These policies are in line with that, a unequivocal transfer of money from structured hard working families to unstructured broken ones. Removing incentives for the former and adding them for the latter.

It's very easy to destroy social fabric top down, but it can only be created bottom up.

How do you figure?

Notice less government is therefore the answer regardless of why we keep getting these outcomes.

https://www.investopedia.com/articles/economics/08/governmen...

The next one looks like student loans which totals $1.61T nation wide.

The initial Covid packages were warranted, but the packages passed in December 2020 and March 2021 were largely unnecessary after the initial shock had passed and the velocity in the drop in unemployment was already strong. Or they may have been warranted at a much smaller magnitude with more discretion in who received benefits.

The consequence now is that the economy is so overstimulated, we basically have to force the recession we would have had anyway to prevent it from overheating. So we'll end up in the same place, but with a ton of extra debt to service

Since most of that 30% have low income and come from low income backgrounds it will be a struggle to get it passed. A shame as those are the ones that need it the most. It’s interesting to note that Social Security was designed to cover 100% of the population even though only a smaller segment needed it, specifically to make it harder to kill. For student debt that would be an impossible sum and unnecessary.

In case anyone is curious, please note the following excerpt from https://en.wikipedia.org/wiki/Social_Security_Act

> Job categories that were not covered by the act included workers in agricultural labor, domestic service, government employees, and many teachers, nurses, hospital employees, librarians, and social workers. As a result,

> > 65 percent of the African American workforce was excluded from the initial Social Security program (as well as 27 percent of white workers). Many of these workers were covered only later on, when Social Security was expanded in 1950 and then in 1954.

FDR’s racial attitudes (or perhaps rather lack of interest in the issue) is rarely discussed, so thanks for bringing that up as well.

Student debt problems are entirely self-inflicted. Students taking the loans made their own decisions. Social Security users have been paying for decades (not taking, as the student loan recipients were). Social Security users, especially those who have not yet started collecting, have worked decades to get their benefits back.

If students get their loans paid off before Social Security is fixed, it's a certain sign of corruption. (Votes for money.)

Use your votes to make government effective. Vote for politicians that pledge to fix Social Security.

Remember, older folks don't have time to remain in the labor force (unlike younger people, who will benefit from rising paychecks.) At the end of the spectrum, there is only what has been saved (which is reduced by inflation) and pensions, Social Security.

For example another poster recommends free or low-price state schools, instead of handing out mountains of freshly created money. One of those is incredibly inflationary, the other is not.

There is a lot wrong with our education system (including guaranteed infinite loans incentivizing high tuition prices -- a better system would be to just have some state schools be free, and like in Europe, more competitive. They would only be for people who really need them financially and have great potential academically). However, resetting student loans and letting the system continue is definitely NOT the solution.

> It literally hurts no one to forgive the loans

Also want to address this, because I feel like it's a common misconception, especially with Gen Z. It's basically an inflationary policy to forgive debts. So it does hurt anyone who is affected negatively by inflation, while certainly not being "fair" for the reason mentioned above (some responsible adults actually paid their debts and are penalized for that). We all make mistakes (such as taking out massive loans to go to acting school and having it not materialize), but consequences are the side effect of living in a consistent reality. If you make financial reality inconsistent by forgiving loans, you incentivize more of that bad behavior. Also note that most degree holders with student debt are not the lower class, but the middle and upper middle class. Student loan forgiveness is a handout for an educated class of people who are generally doing much better than the poorest in society.

But now that inflation is here and consumer sentiment is close to all time lows, the jig is up.

It's not a black/white situation of choosing between economic collapse or hyperinflation at all. And keep in mind there were 3-4 huge packages passed. It's not like this had to be done as a single rushed magnum opus bill, this is the consequence of many bills and executive actions passed over 2 years, coinciding with a Fed that had unilateral power to ease the brakes yet did nothing for 2 years.

I'm not really that familiar with legislative processes, but this seems ridiculous if it's true. Isn't it the job of the house to write bills? What else do they have to do? Why won't they get another shot?

I think it's just a lack of political will. Not from regular people, but from politicians. People love to point to a huge 1000+ page bill that didn't pass because the guys voted it down and say "oh well we can't have X because the other guys voted against it". If "your guys" are really interested in having X, why don't they just write another bill that contains the minimum language to enact it?

We should really reject these massive "omnibus" bills out of principle. No one even reads them! There's no reason we can't have simple, targeted legislation that is limited to exactly one topic.

There’s nothing wrong with doing that (people sensibly borrow to purchase and use assets all the time). And when people are in the middle of a crisis it’s appropriate to take action (even in a drought the fire brigade sprays water on a fire).

But it’s worth looking retrospectively to figure out how much to do next time, not to be absolutist about it one way or the other.

Perhaps its because I work on the backend side of businesses (specifically the tax part) and so I actually get to see the financial numbers, but I am aware of over ten thousand jobs in SoCal alone that were saved by the PPP bailout.

It's disturbing to see the vaguely sociopath comments on this thread by tech workers who were largely unaffected by COVID complaining about "interfering" with the markets and about "bailouts."

A lot of businesses were hit hard by COVID. For tens of thousands of businesses, the COVID PPP loans were the only source of revenue they had at a time when government restrictions (i.e., the lockdowns) were inhibiting their sources of revenue. (And guys, we were in a pandemic that killed millions worldwide. Even after the lockdowns ended, many people were scared to go out for months.)

And even with the PPP loans, many small businesses didn't survive the lockdowns. Margins are low in many industries. Not everything is tech where you can bumble along without profits or purpose for a decade surviving on fat VC money.

I have done some initial quantitative analysis on the raw survey responses, but not gone further, since you know, daily troubles. The small business situation is deeply changed in the last two years, and this is not over at all.

Agreed. Very Ugolino.

https://pagesix.com/2021/06/28/tayshia-adams-and-more-bachel...

If you had bothered to follow up on that, you would have learned that all of these Bachelor(ette) contestants employed other people and used the PPP loans to pay those salaries during the PPP period when their normal revenue streams were unavailable due to COVID restrictions (Tayisha Adams actually went into detail about how and why she used the loan in the linked article). Which was quite literally the point of the PPP loans.

But I get that critical thinking is hard when you have an ideological point to make and you just want to shit talk other people.

Guess what? A lot of tech companies also took out PPP loans. Former HC darling Mixpanel took PPP loans. As did Bird, and a number of dating apps. (https://www.cnbc.com/2020/07/06/ppp-loans-to-tech-start-ups-...) Are we calling them unscrupulous too?

Much lower income thresholds should have been applied to stimulus checks. Student loan debt should not have been paused for high earners. Interest rates should not have been pegged at 0 while asset bubbles formed over all asset classes.

That's called rational and responsible policy.

Enforcement could have been retroactive to avoid delaying disbursement of funds. It's not hard to write sensible legislation, even under a time crunch.

And hardships come naturally to business all the time. It's not the government's role to save everybody in every situation. Companies that were financially irresponsible or poorly run should naturally fail when economic times get rough.

The road to hell is paved with good intentions. We saved everybody just to end up with massive inflation which will require forcing the economy into recession anyway, defeating the entire purpose and impact of the stimulus.

Make no mistake, unemployment will spike in a big way as the Fed tightens, just as it has essentially every other time they had to tighten to curb inflation.

The aid was right, the magnitude was far overdone. It will be quite obvious to historians, though it's obvious even now.

While I wouldn’t say that the policy as implemented was optimal, I think it’s worth considering the conditions under which it was made.

Each policy like this needs to balance the efficiency of the program with its coverage of those who need help. As an example, giving money to everyone unconditionally would have ensured full coverage, but it might not be very efficient. However, each restriction added to make the aid more targeted risks excluding people who genuinely needed help (reducing coverage) and _also_ increases costs since now the restriction needs to be tested, there needs to be an enforcement apparatus for those who violate it, etc. This is an uncertain calculus.

Then there’s the political reality that policy is not created by a benevolent dictator but instead through compromise among many individual parties, each of which has their own agenda and priorities, some of whom are acting in bad faith. Each decision point leads to more debate (should this group be in or out? should this threshold be X or Y?) and hassle, while in the background there are people suffering right now. After some point, you have to give up and accept the imperfections just to get it done.

Finally, politics being what they are, no matter how effective, helpful, and efficient the program is, the government’s reward for shipping the aid package is that the opposition party will decry it as wasteful and unnecessary. Every flaw will be amplified as part of their overall political messaging, and armchair analysts with the full benefit of hindsight will critique every decision. I can’t imagine that provides great motivation to put a lot of effort into polishing and tweaking the policy into perfection.

All of this is not to say that we shouldn’t strive for better programs and government—we absolutely should—just that it is a tremendously difficult problem.

But I will say on one point (Companies that were financially irresponsible or poorly run should naturally fail when economic times get rough.) These companies ere struggling because the government shut everything nonessential down. The point of the PPP was to make up for that fact that the government, during a global pandemic that killed millions wouldn't let people go to work.

Next time you want to discuss the merits of the PPP, step outside of your tech bubble and think about what COVID was like for all of the non-tech companies whose functions can't be done from home.

Was it an all or nothing situation? No, not at all. So either you're being intentionally misleading, or lack critical thinking. The option in front of politicians wasn't do these bills in this exact form or nothing at all. Why act like it was? It's a false premise.

Is it due to a bias in trying to justify the inflationary result?

And you seem to lack understanding of the consequence of high inflation, which inevitably will be higher unemployment, hurting those you sought to help. Study any history of the relationship between monetary policy, inflation, and unemployment and it's pretty obvious.

Inflation is not a bad thing; in fact, low-to-moderate inflation is desired. High inflation is not because it generally means that base or fixed cost growth (i.e., food and oil) is outpacing productive growth (pretty much everything else).

The option in front of politicians wasn't do these bills in this exact form or nothing at all. Why act like it was? It's a false premise.

No it wasn't, but it was the best package they could put together, and it took months to get that far due to ideologues blocking better/more efficient options.

It's for armchair economists like you to debate the theoretical perfect relief package that they should have passed, in the non-existent fantasy la la land where that would have been possible. Of course, in that fantasy land, COVID wouldn't have happened, and our economy would not have become dependent on JIT inventory.