Oh, the trouble with thresholds. Whether we’re talking tax brackets, or in this case, stimulus checks. It remains to be seen how (or if) things will actually play out with all the various proposals for a “second round” of stimulus in the face of the COVID-19 pandemic, but however unlikely it may be to come to actual fruition, we just had to call out this particular proposal as described by Alison King for NBC10 News in Boston as an example of how “glossing over” the math can lead to, well, “confusing” outcomes…
NBC10 Boston: Markey Joins Sanders and Harris to Call for Plan to Provide Americans With Monthly Income During Crisis
“The Monthly Economic Support Act would provide $2,000 each month to people earning $120,000 or less annually.”
So, let’s do the math. $2,000/month over 12 months would be equal to $24,000/year. An extra $24k/year in your pocket? Not bad! Except, we noticed it would kinda stink for you if you happen to find yourself already in the income bracket between $121k-$143k.
The easy answer for some, at quick glance, would be to say “you’re really complaining about people who already make a six-figure income? They’ll be just fine!! They’re already “rich”!!! (we can debate the definition of “rich” another day…)
Clearly, there were a few “Twitter Users” who missed the point right out of the gate…
You know who would benefit? Old women on Social Security of $1,000 a month. Fuck your $121k-$143k annually.— Lu (@politimilla) May 18, 2020
You’re really complaining for making too much money?— . (@rothantik) May 13, 2020
Hold up. You’re upset about someone getting $2k a month, who is currently making nothing, because those who are making $10k a month won’t get an additional 20%? And this doesn’t sound greedy to you?— 🎃 🏳️🌈QueerWolf🏳️🌈🐾Werewolf? At Home Wolf! (@Lycanthropology) May 18, 2020
I’ll play a tiny violin for them that I can’t afford to buy after making $30k last year.— CEB (@caitlinmcqulity) May 19, 2020
OK, we get it, it would only “stink” in very relative terms, sure, and for that reason, if you’re already at $144k+ then even we’ll suggest you should probably just be happy you’re already there.
In the particular scenario described here, the $120k salary guy nets out with $144k on the year, while the $121k salary guy nets out with – well, $121k. Maybe the second guy should have asked for a $1k pay cut first? (or at least a few more weeks vacation). Silliness.
It’s a fair enough point – no one making that much money should really be “complaining” either way, at least not yet (we’ll see where inflation takes us…) But the point is, thresholds are dangerous because they’re completely arbitrary. And when things are completely arbitrary (or worse, opportunistically targeted at well-connected friends in the case of Wall Street bailouts, or just as opportunistically targeted at impressionable would-be voters of certain political leanings in the case of “stimulus checks for the people”), there’s bound to be #moralhazard somewhere. At the least, we’re once again playing “god” with the very definition of value – and it’s not like you had a say, either way.
Sure, maybe we’re over-emphasizing the plight of the $121k salary guy who ends up with $23k less at the end of the year than his $120k salaried counterpart, because someone (his employer?) had valued his work $1k higher before all the “stimulus” talk started (or maybe he was just a better salary negotiator – and ha, isn’t payback just a bitch for him now…)
The main point here is – we don’t like when people mess with the rules in the middle of the game. The laws of math never actually change, but if we’re going to leverage those laws to help apply the concept of value in human society, we ought to be more careful about how we try to manipulate them.
Full-on #UBI – or the idea of Universal Basic Income that’s been tried in places like Finland and enthusiastically touted by the #YangGang in recent months and years – would actually be more fair if fairness is the goal. No artificial thresholds. Scale from the bottom up. Everyone gets the $2,000 check. Purely progressive. Those with the least need it the most, and therefore each citizen would experience a net-impact that’s consistently proportionate to his.her current economic standing – from the guy who manages to scrounge together $500 a month panhandling on the streets and would stand to see his fortunes rise by 400%, to the one already pulling in a cool million each month (we’re not sure how he’s doing it) and will see his fortunes rise by just a measly 0.2%. The beauty – no flawed human being had to decide where the “thresholds” were. We let the math speak for itself…
And one would think that “letting the math speak for itself” would be a solution that even modern liberals and libertarians can agree on – while perhaps continuing to debate whether the preferred implementation of said solution is via bottom-up inflation (i.e. #UBI) or programmable sound money (i.e. #Bitcoin, #Ethereum) or maybe some weird combination of the two we haven’t entirely thought of yet…
We have quoted “Tweets” from select “Twitter Users” in this story because we thought the views & opinions expressed by those “Twitter Users” were relevant to the topics being discussed in this story. These “Twitter Users” have no affiliation with the Economorals blog, and we make no assumptions about any particular political, religious, or other affiliations of any kind that may or may not be held by any of the “Twitter Users” quoted, nor the specific validity or credibility of what they say. Again, we just thought a few “Twitter Users” had some genuinely interesting words & ideas to share in the context of this story’s main themes, and since they’ve already shared those words & ideas in the public domain, we wanted to share them again here too. Because if there’s one “market” we can all hopefully agree on, it’s the “marketplace of ideas”.