Democrats finally have a plan that could help us find a coronavirus 'normal'
- Democrats have a plan to give monthly $2,000 checks to every American over 16 who makes less than $130,000 until unemployment is back to pre-coronavirus levels.
- Finally! A proposal that recognizes that this pandemic is going to significantly depresses economic activity even after we're out of lockdown.
- Thanks to high unemployment, continued social distancing measures and the possibility of sporadic outbreaks, the number of people who will be able to participate fully in the economy until we have a vaccine will be limited.
- This bill will help keep people who can't work because of the virus afloat. And it will give those who can work more cash to put back into the economy.
- This is an opinion column. The thoughts expressed are those of the author.
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Finally, Democrats in the House of Representatives are proposing an economic plan that would help us find some kind of coronavirus "new normal" in America.
Democratic Reps. Tim Ryan of Ohio and Ro Khanna of California have introduced the "Emergency Money for the People Act." It would give a $2,000 check every month to every American 16 and over who makes less $130,000 until unemployment drops back to pre-coronavirus levels. You can watch them talk about it here.
This is a plan that addresses the reality of what the economy, and life in general, will be like after the country comes out of lockdown.
After that happens we will still live in a shrunken world. Social interaction will be limited, so financial transactions will be limited. People will be broke and out of work. Some businesses will have to limit their capacity to keep with social distancing mandates. Other businesses won't be able to exist at all. We will have a demand crisis.
And the virus will still be around. Periodically work places might become contaminated, like we're seeing now at a Smithfield meatpacking plan in South Dakota that just closed.
At some point we may have to go back into quarantine. Singapore had to do it, and so did a county in China. Plus, analysts from the Department of Homeland Security to Morgan Stanley project that the virus could start to spread widely again sometime this fall. The uncertainty will be massive.
Through all this, unless we want to blow a giant hole in the economy, we'll need to keep people current on their bills, and we'll have to keep consumers spending as much as possible. That's about 70% of our economic activity in good times, and we have to keep some of it going if this economy is going to be anything like "normal." In March retail sales dropped a record 8.7%.
It is going to be a slog until we get a vaccine for the virus, and Khanna and Ryan's bill recognizes that.
There's only so much of that we can control in a coronavirus economy.
- We can't add more capacity to places like theaters, casinos, restaurants, athletic stadiums, flights, etc.
- We can't entirely control who's sick and who isn't. We can just try to get as many healthy people participating in the economy as possible, as deeply as possible. That depends on social distancing and testing, testing, testing.
- What we can control is whether or not Americans have any spending power, regardless of whether they're out of work, forced to take a pay cut, or working limited hours. This bill puts more money in their pockets. That's money they can put back into the economy.
This is not an environment where an extra $2,000 in the hands of any American making under $130,000 would be "wasted." The coronavirus has twisted the shape of our economy into an upside down triangle, where a limited number of people have to support the people who cannot earn or spend money as much as before. We need to widen the base of this triangle as much as possible. Not for economic growth, but for economic survival. That's what this bill endeavors to do.
This is an opinion column. The thoughts expressed are those of the author(s).