I see nobody here, or in congress, pays 1 thought to the homeless.
I was homeless, as a disabled veteran when the pandemic hit. This eviction moratorium has not helped, & has instead hurt our homeless population. The stimulus, or relief money, has helped, but it's paltry.
How kind of you to attribute a poorly constructed study intentionally studying the wrong population to make an unwarranted conclusion to a good faith mistake. I'm also sure that the newspaper owned by the world's richest person using that paper to brow beat congress was also just a little oopsie. Or we could just be honest and admit that there is broad bipartisan agreement in congress and in elite circles all over this country in favor of murdering as many poor people as humanly possible.
Thanks very much for this. I think you are very kind to the authors of the study. It is unconscionable that such apparently distinguished economists don’t bother with even basic error bars and confidence intervals in their analysis. Either they are genuinely sloppy researchers and the field does not judge them by regular standards, or this this is a propaganda piece, meant to peddle an agenda. People are hurting badly in this pandemic and it is cruel to be so miserly about relief, especially when one does not see similar high profile writings when larger tax giveaways to rich people are passed in Congress.
Thank you very much for this! As an interested lay-person (I'm an economist, but very much neither a macro-economist nor an empirical economist) I've been trying to follow this debate on twitter, but it was very confusing. You lay out your argument very clearly here and overall (and especially with regard to your disagreement with Chetty) you are very convincing.
The post also cleared up one thing that I did not understand from twitter and on which I now have a follow-up question. You clarify here the distinction between "stimulus" and "relief" and you argue (correctly, insofar as I can judge) that these checks are both. But, perhaps, what others hammering on the distinction mean is that the checks can only be justified on the grounds of being relief, not stimulus.
It seems like Corona is something like an actual technology shock, unlike the 2001 or 2008. People being forced to work from home etc. has reduced the productive capability of the economy. So perhaps there can be a reduction in output without that indicating an output gap. If I understand correctly, stimulus is only needed to overcome an output gap.
You seem to take it as given that stimulus is a valid justification for checks right now and that may well be an obvious point to those in the know. I would appreciate if you could explain why you think that (or, if I misconstrued your views, that you could correct me).
(P.s. It is difficult to convey tone in writing. I hope it is clear that I am asking a genuine question.)
Thank you for all your excellent research, knowledge and posting to help us make better policy. This may be academic to most economists but it's hugely important to so many families.
Who is and is not likely to spend the relief check maybe roughly calculated with need, but need should be the criterion. however well or poorly it can be measured. To be more precise, the need of those with incomes >50K-75K< relative to who will pay the taxes to pay the interest on the marginally borrowed money. The more confident we are that we will be able to increase the progressiveness of the tax system, the more relaxed we can be about the higher eligibility.
This was really good! I'd like to add that even if Chetty et al are right and higher income people are going to save, that's okay! There's only a limited number of things people can spend on right now given that there's a pandemic and it's incredibly cold in much of the country. When enough people get vaccinated, I'd reckon that those higher income people will start spending like crazy on travel, dining, etc. If the goal is to get the economy back on track as soon as possible, it seems like we should have everything locked and loaded to be able to do so.
For people who need relief, it's relief, rent is paid, food is purchased. A not small part of people who need relief are people who made good money in 2019 but have been wiped out by pandemic. That alone should back us off of hyper concerns about targeting
For people less in need, it will be saved or used to pay down debt. That then increases their likely to spend more over next few months, year, or two, just when we need it to keep pulling economy out of its deep hole. Other things like infrastructure bill will take even longer to kick in, so I feel UI and some of checks for most hurt kick in now, other poorly targeted checks kick in later, and govt spending kicks in even later.
And to those worried we are spending too much and overheating, isn't fact that people who don't need "checks" it will save pay debt and not spend it immediately, a good thing?
Seems non-targeted checks allows individuals to smooth spending needed to fix economy, those who need it will spend it, those who don't will wait to spend when it seems they can get value from it.
I see nobody here, or in congress, pays 1 thought to the homeless.
I was homeless, as a disabled veteran when the pandemic hit. This eviction moratorium has not helped, & has instead hurt our homeless population. The stimulus, or relief money, has helped, but it's paltry.
None of you give me a bit of hope.
How kind of you to attribute a poorly constructed study intentionally studying the wrong population to make an unwarranted conclusion to a good faith mistake. I'm also sure that the newspaper owned by the world's richest person using that paper to brow beat congress was also just a little oopsie. Or we could just be honest and admit that there is broad bipartisan agreement in congress and in elite circles all over this country in favor of murdering as many poor people as humanly possible.
Thanks very much for this. I think you are very kind to the authors of the study. It is unconscionable that such apparently distinguished economists don’t bother with even basic error bars and confidence intervals in their analysis. Either they are genuinely sloppy researchers and the field does not judge them by regular standards, or this this is a propaganda piece, meant to peddle an agenda. People are hurting badly in this pandemic and it is cruel to be so miserly about relief, especially when one does not see similar high profile writings when larger tax giveaways to rich people are passed in Congress.
Thank you very much for this! As an interested lay-person (I'm an economist, but very much neither a macro-economist nor an empirical economist) I've been trying to follow this debate on twitter, but it was very confusing. You lay out your argument very clearly here and overall (and especially with regard to your disagreement with Chetty) you are very convincing.
The post also cleared up one thing that I did not understand from twitter and on which I now have a follow-up question. You clarify here the distinction between "stimulus" and "relief" and you argue (correctly, insofar as I can judge) that these checks are both. But, perhaps, what others hammering on the distinction mean is that the checks can only be justified on the grounds of being relief, not stimulus.
It seems like Corona is something like an actual technology shock, unlike the 2001 or 2008. People being forced to work from home etc. has reduced the productive capability of the economy. So perhaps there can be a reduction in output without that indicating an output gap. If I understand correctly, stimulus is only needed to overcome an output gap.
You seem to take it as given that stimulus is a valid justification for checks right now and that may well be an obvious point to those in the know. I would appreciate if you could explain why you think that (or, if I misconstrued your views, that you could correct me).
(P.s. It is difficult to convey tone in writing. I hope it is clear that I am asking a genuine question.)
I was hoping for a livelier debate. :)
I’ll answer on here tomorrow. Week’s been super busy.
Thank you for all your excellent research, knowledge and posting to help us make better policy. This may be academic to most economists but it's hugely important to so many families.
Who is and is not likely to spend the relief check maybe roughly calculated with need, but need should be the criterion. however well or poorly it can be measured. To be more precise, the need of those with incomes >50K-75K< relative to who will pay the taxes to pay the interest on the marginally borrowed money. The more confident we are that we will be able to increase the progressiveness of the tax system, the more relaxed we can be about the higher eligibility.
This was really good! I'd like to add that even if Chetty et al are right and higher income people are going to save, that's okay! There's only a limited number of things people can spend on right now given that there's a pandemic and it's incredibly cold in much of the country. When enough people get vaccinated, I'd reckon that those higher income people will start spending like crazy on travel, dining, etc. If the goal is to get the economy back on track as soon as possible, it seems like we should have everything locked and loaded to be able to do so.
This.
For people who need relief, it's relief, rent is paid, food is purchased. A not small part of people who need relief are people who made good money in 2019 but have been wiped out by pandemic. That alone should back us off of hyper concerns about targeting
For people less in need, it will be saved or used to pay down debt. That then increases their likely to spend more over next few months, year, or two, just when we need it to keep pulling economy out of its deep hole. Other things like infrastructure bill will take even longer to kick in, so I feel UI and some of checks for most hurt kick in now, other poorly targeted checks kick in later, and govt spending kicks in even later.
And to those worried we are spending too much and overheating, isn't fact that people who don't need "checks" it will save pay debt and not spend it immediately, a good thing?
Seems non-targeted checks allows individuals to smooth spending needed to fix economy, those who need it will spend it, those who don't will wait to spend when it seems they can get value from it.
I thought this was a great read and a salve to the breathless reporting on a one-page non-reviewed study.
- a recovering econ student