Political Roundtable Part XXIX

[Zonkerbl]

They're way ahead of me:

"because the credit would be refundable, it would even go to lower-income families who don’t pay taxes, in the form of a periodic payment from the government."

https://www.washingtonpost.com/opinions/the-child-tax-credit-is-a-conservative-dream-fulfilled-lets-help-make-it-permanent/2021/03/11/db349bd0-82a5-11eb-81db-b02f0398f49a_story.html

[Zonkerbl]

Curious what zonk and eventually the data will show about the effectiveness
of giving people money or cutting taxes. Based on comments above I’d guess
he thinks the Andrew Yang approach (UBI), well as a one time payment, it’s not
really UBI, but it’s money directly to the broadest possible swath of Americans.

The pubs, first argued for a smaller and more tax cut centered response to
the Great Recession, then didn’t vote for it, then demagogued when the
results fell short of what was hoped for, except the pubs weren’t really hoping
for that, but it was hyper bad faith the way the GOP acted in 2009. Now the
bad faith is gonna be claiming they were for it when the opposite is true.

And the data will show whether money to everyone or tax cuts which help
high earners more than average people works better as a stimulus.

You're asking several different questions here.

1) Is giving people cash more efficient than in-kind aid?

Absolutely, there is a ton of evidence of this in the development literature. Some people need clothes. Some people need food. Some people need medicine. It's racist to refuse to give poor people cash because you're afraid they'll use it on drugs, or even worse, buy their family steaks to celebrate a birthday. Shame on you (I'm thinking of my big sister the Doctor in particular)

2) Is a UBI a good idea? Is it better than conditional cash transfers, where you only give it to people who can prove they're poor (in low income countries they just target poor communities and hand out cash to everyone there)

UBI works best in countries where the informal labor market is very small, as again it relies on people paying income taxes to keep track of who to send checks to. Implementing UBI in a low income country with a large informal sector is a terrible idea.

3) Is giving out huge amounts of cash during a recession a better idea than giving people big tax breaks?

Both ideas are kind of meh. It relies on neokeynesian ideas of slackness during recessions, which was true during the great recession but may not be as true today, this is more of a natural disaster situation. If all you're concerned about is getting businesses investing again, all you have to do is tell them "this year your tax bill will go down" and the response will be immediate, household response may take a little longer as many people won't know they're getting a check until it arrives in the mail. Even so the investment response from the private sector will still be more or less immediate. So it's six of one and half a dozen of the other as far as investment stimulus goes.

Tax breaks are extremely regressive, with most of the money going to the extremely wealthy if you're not careful (and the GOP didn't care). Stimulus checks targeted at people with low incomes may be a better way to get money to the people who need it in certain contexts.

But the whole idea that the economy will be stimulated by handing out checks/tax breaks to everybody is extremely oversold. So called "multipliers" only happen while the economy is slack and their effects dissipate over time. Investing in infrastructure is a much better way to increase long run growth, and the beneficial effect will actually grow over time. But it's hard to sign a $5 trillion infrastructure bill after having recently handed out $2 trillion in tax breaks and $2 trillion in checks with your govt debt to GDP ratio rising to 100%. Maybe if the GOP would stop trashing the economy every time they're in power we wouldn't constantly be in crisis mode and we could have a rational discussion about it.

[I_Like_Dirt]

Curious what zonk and eventually the data will show about the effectiveness
of giving people money or cutting taxes. Based on comments above I’d guess
he thinks the Andrew Yang approach (UBI), well as a one time payment, it’s not
really UBI, but it’s money directly to the broadest possible swath of Americans.

The pubs, first argued for a smaller and more tax cut centered response to
the Great Recession, then didn’t vote for it, then demagogued when the
results fell short of what was hoped for, except the pubs weren’t really hoping
for that, but it was hyper bad faith the way the GOP acted in 2009. Now the
bad faith is gonna be claiming they were for it when the opposite is true.

And the data will show whether money to everyone or tax cuts which help
high earners more than average people works better as a stimulus.

You're asking several different questions here.

1) Is giving people cash more efficient than in-kind aid?

Absolutely, there is a ton of evidence of this in the development literature. Some people need clothes. Some people need food. Some people need medicine. It's racist to refuse to give poor people cash because you're afraid they'll use it on drugs, or even worse, buy their family steaks to celebrate a birthday. Shame on you (I'm thinking of my big sister the Doctor in particular)

2) Is a UBI a good idea? Is it better than conditional cash transfers, where you only give it to people who can prove they're poor (in low income countries they just target poor communities and hand out cash to everyone there)

UBI works best in countries where the informal labor market is very small, as again it relies on people paying income taxes to keep track of who to send checks to. Implementing UBI in a low income country with a large informal sector is a terrible idea.

3) Is giving out huge amounts of cash during a recession a better idea than giving people big tax breaks?

Both ideas are kind of meh. It relies on neokeynesian ideas of slackness during recessions, which was true during the great recession but may not be as true today, this is more of a natural disaster situation. If all you're concerned about is getting businesses investing again, all you have to do is tell them "this year your tax bill will go down" and the response will be immediate, household response may take a little longer as many people won't know they're getting a check until it arrives in the mail. Even so the investment response from the private sector will still be more or less immediate. So it's six of one and half a dozen of the other as far as investment stimulus goes.

Tax breaks are extremely regressive, with most of the money going to the extremely wealthy if you're not careful (and the GOP didn't care). Stimulus checks targeted at people with low incomes may be a better way to get money to the people who need it in certain contexts.

But the whole idea that the economy will be stimulated by handing out checks/tax breaks to everybody is extremely oversold. So called "multipliers" only happen while the economy is slack and their effects dissipate over time. Investing in infrastructure is a much better way to increase long run growth, and the beneficial effect will actually grow over time. But it's hard to sign a $5 trillion infrastructure bill after having recently handed out $2 trillion in tax breaks and $2 trillion in checks with your govt debt to GDP ratio rising to 100%. Maybe if the GOP would stop trashing the economy every time they're in power we wouldn't constantly be in crisis mode and we could have a rational discussion about it.

It's a tough discussion. I'd suggest we have enough information now to suggest that trying to constantly put out fires is a losing battle over time. Take a page out of the R book and make tangible changes people can see and experience and then see if the Rs will actually tackle the debt they claim to care about but really don't. Any attempt to do so suddenly comes with much more real world consequences in undoing what the Ds establish and that will come with political costs if they do it right. It's why Obamacare, for all its flaws, made it through the Trump regime

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[Zonkerbl]

The whole Republican vs. Democrat "montague vs. capulet" silliness is extremely harmful. Rs say "government - bad!" Ds say "spending - good!"

Stupid government - bad! Strategic spending - good! If only we could get America to listen to three words instead of two.

[Ruzious]

The whole Republican vs. Democrat "montague vs. capulet" silliness is extremely harmful. Rs say "government - bad!" Ds say "spending - good!"

Stupid government - bad! Strategic spending - good! If only we could get America to listen to three words instead of two.

Republicans in the House and Senate don't mind spending so much as long as it's done by states. They were happy to let Trump force states to way over-pay for the national pandemic.

[pancakes3]

they don't mind spending period. fiscal responsibility and preserving federalism is a facile lie they tell their constituents.

[I_Like_Dirt]

The whole Republican vs. Democrat "montague vs. capulet" silliness is extremely harmful. Rs say "government - bad!" Ds say "spending - good!"

Stupid government - bad! Strategic spending - good! If only we could get America to listen to three words instead of two.

Republicans in the House and Senate don't mind spending so much as long as it's done by states. They were happy to let Trump force states to way over-pay for the national pandemic.

They spend plenty and gut finances in general. They just use those words as a cover for wanting to eliminate corporate regulations on all fronts and effectively turning the federal government into a corporate defense branch and nothing more. The more things the Dems achieve that helps people the better they will place themselves long term because the army of Russian bots will ring hollow. And the more Katie Porters the better.

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[verbal8]

So conservative news media wants Biden to kill his dog? Seriously? What kind of monsters are they?

Clearly not pro-Life.

[Wizardspride]

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[Ruzious]

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What a fukin pos. He knows the terrorists consider him one of them - that's why he felt safe. At BEST... he's working in conjunction with the terrorists and helped enable them.

[Pointgod]

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If this **** doesn’t lose in 2022 in a land slide then the people of Wisconsin dip ****

[Pointgod]

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[Zonkerbl]

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Wait... does this mean that Ron Johnson... is RACIST?!?!?

[Wizardspride]

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[Wizardspride]

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[Zonkerbl]

Slap my behind and call me lefty then

[Wizardspride]

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[Pointgod]

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Oooooo I’m sure the US is shaking in their boots. Looks like Kim wants attention again.

[Pointgod]

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I’m sure this will endear her to the Bernie Bros.....

[dckingsfan]

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I’m sure this will endear her to the Bernie Bros.....

Which is weird because Bernie and Biden are working quite well together. Purity test? I just don't get it.