Jeff Webb: Congress should OK a one-time $3,000 cash payment to every American
A personal liquidity crisis is imminent, and the most effective way to address it is to get cash directly into the hands of every American as soon as possible.
I propose that Congress pass the Temporary Income Replacement Act of 2020, which would authorize direct cash payments of $3,000 to each and every American as soon as the checks can get in the mail. With 330 million Americans, that adds up to $1 trillion.
That’s a lot of money.
Giving the money directly to individuals in direct payments is the smartest way for the federal government to immediately pump liquidity into the economy. Leaving decisions as to how it will be spent in the hands of those who receive it will maximize the efficiency of its use.
The country has not faced a crisis like this in modern history. This is not a crisis of our financial system, like 2008, but of the entire working economy and our society as a whole. We cannot afford to play small ball. It’s $1 trillion pumped into our economy immediately and with no bureaucratic red tape, no means testing and none of the normal attendant political corruption.
Let it rip now.
My proposal is vastly superior to the alternative we witnessed in 2009, with the virtually useless near $1 trillion ($833 billion) stimulus package passed into law during the first months of the Obama administration. That “shovel ready” package resulted in lining the pockets of special interest groups and had little impact on the economy.
Fox News reported Tuesday that an idea similar to my proposal is apparently under consideration by the Trump administration. But that plan likely won’t get checks in the mail until mid-April, and, since its estimated monthly cost is $200 billion, it seems only to be aimed at 200 million Americans; not the entire population.
When the pandemic subsides, the economy will come roaring back. Until then, millions of Americans face the real possibility of unemployment with no cash in the bank to handle the normal expenses of everyday life. It is not their fault. Their loss of income is the direct result of the decisions by the federal and state governments to shut almost everything down for two weeks, perhaps two months, until the pandemic’s end is in sight. These actions of government have directly caused their loss of income, so it is right and proper for government to compensate them for the loss.
The idea of cash payments to every American on a temporary basis to address this coming liquidity crisis was first suggested by columnist John Carney just four days ago. He recommended that every individual in the country receive $1,000 per month in direct payments from the federal government “for the duration of the crisis.” Wrote Mr. Carney: “I propose $1,000 of cash for every U.S. citizen. A family of four gets $4000 per month for the duration of the crisis. Bigger families get more. This boost of income will allow Americans to build emergency savings without having to drastically cut down on their spending.”
This will not stop all the job losses, but it will make them less painful. More importantly, it will make it far less likely that we go from stage one to stage two. It will make it more likely that the economic emergency can be contained to frontline effects.
Mr. Carney’s proposal of $1,000 per month for the duration, however long that might be, is a good one. I am arguing that if we are going to do it, let’s do it when it has maximum impact, when the personal liquidity crisis will be at its worst. My guess is that will happen within the next 30 days. A check for $12,000 to a household of four received by April 15 will be far more effective at keeping that family afloat than will three checks of $4,000 each, received on April 15, May 15 and June 15.
Former 2020 Democratic presidential candidate Andrew Yang (and subsequently current 2020 Democratic presidential candidate Tulsi Gabbard) floated the idea of permanent Universal Basic Income in their presidential campaigns, and though Mr. Carney’s proposal would be temporary, it is a truncated version of Mr. Yang’s original idea.
Ideologically, many Republicans and conservatives have difficulty accepting the idea of a permanent Universal Basic Income. So do I. This is not that. Mr. Yang’s proposal is permanent and designed for ordinary times. My proposal is temporary and designed for a crisis. We are in a crisis.
The key here is to identify the government policy that will have the maximum immediate impact on economic activity. The immediate benefits to personal liquidity of my proposal — direct Temporary Income Replacement cash payments to every American of $3,000 — are obvious.
To be clear, I am not suggesting that people should be looking toward the government as the solution to their economic problems as a matter of permanent policy. Desperate times call for desperate measures. That line isn’t original, but it certainly is appropriate in this moment.