I would urge Tim Wonder to put his critique of the Senate plan together in
a op-ed piece and try to place it in a, high impact, newspaper editorial
It would be worth a try...
Universidad Autónoma de Zacatecas (México)
So the idea of a letter supporting sending the majority of money to
> households was not ideologically pure enough. We are now seeing what is
> coming out of the senate. It is a 2 trillion dollar plan with only a tiny
> smidge given to households. The vast majority will go into the pockets of
> wealthy business owners who will be classified as "small business people".
> Some math on the fiscal boondoggle. 2 trillion is enough to give every man
> woman and child in America around 6,000 dollars. A family of four could
> get roughly $24,000. A family of 3 could get roughly $18,000. Yes those
> numbers are accurate. Instead the plan is to give ONLY the adults $1200
> and 500 for children, BUT ONLY if you are above or below certain incomes.
> Low income people would get nearly 0. Incomes above 75k would have it
> tapered off. Further the money in the senate plan would not be money to
> you, it would be your tax return from next year sent early NOT a payment
> from the government. Simply put this plan is a 2 trillion dollar wealth
> give away to the very rich.
> To put this in context I published a paper in 2018 where I simulated a 3
> trillion dollar package where the money went to payoff household debts.
> That simulation showed that for the mean households in the bottom 60% of
> income quintiles had nearly all of their debt (besides mortgages)
> eliminated. Below are the conclusions from the paper. (Wunder 2018 JEI
> "The current household debt in the US is $12.96 trillion dollars. This
> debt has many negative social consequences and the economic growth of the
> last forty years was predicated on the creation of this debt. A lump sum
> payment at the household level would serve to significantly lower real
> debt levels. Such a payment would eliminate most credit card balances, as
> well as eliminate many of the debts currently associated with auto
> lending, personal loans,
> education loans, and medical bills. Furthermore, such a policy would give
> millions of households a cash payment that they could use to stimulate
> broader economic activity. The cost of this payment would increase
> outstanding government debt by $3 trillion, a roughly 19-percent increase
> in the current government debt levels."
> But hey huge chunks of households having massive amounts of their debts
> being paid off isn't really that good anyways right? I mean we couldn't
> push for those big payments ANNNNDDDD systemic changes to stop the debt
> from being reissued. We couldn't point out the massive boondoggle going on
> AND push for sick leave and... Of course these numbers will never be put
> out in the media because... Why is that again? Why are these numbers in
> the media?
> I gave up on the letter because the response was so underwhelming. But
> the overwhelming left wing policies that have been offered to counter the
> munchkin plan have been deafening though. They have been so loud I
> couldn't even here them.
> Timothy A Wunder
> Clinical Associate Professor of Economics
> Department of Economics