Now that the governments of the world are woken up to the emergency at hand and finally telling their citizens to stay home, it’s time to focus on how to ensure those citizens stay fed for the coming months.
So far, the plans out of Washington DC are not the right answer. Paid sick leave, yes. Payroll taxes and airline bailouts, no.
Payroll taxes only work if there are payrolls being paid. Bars and restaurants are closed. All retailers but supermarkets and drug stores are about to follow. With that, there is no need for advertising, marketing, or for that matter, accountants and bookkeepers. So far the massive layoffs have not started, but millions will have no paycheck in two months, so a payroll tax is as useful as cuff links for a vest.
The airline industry is a nice, simple model of most of the economy. Except for freight, the whole airline industry is no longer needed, and won’t be for months. Every pilot, flight attendant, check-in clerk, baggage handler, mechanic and so on has no job. Their only job is to stay home and stay healthy.
Meanwhile Covid-19 does not infect the actual airplanes. They can be mothballed and will be just fine 3, 6, 9, or 12 months from now when they are needed. The same with the bar stools and restaurant tables and accountants’ pencils. They’ll all still exist to pick up where they left off when life returns to normal someday.
The only way a bailout of the airline industry helps their workers is if no one gets laid off, everyone continues to get paid, and as such, everyone can pay for food and medicine. If we bailout the airlines, we need to bailout every company in every industry that gets shut down.
Why no skip the bailout and just help the workers? The people?!
We have a system for this. It’s called Social Security. When you are too old to work or unable to work due to a disability, you get a monthly check. Over 50 million Americans get monthly checks from Social Security.
Covid-19 is our shared, national disability. Most Americans are not now, nor soon will be, able to work. Thus my suggestion is that we use Social Security to provide a sufficient monthly payment to ensure every American can eat and buy their typical medicines.
$500 per month until the lock downs end and the economy can restart.
Specifically, I suggest everyone with a Social Security Number who isn’t already receiving a check from Social Security be sent $500 per month, regardless of past contributions, tax returns, etc.
18% of Americans already received a check, so this is only needed for 82%. 82% of 320 million people = 262 million x $500 = $131 billion per month. If that lasts for six months, the total bill is $787 billion.
That is a lot of money, but it is less than we spent bailing out the banks in the Panic of 2007-2008. It is less than the Fed put aside to shore up the money market in the current market panic. It’s a fraction of the losses on Wall Street this month. It’s not every half of the costs incurred from the tax breaks put into effect least.
$500 per SSN it is by far the most cost efficient way to ensure that all 320 million Americans make it through the coming months without worrying about how they are going to eat.