In the 1984 movie Ghostbusters, the fictional mayor of New York City is only spurred into action when Bill Murray’s character suggests it would “save the lives of millions of registered voters”.
The same can be said for Trump’s plan, which was actually the idea of former Democratic presidential candidate Andrew Yang, when it became apparent that he could no longer run on a platform of bragging about a strong economy.
In what can only be called an election year ploy, Trump is using to Coronavirus pandemic to roll out a plan to offer voters up to $2000 each. While that may seem magnanimous, it will only be a matter of time before you see this in his re-election ads.
But Senate Republicans, in their near $1 trillion economic relief package created this week, would provide checks of $1,200 per adult for many families, and those filing jointly would get up to $2,400 for the adults. Those earning more than $75,000 would get less.
That plan was to be negotiated with Democrats before a hoped-for vote in the Senate next week.
The idea is that by giving Americans cash it will somehow spur spending and jump start the economy once again. Trump sees the average American going on a spending spree with their new-found wealth, which will revive once struggling businesses and result in the swiftest economic turnaround in history.
Why it won’t work:
The Coronavirus pandemic has caused millions of people to work from home, if they are even able to work at all. In convincing Republican senators to support the Coronavirus relief bill, Treasury Secretary Steve Mnuchin predicted that the unemployment rate could hit 20%, a level not seen since the Great Depression. This spurred senators into action, but the still falling stock market was less assured that this was the right answer.
While most Americans will indeed appreciate this $2000 windfall, they are also fearful of being able to pay their bills. So, instead of spending, they are more likely to make their mortgage or car payments, or if they can, save that money in case even worse times are ahead. That will hardly “jump start” the economy.
Also, many stores are reducing hours, or closing altogether to adhere to the social distancing guidelines this administration has finally embraced as a measure to slow the spread of this illness. With less places to spend, the likelihood of using their cash to help the economy declines.
Of course, there is always on-line shopping, but in these uncertain times, it’s unlikely people will be in the mood to spend on anything but the essentials.
Another proposal from the White House is a payroll tax cut, but with millions of Americans likely to be out of work for an extended period of time, the number of people who could actually benefit from this becomes less and less every day as more restrictions are placed on businesses, which is why there is a switch to the Yang plan. At this writing, the payroll tax idea has received a cool reception on Capitol Hill, however.
Yes, there will be those who will fall for Trump’s hype, especially his rabid base. In the end they will be left with nothing but a shiny trinket purchased with their government “bounty”.
Or, perhaps they will just buy more MAGA hats.