in more.
Additionally at some point unemployment needs to begin ramping down.
There are people that may still wish to huddle in place, fine. But it should not be more lucrative to stay at home rather then get a job and support one’s self.
Homeowners, Students, and business have loans that may be difficult to pay if you are unemployed or business is slow.
Some of this has already been done but basically disallowing loan foreclosures for a bit and allowing interest to still accrue and be added to the loan principal is an easy way to solve this problem.
Mortgages for example usually for a term of 360 months. If loan payments are missed during this time, the down fall is that might be extended to 370 months, depending on what is missed.
If a house is sold, the payoff amount is just slight higher.
Closing
It is an election year. As a large segment of the Democratic Party has moved to the left and we are in the midst of an election more and more of the proposals appear to be an attempt to buy votes.
It is appropriate for the Federal Government to step in and help during this time of need. But some on Washington look at this as an opportunity to push their agenda. It is seen as an opportunity to spend more money then is being taken in. During an emergency, and we are there, it makes sense to borrow. But we have been borrowing for years now. Ideally, those who are working would pay more in taxes, money handed out would be enough and not provide a benefit to not work.