Why Does Income Play a Part in Stimulus Check?

ReallybroReally wrote:

I personally went to a small restaurant I eat at 2 times or so a month and dropped $100 on the counter and left. That is more than the total bill for the 2 times per month.

That's a good thing. I've over tipped at places I know are hurting.

But that is not a sustainable economic option.

The servers at the restaurant are unemployed now. Your $100 won't make it to them. It goes to whoever is working there at the moment.

Instead of giving you $1,200, I'd rather see an additional $1,200 go to the restaurant people directly.

Maybe an additional $400 can be given to 3 out of work people instead of going to a mortgage company manager who is processing a bunch of loan refis right now.

X-Runner wrote:

ReallybroReally wrote:

I personally went to a small restaurant I eat at 2 times or so a month and dropped $100 on the counter and left. That is more than the total bill for the 2 times per month.

That's a good thing. I've over tipped at places I know are hurting.

But that is not a sustainable economic option.

The servers at the restaurant are unemployed now. Your $100 won't make it to them. It goes to whoever is working there at the moment.

Instead of giving you $1,200, I'd rather see an additional $1,200 go to the restaurant people directly.

Maybe an additional $400 can be given to 3 out of work people instead of going to a mortgage company manager who is processing a bunch of loan refis right now.

Those who lost jobs are also getting extra unemployment insurance. My gudiance to the young lady at the counter for the $100 was "spread it around as you see fit"

student of economics wrote:

I am sure there are U.S. citizens who have a net worth greater than $2.5 million dollars who are thinking of ways to buy real estate in Italy now.

You said "dollars" twice. I don't think you're really a student of economics.

ReallybroReally wrote:

Those who lost jobs are also getting extra unemployment insurance.

Yeah. And they are able to do that by not giving higher earners stimulus checks.

You take the money that would have gone there, and use it to supplement unemployment insurance.

It's not an endless pot of money.

Choices get made.

Means testing is just a fetish of centrist democrats who use it as a political ploy to appeal to fiscal conservatives. If we were at the point were the virus was under control and people could return to a new normal, a cash injection like this would help kick start the economy by pushing pent up consumer demand into the market.

But the big economic problem right now isn't that people aren't spending money (stay with me), it is that people can't spend money because they risk exposure to the virus if the go to a restaurant or take a vacation. The real economic problem is all the people who are unemployed or underemployed who cannot pay their bills. The economic stimulus does not do much for them, especially people who just lose hours or are a sole proprietor and not eligible for unemployment.

If we were smart, and we are not, we would have a Coronavirus Adjustment Act that would suspend all financial obligations eight weeks and provide bail out money to the financial system at the top end of the financial food chain. So, the tenant doesn't have to pay rent for two months. The landlord doesn't have to pay his mortgage for two months and the lender on the mortgage gets those two missed months paid by the federal government. Same for credit cards, personal loans, mortgages, car loans, utilities, and any other essentials. Porn subscriptions, country club memberships, etc. would not be affected. This would basically freeze the economy for two months and then allow everyone to go back to work as if nothing happened.

This is not a classic stimulus. Indeed, we don't want people to go out and consume now, we want them to sit at home. A stimulus makes more sense once the economy has re-opened, to jumpstart demand if needed.

They have something in European countries (not to sound like Bernie, but he has a point) that makes a lot of sense in time like these: a company can keep an employee on payroll, but need only pay him x % of the wage (if he works only x% of normal hours), where x is between 10 and 80. The government pays the difference up to 80%. So if you work for BMW and you only work one day a week now (20%), the gov't pays you 60% of your regular pay, and you lose only 20% on net. The advantage to traditional unemployment insurance is that it is more flexible and more workers stay attached of firms. Firms don't have to re-hire people. It's important that this mechanism is only active in recessions. I think it makes a lot of sense. It is better targeted than just writing people below a certain income level checks.

Because making 150k means you should of been smart enough to have a sizeable emergency fund. If not then you penalized yourself. Get real.

The European model is smart, but this stimulus actually pumps far more money than that into the economy and its needed. This is a desperate attempt to not have the shutdown roll up the economic food chain. The hope is that this shutdown is 4-6 weeks. The $1200 is to cover your rent, mortgage, and key payments during that time so that this doesn't roll up the food chain to landlords and up to banks. Remember, its more than just the workers. Restaurant owners have rent to pay as well and utilities.

Additionally, when the economy comes back on line, there is incentive for the wealthier people who received the check to spend on the areas that were most hurt: restaurants and travel.

Not even a grammar Nazi wrote:

student of economics wrote:

I am sure there are U.S. citizens who have a net worth greater than $2.5 million dollars who are thinking of ways to buy real estate in Italy now.

You said "dollars" twice. I don't think you're really a student of economics.

Student: One who studies. An attentive systematic observer.

Wise guys. I am not a 14 to 24 attending a brick and mortar school. I competed my education as far as I wanted.

Do you want to differ on an issue?

Just checking back in as this quickly went off the rails - I posted for the principle of the matter. A stimulus is a stimulus. A virus does not discriminate. Those making above $150k can suffer from the virus and can contribute to the economy.

To bring this back to running, would you not support your more talented runners with workouts and racing opportunities, or would you over-invest in your least talented runners OR would you treat everyone a tad more equally to both raise the tide and lead up front?

AT THESWOOSH wrote:

Just checking back in as this quickly went off the rails - I posted for the principle of the matter. A stimulus is a stimulus. A virus does not discriminate. Those making above $150k can suffer from the virus and can contribute to the economy.

To bring this back to running, would you not support your more talented runners with workouts and racing opportunities, or would you over-invest in your least talented runners OR would you treat everyone a tad more equally to both raise the tide and lead up front?

if you are having trouble living off 150k plus you are not very talented. You are the kid whose parents paid for all the summer track camps and the ZoomSupeRFly5000%!s but you're still running 25:12 for the 5k.

AT THESWOOSH wrote:

Just checking back in as this quickly went off the rails - I posted for the principle of the matter. A stimulus is a stimulus. A virus does not discriminate. Those making above $150k can suffer from the virus and can contribute to the economy.

To bring this back to running, would you not support your more talented runners with workouts and racing opportunities, or would you over-invest in your least talented runners OR would you treat everyone a tad more equally to both raise the tide and lead up front?

1) The stimulus is not for the virus, the stimulus is for the economy. It doesn't matter that you could get the virus.

2) They are attempting to put the money to people who may bring down the economy. This isn't to jumpstart the economy, this is to save it.

3) How are you not getting this?

Dows Warren Buffet get a check if his income was only $50k last year?

Sounds like many of you are incorrect. Saving the hand-out is one of the recommended options, which goes back to the economic principle of driving an economy holistically, not with some arbitrary income number as guidance. I have a lot of cash saved up, but my world is also not normal at this point in time because of the situation. Once again, no one is making a valid argument here -

https://www.usatoday.com/story/money/personalfinance/2020/03/29/stimulus-check-heres-how-use-your/2935290001/

I already gave you the real answer. It has nothing to do with who really needs it or will use it. Politics. The D's would not support helping anyone "rich" because that is not fair (to them).

AT THESWOOSH wrote:

To bring this back to running, would you not support your more talented runners with workouts and racing opportunities, or would you over-invest in your least talented runners OR would you treat everyone a tad more equally to both raise the tide and lead up front?

Frontrunner for worst analogy of the day.

AT THESWOOSH wrote:

Sounds like many of you are incorrect. Saving the hand-out is one of the recommended options, which goes back to the economic principle of driving an economy holistically, not with some arbitrary income number as guidance. I have a lot of cash saved up, but my world is also not normal at this point in time because of the situation. Once again, no one is making a valid argument here -

https://www.usatoday.com/story/money/personalfinance/2020/03/29/stimulus-check-heres-how-use-your/2935290001/

Are you crazy? Did you read the article?

Let me lay it out for you:

1) the article starts by saying this is to help people who lost their job and otherwise may not be able to make rent. aka a recommendation to spend it.

2) for those who don't need it they suggest saving it BECAUSE they may need it if this goes on longer and the effects trickle through the economy.

The world is not normal for anyone. You have money saved up. This is for people who don't have money saved up. Is this fair? Heck no its not fair. But this isn't about being fair this is about saving the economy.

I'm with you on a lot of that.

But that could not be done quickly and correctly.

And it doesn't help people with lost income buy food.

Unless you give them ample lines on credit cards that they wouldn't be required to be paid, which is the same thing as a stimulus payment.

The mechanics of all of those economic connections would be impossible to rework.

I do really like the idea of suspending any payment to financial institutions and having the government give them 0% loans for their cash flow and payroll.

They are buying off the poors like they always do.

Just look at it as a way to keep the poor at bay and stop some big Bolshevik type revolution. If $1000 shuts them up, so be it.