Here's a fresh idea: $2,000 debit card for all taxpapers

[susu369]

A Way To Revive Spending

By Dan Newman
Saturday, February 7, 2009; A13

Last weekend, I stood outside the shuttered doors of a favorite local restaurant. As a small-business owner myself, I can only imagine how hard it was for those people to hang that out-of-business sign. I can also imagine the owners of that business sharing my opinion on what America needs most, and that surely isn't tax cuts.

You wouldn't know that from disputes in the Senate this week, where debate hinged on further tax breaks, despite their bulk. At $275 billion, tax cuts from the House bill were already twice the size of any spending project, and now the Senate has suggested $104 billion more. To keep the package closer to the requested $800 billion, several eleventh-hour compromises required reduced infrastructure spending, but not one suggested scaling back tax cuts. Indeed, Sen. John McCain's alternative demanded still more breaks for business.

-snip-

The rebate checks of last year aimed to provide just that, but most Americans saved the money or used it to pay down debt. Less than 20 percent went to bolster consumer spending. There's little reason to expect more from the proposed $1,000-per-household tax cut in the current stimulus bill.

A reduction in sales tax has still bigger problems. In 2001, there was a Senate proposal to reimburse states for lost income, but the legislation collapsed while lawmakers were trying to gain cooperation from each state legislature.

A better choice would be something Americans are likely to spend, and without huge logistical headaches: a gift card. By sending every taxpayer a $2,000 debit card, the government stimulates spending directly. The card doesn't get deposited with a bank, a step that greatly reduced the use of last year's rebate checks for new spending, and with a defined expiration time, perhaps a year, the program could help precisely while other programs get underway.

Full story:
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/06/AR2009020603195.html

Sounds good to me!

[Idealism]

1. It does nothing to fix the underlying problem of shitty wages and not enough good jobs

We've been through this, the Bush rebate checks didn't stimulate shit compared to other means of economic growth

[sandnsea]

2. People need jobs

So they can pay their bills so they can qualify for loans and mortgages again.

$2,000 isn't enough.

[proud2BlibKansan]

9. Amen

Jobs, not rebates or debate cards.

How difficult is this to figure out?

[sandnsea]

13. We've maxed out our credit

I was at an event yesterday and some economist said people need to start buying again. Then someone else said we need to fix credit and mortgages, and the state legislator agreed. It's like they still don't get that if people have to live off their paychecks, they can't buy anything. We need better paying jobs to fix this in the long run.

[grasswire]

3. why just taxpayers?

How about just citizens? Plenty of people are toooo pooor to be paying taxes these days, but would spend down $2000 in a heartbeat on food, medicine, shoes, etc.

Seniors, people on disability, unemployed .... they are so needy that they don't make the taxpayer rolls.

[susu369]

7. That's a good point

[tabbycat31]

15. how about everyone under a certian income

say 75K for a joint tax return, 50K for single.

That way the people who will spend the money get the money.

[bobbolink]

25. Thank you. I finally want an ANSWER to why "progressives" can't seem to remember the rest of us!!

C'mon.. it's time for some self-examination... look deep inside and ASK why "progressives" ignore those of us who you CLAIM you care about... and want our votes!!

'Fess up--what gives here?

[earth mom]

51. Quit dissing progressives! I'm really getting sick of your attitude.

I'm sorry for your situation but that does not give you license to slam all of us who actually give a damn!

[Lucinda]

4. I like it as a companion measure.

And i could really, really use it.

[dkf]

5. All you have to do to make people spend it is put an expiration date.

That way it can't be saved.

[susu369]

6. That is mentioned in the article

[Donnachaidh]

17. so they go to a check cashing agency and pull the cash out

People who are desperate for any sort of back up cash aren't going to go to Disneyland on 2 grand. They'll sock it away.

[proud2BlibKansan]

8. No

Won't work. Dubya's rebate plan - exhibit #1.

[susu369]

12. This is entirely different

if you have not read the article in full, please do.

This is not a solution to cure all the problems with one fell swoop, including unemployment, but it is one part of a plan.

[proud2BlibKansan]

16. People need jobs, not debit cards.

[Juche]

10. Its better than a cash rebate

People will just save that. But if it is a debit card what is to stop people from getting cash back or a cash advance on it? How did EBT solve those problems?

On another note alot of gift certificates that are handed out are never even used. I don't know if the same would happen with this idea.

[ddeclue]

11. Useless unless you could exclude their use on foreign made products...

Such cards at the very least should NOT be redeemable in Walmart, Target, CVS, Sam's Club, etc. where 95% of the merchandise is made in China by slave labor and very very little is made in the USA by union labor.

:argh:

[RC]

14. How hard would it be to put that money in a savings account?

Except for monthly bills, I'm paid up and pretty much have everything I need... or want.

Lao Tzu - "Give a Man a Fish, Feed Him For a Day. Teach a Man to Fish, Feed Him For a Lifetime"

I agree, this country need jobs a lot worse than tax cuts, rebates and government debt cards.

[Telly Savalas]

21. You use the card to deal with monthly living expenses

then take your own cash that otherwise would have been used to deal with such expenses and put that in the savings account.

The cards would have almost the same effect on spending as a check in the mail would.

We don't need government issued debit cards. Increasing consumer spending is a pretty straight-forward issue:

1. Create more jobs so folks have more to spend
2. Target assistance/tax cuts and credits towards the folks most likely to spend the money: those with lower incomes. This isn't even a matter of social justice. It's basic economics. The lower the income the higher the marginal propensity to spend versus save.

[anonymous171]

18. People will just hoard it. They need jobs, not money.

[Donnachaidh]

19. More tossing of coins for *the mob*

That's insulting, considering how much they gave away to banks. Equally insulting to think this will *shut up* those folks who don't want coins tossed from a limo, they want JOBS.

When do the unemployed and poor get the BAIL OUT equal to the banks? You know, the one where we can re-do our offices for 1.2 million? Where is OUR *Benz Money*?

Keep insulting the working class with this nonsense.

[yodoobo]

35. As insults go

Being insulted by having money thrown at you isn't so bad.

[Donnachaidh]

42. so a few bucks is okay, when you aren't working?

The government hopes everyone has that same attitude, while they pump billions into the banks.

[yodoobo]

44. Well I'd rather have a job

but a few bucks might buy dinner.

Don't make the mistake of thinking that I'm happy with the situation. Just saying that when you are struggling to eat, even pocket change helps.

[shraby]

20. In order to spend, people need an assurance of

money every week, not just a one time splash in the pan. If they don't have that, they won't spend what they do have, and a debit card just doesn't cut the mustard. They need an ongoing source of income so they can pay their bills, buy food, buy gas and if any is left, but a "want".

[ComtesseDeSpair]

22. So, exactly how...

would a debit card stimulate spending? I know I would apply the entire card to my huge credit card debt. I wouldn't buy a thing.

[lsewpershad]

23. Stop the nonsense

Time for the NUCLEAR option

[bobbolink]

24. Why are you ALWAYS leaving out the most hurt by this????

What do you have against elderly retired people, disabled people?

I finally want an answer to this.... WHY DO YOU IGNORE US??????????

Why is it ONLY ABOUT YOU?

[OPERATIONMINDCRIME]

40. You're Projecting Again.

"Why is it ONLY ABOUT YOU?"

[pnwmom]

26. This idea would work no better than the Rethug tax cut idea.

The money wouldn't be spent on the infrastructure, but spent haphazardly in ways that might not improve our economy's health at all.

[leftstreet]

27. Hell, why not make it $20,000, or better yet $200,000

Aside from giving the econ numbers a mild bump, this would do nothing in the longterm.

[.... callchet ....]

32. Give free food.

Then the poor would have money to spend. Chances are that not many wealthy would get in line for free food. Still there would be some in line.

[kentuck]

28. It would be a good start.

Then they could change the average work week to 35 hours, with all time above that at overtime wages.

[noamnety]

29. No.

I don't understand the purpose of this at all.

I don't want the government in effect charging me (or my grandkids) $2,000 in taxes to force me to spend $2,000 on shit I don't need.

Once that money is spent, most will go to corporate profits and shareholders. The people who need the money are the ones at the bottom, not those at the top. Why should I have to go buy shit so 80% of that $2,000 goes to the people who don't need it? This is a scam to build corporate profits with that trickle down BS so some tiny percent of it goes to those who are in need.

Why can't we just give the money to the people who need it, without justifying some corporate crap to skim profits off it in the process? Frankly, I'd rather just give my entire $2,000 to someone who can't find a job, can't work because of medical issues, or is working at subliving wages. Or option B: pay someone who needs a job and can work the entire $2,000 to do something that benefits the community. Pay them to shovel snow for people that can't do it, pay them to grow crops that are given to food banks, something like that where the money goes directly to the folks that need it.

The whole Reagan-mindset of giving money to corporations because eventually it will trickle down to the poor is bullshit.

[jmowreader]

30. Why would it have to be shit you don't need?

Spend $2000 on canned goods and tires.

I don't think it's that bad of an idea.

[noamnety]

31. I don't need canned goods or tires.

I believe you missed the larger point, which is that this trickle down bullshit moves taxpayer dollars from the pockets of people who need the money into the pockets of corporations - with the so-called payoff being that some money will trickle back into our own pockets.

Not a sustainable model for anything except continuing to shift money from the poor to the rich.

The $2,000 we would "have" to spend - it's coming from our pockets, not just appearing from thin air.

[Greyhound]

36. I don't understand your objection, you would have the choice of where it went.

Don't spend it on corporate crap and none of it goes to the corporations.
:shrug:

[noamnety]

47. Apparently not.

My choice would be to put it in savings for when I actually NEED it.

Actually, my choice would be a progressive system of taxes, instead of everyone getting 2,000 of what - let's face it - is our own damn money to begin with.

Beats me why we all saw that kind of "stimulus" plan of borrowing money we don't have for exactly what it was when Bush did it, but now we look at the same exact thing and act like it's some genius idea.

The concept defies logic, it's a pyramid scheme. Why would anyone here support that?

[Greyhound]

52. I'm not saying this is the best plan I've seen, but it is the opposite of what

the reich-wing has been doing for 30 years. Currency injected into the economy at the bottom will stimulate the entire economy, that's a basic principle of economics and the engine of the multiplier effect.

If the money is in the form of a debit card, there's no forcing you to spend it on anything at all, that's what I don't understand about your objection. There is no doubt that we are in dire need of significant stimulation and virtually all the money put into something like this will get working in the economy at large, unlike the trickle down BS.

[noamnety]

56. I'm not following the logic at all.

How is anything stimulated by taking 2,000 out of my bank account and giving it back to me in the form of a debit card? Either I am forced to spend it on shit I wouldn't have otherwise bought (not acceptable), or I spend it on shit I would have had to buy otherwise (no stimulation effect).

[Greyhound]

57. That two grand never hit your bank account, it was taken from you before

you were paid and is in the hands of the corporate welfare/MIC, who will spend it on shit that will do nobody any good. So why not give it back to you first and you choose where to spend it, or not?

[yodoobo]

33. I would still bank the $2,000. The debit card trick notwithstanding.

Just buy food with it and then bank the money I would have spent at the grocery.

Possibly I might buy a couple kuggerands.

[Baikonour]

34. $2,000 isn't going to pay my mortgage.

And I have no reason to go and blow 2 grand on crap I don't need.

[W_HAMILTON]

37. But, that would be the whole point...

...to get you to spend, to stimulate the economy, which in turns (hopefully) causes businesses to prosper again, which will cause them to employ people again, etc.

I've actually thought about this sort of idea. I didn't think much about it, though, because I figured you could only give someone a check, and they would simply save it, or use it to pay bills, etc. Things that wouldn't exactly stimulate the future economy.

A debit card would work, assuming you could only use it to shop, and couldn't use it to simply withdraw the funds to pay old bills, or withdraw the funds and put them in your savings account, etc.

I would probably prefer something like this rather than some of the other stimulus ideas. I'm in favor of giving people the money directly, rather than throwing billions of dollars at banks to get them to lend, only to find out they are just hoarding the extra money anyway.

But if you thought the socialism word was thrown around a lot before, I can't imagine what they'd say about this :)

[MadHound]

38. This would be another stupid band aid trick, we need a real solution

Provide real jobs, and getting paid real wages. Update our infrastructure, invest in education, do so long term thinking.

All this would be is a band aid, one that we would ultimately wind up paying for, with interest.

[DanNewman]

39. A Way to Revive Spending

Despite the high tensions here, there are good questions raised about my column in the Washington Post. Here are answers to many:

>the Bush rebate checks didn't stimulate shit compared to other means of economic growth
>figured you could only give someone a check, and they would simply save it, or use it to pay bills, etc. Things that wouldn't exactly stimulate the future economy.

That's exactly right: rebate checks were saved at too high a rate to help boost the economy. The American Gift Card can do better, as it can be used directly, without sitting first in a bank. It's the difference between having a bowl of chips on your counter instead of having one stashed at the back of the top shelf.




>We need better paying jobs to fix this in the long run.
> Jobs, not rebates or debate cards.

We do need jobs, and the gift card is meant to help us get there, during the months job programs take to get underway.




>Such cards at the very least should NOT be redeemable... where 95% of the merchandise is made in China

I believe in helping Americans first, and I understand this concern.

But despite the huge number of products made in China, well over 80% of dollars are spent on domestic goods and services. Even without restrictions on the card, it really will help Americans.



>I don't want the government in effect charging me (or my grandkids) $2,000 in taxes to force me to spend $2,000 on shit I don't need..
>The $2,000 we would "have" to spend

You can keep it and save it if you wish, at no cost. $2,000 goes to you then back to the government a few years later. Even the interest goes to you and back. It does nothing in such a case, but also costs nothing.

In the event you choose to spend it, it can help anyone working at the places you like best. No one in the government will choose which those are, not for this program at least. You will.




>Equally insulting to think this will *shut up* those folks who don't want coins tossed from a limo, they want JOBS.

I mean no insults to anyone, and I desperately understand the need for jobs. Since small-businesses, and everyone working in them, need customer demand, short-term relief will help while larger jobs programs begin. Job-creation programs, better healthcare, and infrastructure improvements can take months to get underway, and if we do nothing faster, we're going to see more jobs lost in the meantime.




>I'd rather just give my entire $2,000 to someone who can't find a job, can't work because of medical issues, or is working at subliving wages.
>What do you have against elderly retired people, disabled people?

Those having the hardest time need help the most. Please do read my column, which suggests this approach instead of the currently proposed tax cuts that give to those who need it least.

The gift card isn't meant to replace expanded unemployment benefits, or healthcare, or job creation. We still need all of them.

But when your house is on fire, there are things to do even before installing sprinklers. The 600,000 jobs lost last month represent only one sixth of the the total losses since the start of the recession. We need relief now, while all other plans take root.

The $2,000 gift card isn't meant to be a full solution. But it's a strong tool we can put in the hands of every American, right now, this week.

http://callaspade.blogspot.com/

[wickerwoman]

41. I have nothing to spend $2000 on.

Without a job, I can't move out of my parents' place. I don't need more shit and I don't have anywhere to put it. I need to save so I can go back to college. If I wasn't allowed to put the $2000 in savings, it would sit totally unused until I got a job, saved another $13,000 and could put it towards tuition.

This is just more tax rebate BS which hasn't been working for eight years. The only difference here is that the debit card is completely geared towards mindless consumption, encouraging the habits that got us into this mess in the first place.

[noamnety]

48. Someone here actually GETS it!!!

Thank you!

[baldguy]

43. Individuals making less than $50k/yr shouldn't be paying any federal income tax

You pay state income tax, local sales tax, property tax - YOU'RE ALREADY DOING YOUR FUCKING PART TO CONTRIBUTE TO THE ECONOMY!

[Thothmes]

53. Disagree

I make less that $50,000. Why should I not accept some of the burden of financing the Federal Government.

[NeedleCast]

45. Does anyone understand inflation anymore?

If you dump a huge pile of money into the system, goods and services just become more expensive.

Everyone who suggests that we give huge chunks of cash to consumer or cut taxes to boost the economy should be kicked in the face.

[lukasahero]

46. Doesn't anyone remember the "give a man a fish..." proverb anymore?

This 'throwing money' at people doesn't help them and it doesn't help the economy. Build a man a shelter, give a woman a job, teach a kid a skill - these things help the people and the economy.

[951-Riverside]

49. Heres a better idea

Make it very hard for companies to operate within the US unless they hire US workers for call center jobs, manufacturing, etc. Globalization helped put us in this position.

You just can't keep throwing money at this problem. BTW, $2,000 will barely pay for 2 months rent.

[TexasObserver]

50. No. Not a solution.

That is like giving a starving person a huge buffet they can eat all they want, all day for three days. Two weeks later, they're starving again.

We need JOBS. Only JOBS do any good.

Tax cuts are gimmicks. Cash to all is a gimmick.

The people who need money the most are not taxpayers. They're unemployed or underemployed.

[doc03]

54. If I take the $2000 and buy a Chinese TV

how will that help the US economy?

[DanNewman]

55. You need an Oxygen Mask before Surgery

- 'Everyone who suggests that we give huge chunks of cash to consumer or cut taxes to boost the economy should be kicked in the face.'

That hasn't happened to me yet, but given the tone of the posts in the DU, I'm getting a hockey mask before going outside.


Readers here did see that my column suggests the $2000 prepaid card in place of $275 billion of corporate and other tax breaks, yes? That it's a supplement to, and not a replacement of, job-creating infrastructure programs and expanded unemployment coverage?

The current stimulus package has nothing in it for short-term stimulus other than tax cuts. Yes, we need the job creation programs, too, and I'm not suggesting we replace those. But since they're expected to take 18 months to get fully underway, some immediate relief is essential.



- 'if you have not read the article in full, please do.
This is not a solution to cure all the problems with one fell swoop, including unemployment, but it is one part of a plan.'

That's exactly right. It's one part, the missing part that can be put in place this very month.


- 'Plenty of people are toooo pooor to be paying taxes these days, but would spend down $2000 in a heartbeat on food, medicine, shoes, etc.
- 'Individuals making less than $50k/yr shouldn't be paying any federal income tax'

Yes, and they'd get the card, too. I'm sorry if the term 'taxpayer' was misleading. Anyone who has filed with the IRS, even without payment due, is included in the tally of 170 million taxpayers. That includes the vast majority of unemployed and most seniors, all of whom already have addresses on file to receive the card.

We could make it for every American, but there would be endless debate about what to do over children and people without postal addresses. If you think the program wouldn't get bogged down by such an expansion, that's a fair suggestion to make.




- 'But if you thought the socialism word was thrown around a lot before, I can't imagine what they'd say about this'

That's what I thought, before coming to this forum! But as earth mom points out,
('Quit dissing progressives! ...I'm sorry for your situation but that does not give you license to slam all of us who actually give a damn!')

apparently no one hates liberals like other liberals with different agendas.

Conservatives, however, must love such infighting as much as, say, more corporate tax cuts.



- 'This 'throwing money' at people doesn't help them and it doesn't help the economy. Build a man a shelter, give a woman a job, teach a kid a skill - these things help the people and the economy'

One of my old friends in Portland is a carpenter who just lost his a remodeling job. The house owner ran a children's clothing store that has recently closed, after eight years, as a result of the slowing economy. Those employees are also out of work.

My friend doesn't need to be taught a skill. He has one. I bet he'd take work on a state project once it got underway, but until then, I know he hopes none of his other clients lose so much business that they, too, cut him loose.




Once again: the American Gift Card doesn't replace job creation programs, but it does provide a swift supplement that is far more useful than the proposed tax cuts of the same cost.

[noamnety]

58. I'm not a fan of kicking people in the face.

But I understand the anger behind whoever said that.

You are trying to put a bandaid on an issue that can't be solved with a bandaid - and in addition to that, your bandaid itself is faulty. So that's two problems.

Someone else in this thread pointed out that they'd still save the 2,000 and it wouldn't stimulate the economy any differently than the bush rebates. If you give someone who isn't a spender 2,000 on a debit card, they will use that for groceries and gas, and the money they would have spent on that stuff goes to the bank instead. They've still saved 2,000, not spent an extra 2,000. All you've done is created an extra pile of red tape and skimmed profits off the system to pay whoever is managing the debit card fiasco (presumably some bank who gets a nice contract for handling our money that we didn't want their help with in the first place).

Even if it DID function as a stimulus, though, you blatantly ignore the larger more critical problem in our economy, which is that it is based on an unsustainable model of consumption. Consuming more, manufacturing more, uses up more resources that end up in landfills, which requires us to get yet more resources - and fuel - from foreign sources (if not now, eventually), which requires maintaining military power over those countries, which is a perpetual drain on the environment and a money pit that will keep pushing us further into debt. Until you can wrap your head around the necessity of sustainable living rather than consumerism being the way out of this, your "solutions" will be worthless. We don't need "more dinners out" as your article suggests. We need more dinners grown in our backyard.