Free Money! Dems Team Up to Give Away the Farm, Barn & Outhouse
Article by Stephen Green in "PJMedia":
"Anything free is worth what you pay for it." — Robert Heinlein
Remember Matthew Lesko, the "Free Money Guy" from those late-night TV infomercials? He's still around on the web,
currently promising, for a small monthly membership fee, "free" help in
filling out government aid applications. With Lesko's aid, you can
apply for free money to pay for everything from $600 in car repairs, to
$25,000 for a new kitchen, to presidential birthday cards. Why anyone
needs help with that last item is beyond me, but Lesko has been at this
for a very long time so I'm assuming he must have some happy customers
somewhere. Although I have yet to spot one in the wild.
Lesko,
however, has nothing on "moderate" Democratic Ohio Congresscritter Tim
Ryan and progressive Democratic Congresscritter Ro Khanna. On Tuesday,
along with 17 other Democrat cosponsors, Khanna and Ryan introduced the
Emergency Money for the People Act which would transfer $2,000 a month
to every American over the age of 16 who makes less than $130,000 a
year. Qualifying families with kids 16 and under would receive an
additional $500 per child. For a not-untypical family like mine, that
comes out to a stipend of $60,000 a year -- even though my wife and I
are still working full-time at our pre-coronavirus jobs. The program
would last for six months or until the unemployment rate returns to the
pre-plague rate of 3.5%, whichever comes second.
Bear
with me here while I take you through some back-of-the-envelope math to
figure out how much all this Emergency Money is going to cost.
There
are approximately 70 million kids in the U.S. ages 16 and under, and
I'm going to assume that not enough of them make more than $130,000 to
matter for our simplified math. (Yes, I'm being cheeky.) Five hundred
dollars a month for six months (minimum) to each of them is $210 billion
dollars or more than a quarter of our annual defense budget.
Out
of approximately 250 million adult Americans, only about 21 million of
them make more than $100,000 per year. It's impossible to say how many
of them are below the $130,000 cutoff, so to keep things simple let's
knock a million people off the total for a nice, round 20 million. So we
have about 230 million adults getting $2,000 a month for the same six
months (minimum), plus those 70 million kids, which adds up to...
Did you already run the total in your head? If not, brace yourself.
$3,000,000,000,000
Three. Trillion. Dollars.!
Even Dr. Evil is impressed, and he spent six years attending Evil Medical School.
I'm not sure if the Emergency
Money would be in addition to unemployment benefits or added on top, but
seriously, any and everything over $3 trillion-with-a-T looks like a
rounding error.
I have a couple of questions.
• What the hell are we going to spend it on if we aren't going back to work, producing things?
• "Transfer" the money -- from where?
The first
question is the important one because Emergency Money only addresses the
symptoms of our economic troubles rather than the cause.
Small
businesses are failing left and right or soon will be, driving up
unemployment but more importantly, reducing opportunities for future job
gains once the crisis has passed. If we want the economy to rebound as
quickly as possible, Khanna is correct when she says that "A one-time,
$1,200 check isn't going to cut it." What the economy needs, and what I
proposed almost two weeks ago, is a debt moratorium [VIP link] for the duration of the Wuhan-virus crisis. While I certainly wouldn't mind an extra $2k a month, if my local ramen place
closes down* because they can't pay the rent or the lease on their
kitchen equipment, then it doesn't matter how much Emergency Money I
have to spend.
When
the Wuhan virus struck, it wasn't like the 2007-08 financial panic,
which suppressed consumer demand primarily through foreclosures and a
radical reduction in household wealth. What Wuhan did was force
governments to disrupt production via closures and stay-at-home orders.
The key to recovery is making sure that there are as few business
bankruptcies as is humanly possible so that when Americans are allowed
to go back to work, there are still jobs to go back to. Three trillion
dollars in cash we can't spend doesn't address the root issue.
Yes,
we should pay people back for forcing them out of work. Stay-at-home
orders are clearly a government "taking," which under the 5th Amendment
requires "just compensation" from Washington. But a "temporary" and
universal $3 trillion stipend is, I fear, less of a way to get America
through the crisis, and more of an underhanded way for Progressives to
sell America on a permanent and universal basic income.
The
answer to the second question is simple: The money either comes from
our kids, grandkids, great-grandkids, great-great-grandkids ad
infinitum, or it comes out of our savings and future spending power via
inflation. Or a combination of both.
Years ago, the New York State Consumer Protection Board looked into Lesko's promises
of "Free Money to Pay Your Bills," and found them wanting, to say the
least. They said his ads were "peppered with exaggerations and
half-truths" about a supposed $350 billion-dollar-a-year windfall
Americans were entitled to but were somehow missing out on without
Lesko's books or $20-a-month web services. The Emergency Money for the
People Act is something similar: "Free" money that won't accomplish what
it promises, and is anything but free.
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