Trump Wants $850 Billion in Stimulus with an Airlines Bailout

MplsGopher

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The punchline is that Krugman thinks we need a much bigger stimulus.

I think making a huge investment in infrastructure, could be (at least part) an answer. Also feel like its a "now or never" moment to do this, as in normal time such massive spending could never be agreed upon by our hyper-partisan congress.
 

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Other than essentials, what can people spend money on? The unemployed might need money for rent and groceries, but it doesn't do the employed any good. The money will sit in the bank or be donated. Everyone doesn't need a check. We don't need stimulus. We need to keep people on payrolls to maintain capacity and we need people to have a place to live and eat. That's a rescue package, not a stimulus package.
 

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Other than essentials, what can people spend money on? The unemployed might need money for rent and groceries, but it doesn't do the employed any good. The money will sit in the bank or be donated. Everyone doesn't need a check. We don't need stimulus. We need to keep people on payrolls to maintain capacity and we need people to have a place to live and eat. That's a rescue package, not a stimulus package.
Yes, that's essentially the same as Krugman said.
 

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Other than essentials, what can people spend money on? The unemployed might need money for rent and groceries, but it doesn't do the employed any good. The money will sit in the bank or be donated. Everyone doesn't need a check. We don't need stimulus. We need to keep people on payrolls to maintain capacity and we need people to have a place to live and eat. That's a rescue package, not a stimulus package.
Correct. If somehow the crisis instantly passed, is there any reason to believe the economy wouldn't roar right back? The opportunism and hypocrisy on display is stunning. Yet not at all surprising.
 

Section2

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Correct. If somehow the crisis instantly passed, is there any reason to believe the economy wouldn't roar right back? The opportunism and hypocrisy on display is stunning. Yet not at all surprising.
yes. we are a massively overleveraged economy in all ways. if the crisis passed tomorrow, there will be massive changes in the American economy. That kind of change is hugely disruptive and leads to huge losses which set off a chain reaction. For example, what will happen to commercial real estate? Would malls go back to normal? I don't think so. Will more companies have smaller offices and have more remote employees? yes, that was a long term trend already and this will accelerate. That alone could spur a 2008 style financial crisis with just commercial real estate.

This is looking like the big one. The problem is the best way to deal with this is to allow prices to readjust quickly, bad debts wound down, cut government spending. Find the new equilibrium as fast as possible. That's just not the playbook from either party. Trump is going to do the opposite and both parties will probably agree. Which means extended pain and a prolonged depression.
 

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yes. we are a massively overleveraged economy in all ways. if the crisis passed tomorrow, there will be massive changes in the American economy. That kind of change is hugely disruptive and leads to huge losses which set off a chain reaction. For example, what will happen to commercial real estate? Would malls go back to normal? I don't think so. Will more companies have smaller offices and have more remote employees? yes, that was a long term trend already and this will accelerate. That alone could spur a 2008 style financial crisis with just commercial real estate.

This is looking like the big one. The problem is the best way to deal with this is to allow prices to readjust quickly, bad debts wound down, cut government spending. Find the new equilibrium as fast as possible. That's just not the playbook from either party. Trump is going to do the opposite and both parties will probably agree. Which means extended pain and a prolonged depression.
Automation will increase a lot. Get ready to see more self-serve kiosks at restaurants. More office work will get automated too.
 

GopherJake

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yes. we are a massively overleveraged economy in all ways. if the crisis passed tomorrow, there will be massive changes in the American economy. That kind of change is hugely disruptive and leads to huge losses which set off a chain reaction. For example, what will happen to commercial real estate? Would malls go back to normal? I don't think so. Will more companies have smaller offices and have more remote employees? yes, that was a long term trend already and this will accelerate. That alone could spur a 2008 style financial crisis with just commercial real estate.

This is looking like the big one. The problem is the best way to deal with this is to allow prices to readjust quickly, bad debts wound down, cut government spending. Find the new equilibrium as fast as possible. That's just not the playbook from either party. Trump is going to do the opposite and both parties will probably agree. Which means extended pain and a prolonged depression.
An actual constructive response from S2. Congratulations.

So, you contend that if somehow, magically - which is the condition I set above - the crisis was solved tomorrow, the economy would not recover nearly immediately? Yes, the malls would go back to normal in that case. Yes, commercial real estate would remain essentially the same. I don't believe that working remotely is the most effective form of work for a variety of reasons. Is it feasible to do some work remotely? Absolutely - and yes, flexibility has become a bigger part of the equation. Yet operating remotely can still be cumbersome - even with Zoom and all the other online connection tools. So I disagree it will disappear or drop precipitously.

Even if the crisis is not magically solved, but we do find a feasible solution within the 6 months and we can resume the new normal, I feel like the economy would bust back open. There is a lot of repressed spending right now as people take cover. Those dollars will fly if this thing gets solved.

As for your 2nd paragraph - you are a person that advocated for the $2.2T blank check. So, your comments here ring pretty darned hollow.
 

Face The Facts

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I feel this shutdown just moved us 2-5 years closer to the automation of many, many more jobs.
People are finding out more jobs can be done remote. People are finding out more jobs can be automated. People are finding out some jobs weren't really that necessary.

This situation if anything has moved us 2-5 years closer to universal basic income. (I'd event venture to say 10 years closer). Problem is it is still another epidemic / catastrophe away. (Likely 12-16 years away yet). The U.S. government isn't going to go to UBI until it's the absolute last option on the table.

If 90% of the population is miserable right now living check to check, and 5% is pretty well off, and 5% are rich or uber rich, it's not bad enough for our government to take more action.
It will need to be 98-99% doing horrible before it's enough to correct the underlying issue of wealth in-equality / lack of excellent paying jobs to balance out the field.
 

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Automation will increase a lot. Get ready to see more self-serve kiosks at restaurants. More office work will get automated too.
Definitely. The box the government is going to soon be in is this: bailing out all businesses is going to prop up business models that are no longer relevant. And retard the emergence of new ones that will be relevant.
 

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I feel this shutdown just moved us 2-5 years closer to the automation of many, many more jobs.
People are finding out more jobs can be done remote. People are finding out more jobs can be automated. People are finding out some jobs weren't really that necessary.

This situation if anything has moved us 2-5 years closer to universal basic income. (I'd event venture to say 10 years closer). Problem is it is still another epidemic / catastrophe away. (Likely 12-16 years away yet). The U.S. government isn't going to go to UBI until it's the absolute last option on the table.

If 90% of the population is miserable right now living check to check, and 5% is pretty well off, and 5% are rich or uber rich, it's not bad enough for our government to take more action.
It will need to be 98-99% doing horrible before it's enough to correct the underlying issue of wealth in-equality / lack of excellent paying jobs to balance out the field.
we can produce much more with less labor. there will always be a demand for human labor, but price of labor needs to be flexible. minimum wages get in the way.

I just really struggle to understand how 2 months ago in an economy with 3% unemployment why the idea of UBI got traction.
 

Face The Facts

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Definitely. The box the government is going to soon be in is this: bailing out all businesses is going to prop up business models that are no longer relevant. And retard the emergence of new ones that will be relevant.
Just like they did when they saved GM in 2009. Prop up the old.

My argument however would be that there are not enough emergence of new companies that employ a lot. Most new jobs are gig-economy which tend to be low paying jobs for the majority.

New emergence of new innovative companies very seldom produce new middle-high income jobs, except for the areas of jobs that are already high in demand. So it may drive high paying jobs to higher paying jobs, but very little is done in creation of strong paying "new" jobs that were not already in demand.

Example is Uber or these food delivery services. It's a new skill. Ability to drive a car and deliver people or food, but it's not really good paying.

Software engineers make good money, and these new companies need them, but those aren't helping the majority of non-software programming jobs.
Management jobs might be created, but I'm not sure if new management jobs are increasing faster than what they are disappearing.
 

Face The Facts

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we can produce much more with less labor. there will always be a demand for human labor, but price of labor needs to be flexible. minimum wages get in the way.

I just really struggle to understand how 2 months ago in an economy with 3% unemployment why the idea of UBI got traction.
The idea of UBI getting traction is despite the fact there were jobs and only 3% unemployment, I'd say 60-70% of those jobs are not "well paying" jobs.
Also, many of those jobs aren't "strongly necessary". We saw that by how quickly so many were cut in just a 2-4 week timeframe.

A greater portion of our economy is becoming jobs that can be quickly disposable.

Restaurant chef, restaurant server, hair stylist, nail stylist, uber driver, food delivery, non-grocery retail.

If I can hire someone cheap, yes, the model works if I have a certain threshold of "suitably generous" customers. But when a bad impact hits the market, suddenly there are not enough "suitably generous" customers and the system dries up in an instant.
 

Face The Facts

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So much of our economy is now based on services and most services really aren't that necessary.

People don't really need to buy stuff anymore. People need a house, a car, some clothes, and a TV.
TV's have gotten really cheap. Furniture has become disposable and changes with trends. Cars are becoming less valued.

In the end, people are spending more money on experiences which are optional. Eating at restaurants / traveling, getting massages, manicures, etc. None of this is really essentials to living however as COVID-19 has shown us.
 

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Definitely. The box the government is going to soon be in is this: bailing out all businesses is going to prop up business models that are no longer relevant. And retard the emergence of new ones that will be relevant.
The problem I have on criticizing THIS bailout issue is it isn't failed business models that are causing the issue. The issue is being caused from a government enforced shutdown because of a virus (justifiably so). In some ways, it's similar to the government taking property from a private landowner for the public good via eminent domain; except in eminant domain, the property owner is compensated for the value taken.

For example, right now, the government enforced shutdown is driving small businesses out of business as I type this. Many previously successful restaurants, hair salons, real estate transactional related businesses, and other main street businesses won't come back from this. The overhead related bills (mortgage/rent, various loan payments, utilities, insurance, health, living expenses) keep coming regardless of whether sales money is coming in or not. Theses businesses don't have months of cash saved up to weather a multi-month shut down. Their business models were working just fine before the forced shut downs. They need to be compensated for their government enforced loss...so yes, a bailout is justified similar to eminant domain.
 

MplsGopher

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If 90% of the population is miserable right now living check to check, and 5% is pretty well off, and 5% are rich or uber rich, it's not bad enough for our government to take more action.
It will need to be 98-99% doing horrible before it's enough to correct the underlying issue of wealth in-equality / lack of excellent paying jobs to balance out the field.
Well, the actual thing of is: at what level to people riot and start burning everything to ground, including rich people's homes?
 

MplsGopher

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Just like they did when they saved GM in 2009. Prop up the old.

My argument however would be that there are not enough emergence of new companies that employ a lot. Most new jobs are gig-economy which tend to be low paying jobs for the majority.

New emergence of new innovative companies very seldom produce new middle-high income jobs, except for the areas of jobs that are already high in demand. So it may drive high paying jobs to higher paying jobs, but very little is done in creation of strong paying "new" jobs that were not already in demand.

Example is Uber or these food delivery services. It's a new skill. Ability to drive a car and deliver people or food, but it's not really good paying.

Software engineers make good money, and these new companies need them, but those aren't helping the majority of non-software programming jobs.
Management jobs might be created, but I'm not sure if new management jobs are increasing faster than what they are disappearing.
This is just getting at the point that the farther we go into the future, the less there will be a need for human labor, and the more highly skilled your labor will need to justify a human doing it.

All you need to do is say "*poof* we no longer need any human to drive any car, van, truck, or bus, they can all be done automatically and more safely than a human at the wheel" = great depression.
 

MplsGopher

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So much of our economy is now based on services and most services really aren't that necessary.

People don't really need to buy stuff anymore. People need a house, a car, some clothes, and a TV.
TV's have gotten really cheap. Furniture has become disposable and changes with trends. Cars are becoming less valued.

In the end, people are spending more money on experiences which are optional. Eating at restaurants / traveling, getting massages, manicures, etc. None of this is really essentials to living however as COVID-19 has shown us.
The amount of money in the world that was out there in Feb, is still the amount of money in the world that's out there right now. It didn't go anywhere. It's just much more frozen (not flowing).

The government will become the biggest "agitator" (in the sense of a washing machine) to force money to keep flowing. Money flow is the economy.
 

Panthadad2

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So much of our economy is now based on services and most services really aren't that necessary.

People don't really need to buy stuff anymore. People need a house, a car, some clothes, and a TV.
TV's have gotten really cheap. Furniture has become disposable and changes with trends. Cars are becoming less valued.

In the end, people are spending more money on experiences which are optional. Eating at restaurants / traveling, getting massages, manicures, etc. None of this is really essentials to living however as COVID-19 has shown us.
That scenario sounds a lot like the Great Depression. A healthy economy involves a high level of small transactions for many things that don't involve the basic necessities of food, shelter and health. Sorry, but I don't want to go through what my deceased grandparents went through in the 1930s.
 

scools12

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If 90% of the population is miserable right now living check to check, and 5% is pretty well off, and 5% are rich or uber rich, it's not bad enough for our government to take more action.
It will need to be 98-99% doing horrible before it's enough to correct the underlying issue of wealth in-equality / lack of excellent paying jobs to balance out the field.
Straight out of the progressive left talking points playbook. UBI is not gaining traction and neither is socialism.
 

Section2

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The problem I have on criticizing THIS bailout issue is it isn't failed business models that are causing the issue. The issue is being caused from a government enforced shutdown because of a virus (justifiably so). In some ways, it's similar to the government taking property from a private landowner for the public good via eminent domain; except in eminant domain, the property owner is compensated for the value taken.

For example, right now, the government enforced shutdown is driving small businesses out of business as I type this. Many previously successful restaurants, hair salons, real estate transactional related businesses, and other main street businesses won't come back from this. The overhead related bills (mortgage/rent, various loan payments, utilities, insurance, health, living expenses) keep coming regardless of whether sales money is coming in or not. Theses businesses don't have months of cash saved up to weather a multi-month shut down. Their business models were working just fine before the forced shut downs. They need to be compensated for their government enforced loss...so yes, a bailout is justified similar to eminant domain.
Yes, I agree that the government certainly had a hand in shutting down businesses. Almost everyone is going to take a hit to their pocketbook. Where is the money going to come from to make all of those businesses whole? It doesn't exist. I think the only think you can do is to provide some cash to individuals to get them thru the shutdowns. After that, I don't know how you can fairly compensate businesses without causing all kinds of new disruption that is going to keep us in a sustained downturn.
 

Face The Facts

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Straight out of the progressive left talking points playbook. UBI is not gaining traction and neither is socialism.
I'm not a "leftist".

I know UBI isn't gaining traction and it won't until it's absolutely, positively necessary and it will be implement no sooner than 6-months too-late.

Our economy was soaring just a couple months ago, but it's a paper thin economy that can stop on a dime. Each stoppage of the economy will be able to stop sooner and quicker than the last. Jobs / unemployment will become more volatile each passing year. At some point the government will notice that and need to control the volatility of people's income.
 

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Smaller countries that have like-minded people -- ie, they can actually do things -- have already implemented this on more of a trial basis. I know in Finland they have it.
 

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Other than essentials, what can people spend money on? The unemployed might need money for rent and groceries, but it doesn't do the employed any good. The money will sit in the bank or be donated. Everyone doesn't need a check. We don't need stimulus. We need to keep people on payrolls to maintain capacity and we need people to have a place to live and eat. That's a rescue package, not a stimulus package.
There's no question this package was crude and blunt, but I do believe it was the best that could be agreed upon in a short time frame.

When you see the lines for food shelves, that's the glaring sign of where additional relief needs to go. Additionally, my fear is mass evictions; hopefully I'm wrong.
 

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The double whammy, of course, is that, not only are these millions of people losing their jobs and income, many of them are losing their health insurance right during the worse public health crisis of our lifetimes.
 

cncmin

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I feel this shutdown just moved us 2-5 years closer to the automation of many, many more jobs.
People are finding out more jobs can be done remote. People are finding out more jobs can be automated. People are finding out some jobs weren't really that necessary.

This situation if anything has moved us 2-5 years closer to universal basic income. (I'd event venture to say 10 years closer). Problem is it is still another epidemic / catastrophe away. (Likely 12-16 years away yet). The U.S. government isn't going to go to UBI until it's the absolute last option on the table.

If 90% of the population is miserable right now living check to check, and 5% is pretty well off, and 5% are rich or uber rich, it's not bad enough for our government to take more action.
It will need to be 98-99% doing horrible before it's enough to correct the underlying issue of wealth in-equality / lack of excellent paying jobs to balance out the field.
Decent post, but to describe 90% of the population as "miserable" (implication being prior to the CV-19 stuff, I presume) is either incorrect or a strange description of "miserable". Leave it to we whiney Americans to believe that our lives, with a pretty decent life well above that of the average person in the world, are "miserable".
 

Section2

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Just like they did when they saved GM in 2009. Prop up the old.

My argument however would be that there are not enough emergence of new companies that employ a lot. Most new jobs are gig-economy which tend to be low paying jobs for the majority.

New emergence of new innovative companies very seldom produce new middle-high income jobs, except for the areas of jobs that are already high in demand. So it may drive high paying jobs to higher paying jobs, but very little is done in creation of strong paying "new" jobs that were not already in demand.

Example is Uber or these food delivery services. It's a new skill. Ability to drive a car and deliver people or food, but it's not really good paying.

Software engineers make good money, and these new companies need them, but those aren't helping the majority of non-software programming jobs.
Management jobs might be created, but I'm not sure if new management jobs are increasing faster than what they are disappearing.
Yes, they should not have bailed out the auto companies.

I don't really understand your middle graph. Is your complaint that there aren't companies emerging which will pay 6 figures for people who have no skills currently in demand? That shouldn't be a surprise. Yes, ability to drive a car is a skill that basically every 16 year old has, therefore not high paying.

A central government (or really, any government) cannot engineer society. It has been tried and is always a failure. This country spends over a trillion a year in welfare. If you want to replace that spending with some kind of baseline income on top of which people can earn whatever they want, I'm all for it. It's not the best solution, but it's probably the least damaging. But that has not been proposed by anyone to my knowledge.
 

Face The Facts

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Decent post, but to describe 90% of the population as "miserable" (implication being prior to the CV-19 stuff, I presume) is either incorrect or a strange description of "miserable". Leave it to we whiney Americans to believe that our lives, with a pretty decent life well above that of the average person in the world, are "miserable".
Miserable is post CV-19. I don't think people realized miserable was around the corner but it very well could be.

Maybe miserable for 40% and the other 50% could fall into a category of "unaware of risk of miserable" due to the fact they can still make things work check to check.
 

Face The Facts

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Yes, they should not have bailed out the auto companies.

I don't really understand your middle graph. Is your complaint that there aren't companies emerging which will pay 6 figures for people who have no skills currently in demand? That shouldn't be a surprise. Yes, ability to drive a car is a skill that basically every 16 year old has, therefore not high paying.

A central government (or really, any government) cannot engineer society. It has been tried and is always a failure. This country spends over a trillion a year in welfare. If you want to replace that spending with some kind of baseline income on top of which people can earn whatever they want, I'm all for it. It's not the best solution, but it's probably the least damaging. But that has not been proposed by anyone to my knowledge.
Agree on auto companies.

My point on the new companies not creating jobs that create 100k jobs is just a statement. New companies are not created to have a hearty depth of jobs that pay well. No one designs a company that way. Cheap labor is better than expensive labor. It's just something that's occurring now and will continue to become more prevalent over time. This will continue until markets demand something else or government intercedes somehow which is difficult to do effectively (if possible at all).

Governments failing in the past does not indicate it can better engineer a society. I really doubt the U.S. government is capable of solving this issue either until forced to.

Example, the increased unemployment benefits given to those who are now unemployed. This never would have occurred 30-50 years ago when there was less of a divide on earnings and less dual income households. But we've pushed our nation to the point where 2 incomes is expected and needed and now due to the amount of backlash / poverty our nation will endure from this crisis, even our government decided checks needed to be sent to people.

There is a realization now that we literally have about 40-50% of our population 2 paycheck away from poverty.
 

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One interesting aspect of UBI is the following idea.

Let's say some large percentage of humans are not longer employable, say 95%. Either a piece of software, or a robot, does the job better and cheaper. So most people simply can't work. Obviously, these people still need to get money, both to survive but also to drive the economy. That's where the UBI comes in.

But here was what I was going to get to: if you want to most accurately reflect a "true" economy, you need a spectrum of incomes. Some poorer, some middle, some richer. Right? You can't have 95% of the people receiving exactly equal incomes, and expect it to accurately reflect a "true" economy, right?

So how on earth, then, are we going to decide who gets to be a "rich" person, or a "poor" person? If no one can work, how do you define merit??
 
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