Yesterday, Republican Senator Mitt Romney floated an idea popularized by former Democratic presidential candidate Andrew Yang.
The Utah senator proposed a one-time $1,000 cash payment to every American adult. In a statement he reportedly said:
“Every American adult should immediately receive $1,000 to help ensure families and workers can meet their short-term obligations and increase spending in the economy.”
Romney said that Congress took similar action in past recent recessions and that the targeted aid bill working through the Senate may need to deliver cash soon enough. The price tag for taxpayers would be an estimated $350 billion or about 1.7 percent of GDP.
White House economic advisor Larry Kudlow reportedly would not rule out the idea.
Andrew Yang gave Romney’s plan a thumbs up on social media tweeting:
@AndrewYang: Mitt understands this crisis’ potential impact on the economy and what is at stake.
Senator Romney doesn’t go as far as Yang who campaigned on a monthly $1,000 check to every adult. For Romney this is prompted by the emergency that the coronavirus presents.
It is exactly in moments of emergency or crisis that we need our lawmakers to be measured and cautious.
I’m sure many people might want a $1,000 check from the government. However, does every adult need it?
For example, should salaried workers who have not been laid off (nor face layoff risks), can work from home, will have no disruption to their incomes, and can pay their mortgages/rent and other bills receive $1,000 from the government right now? If they can’t go out and spend it because their local bars, restaurants, and salons are closed, how effective will the stimulatory effect be in the short-run?
It could help workers who have been or are likely to be affected by coronavirus-related closures. As the Wall Street Journal chronicled, low-wage workers especially those in service and hospitality industries from nail salon technicians to hair stylists to bartenders and servers are feeling the squeeze of fewer customers, cancelled events, sit-down dining restrictions, and city-wide curfews.
Even gig economy jobs such as ridesharing, which were a bright spot in the economy before the coronavirus outbreak, have seen riders slow to crawl as they battle taxicabs for fewer fares as business travellers have stopped traveling and white-collar workers are working from home.
Increasingly, policymakers are recognizing that these workers need temporary help. As I blogged yesterday, an aid package passed by the House of Representatives is working its way through the Senate. It includes unemployment, paid sick leave, and expansion of nutrition aid programs and Medicaid.
Targeted aid is the key. Helping those who truly need it is the purpose of our social safety net. $1,000 to every adult is not targeted.
The desire of lawmakers to do something doesn’t mean we should just do anything.
Also, government is not the only source of help in times of challenge. Individuals, private companies, and charities are stepping up to feed and take care of those who face hardship.
We are in this together and will get through this together. (Share stories of people helping people during the coronavirus here.)