Also maybe the issue is the sad state of low-income jobs, and the lack of hazard pay continuing to encourage people to risk their lives. Again, risk their lives, because the pandemic is NOT over. "Come back for low pay, no medical benefits and be at serious risk of dying or being maimed yourself, or infecting a loved one." It's kinda gross that is not considered the real moral hazard here.
Why do you ask? I was just making (what should be) an uncontroversial point that there's a bound at all, because someone was dismissing all concerns of affordability of any program on the grounds that:
>>>Federal spending doesn't come from money laying around, in the first place, it comes from money the government decides to have because it wants to spend it.
i.e. trivializing those concerns the federal government can (in several senses) print money. So why the extreme scrutiny and demand for rigor? Is it that bad to concede this very minor point? Remember, it allows that we could have plenty of slack to cover situations like this, just that you can't totally dismiss the concern because of a complex variant of "lol money printer go brr".
>Also maybe the issue is the sad state of low-income jobs, and the lack of hazard pay continuing to encourage people to risk their lives.
I think I addressed that:
>>And, to be sure, that may be the desired outcome, that people stay away from work while receiving some income, so as to mitigate the epidemic risk, while preserving financial security. That's a fair argument to make.
But either way, we shouldn't be creating situations in a position where working more reduces your net pay.
What's so controversial here?
And again, it sounds like you're agreeing with the point that I'm making. We can disagree about when it will be a problem, but you can't just trivialize the very idea of any mitigation effort being unaffordable because "we just print the money anyway, so affordability is meaningless", as the original comment was effectively arguing.
That said, given our current economy, inflation is not a concern. If you are concerned about real resources, such as human lives, then that is basically what we're exchanging right now for hypothetical inflation prevention at some unknown point in the future. We have a very real physical threat now versus a potential economic threat in the future. How many lives are worth preventing a few fractional percentage points of inflation?
Also the economy running without restriction right now greatly inflates medical costs, and overwhelms real medical resources. We're kind of in a catch-22, as the medical system cannot keep up in areas that try to fully open the economy, and that just aggravates losses of "real resources"(human lives). The economy is hitting medical limits before inflation is anywhere near a concern.
Affordability and inflation is murky. Even how we measure inflation is iffy. Cost of living varies greatly by region. There are subsidies obfuscating the real cost of goods. Tons of money has been spent on worse things. It just seems penny pinching always comes out when it comes to social programs that help those with the least to gain, and most to lose from the situation.
Somebody dismissed the very idea of there being limitations to our ability to pay for stimulus, yes, which was why I originally entered the thread to address this excessive dismissal:
>>or assuming that our government has enough money lying around to pay everyone this much all of the time
>Federal spending doesn't come from money laying around, in the first place, it comes from money the government decides to have because it wants to spend it.
I said so at the time, and all the other times I referred back to that claim when you asked. Sorry, but I think I'm past the point of diminishing marginal returns here.
Also may this finally dispel the myth that servers get made whole with tips. This owner is putting out the numbers, 2400/month is 15/hr, the servers would be making 50%/66% of that so 7.50 to 10 an hour. Minimum wage is $11 in maryland.
It applies to the entire time someone could be doing other SIP-compatible work.
Pretty much every businesses was offering some kind of SIP compatible role (delivery, remote communication, and socially distanced adaptations). New positions are created and destroyed every day in response to demand. That's how economies work. You can't possibly justify a claim of five businesses.
>Moral hazard exists everywhere, especially for people who have known the word longer than 6 months.
And if it were so obvious, we wouldn't have people being ridiculed for pointing it out early on, or being surprised today at the result of the incentive structure.
"I can't get my employees to come back because that would mean they would be making less money. I can't envision any solution to this problem"
If an employer wants employees to risk their lives as the quarantine lifts and the second wave continues to spread, they need to offer more money.
It means their pay would have to be some $600 over and above the regular amounted needed to compensate for the inconvenience and utility of work. So they're effectively "taxed" at over 100%. At that point, it's not the employer's fault for not offering enough.
At the very least, they could just make it so that unemployment (i.e. same logic as behind the UBI -- have social benefits, but don't [significantly] contract them as you work more).
I don't get it -- you're talking like the concern was dubious, even as we see that prediction came exactly true.[2] And yes, not seeking re-employment, or not asking to return to work is an option; see all the stories about employers being unable to get employees to return to work because they'd take an income cut [1].
And, to be sure, that may be the desired outcome, that people stay away from work while receiving some income, so as to mitigate the epidemic risk, while preserving financial security. That's a fair argument to make. But the moral hazard concern was 100% correct, that it would layer on an extreme disincentive to work that overcorrects well beyond the incentives we might actually want.
>Federal spending doesn't come from money laying around, in the first place, it comes from money the government decides to have because it wants to spend it. Even if you buy into the mythology of the fisc, marginal spending comes out of borrowing at, typically, very low interest rates (currently, IIRC, at negative real interest rates),
It's true that the federal government can borrow on favorable terms and so it's probably prudent to borrow now for epidemic mitigation -- especially at negative nominal rates! -- but that doesn't make it "myth" that the federal government is not some infinite pot of real resources that will be able to indefinitely cover these expenses; eventually they have to hit a wall. We can debate where that point will be, but it's not mythical.
[1] https://www.newsweek.com/baltimore-restaurant-owner-cant-get...
[2] Even on HN, it was like pulling teeth just to suggest this was a real effect to worry about; see this thread where I tried to point out the effect: https://news.ycombinator.com/item?id=22640082