A 21st Century New Deal

There are a lot of #coronavirus rebate policies floating around. My response considers these policies broadly. The policy we need must have elements that are universal, need-basis, and industry/occupation-targeted. Basically, we need a 21st Century New Deal.

Most of the policies presented are income-based, and the worse are contingent on tax liabilities. The overwhelming majority ignore that need is created both by how consumers actually spend their money and how American workers make their money. Let me explain why such policies ultimately will be inefficient at plugging the gap in the long run. 

Foremost, income-based policies ignore the choking reality of wealth inequality. Assets (e.g., savings, checking accounts) are the primary means people have to cope with financial crises. Yet, a sizeable portion of the American public has little to no savings but this is being completely ignored. 

Moreover, most policies conveniently ignore the outstanding burden of debt liabilities. Even removing student loans (which is class-biased, btw), many households live "in the red", with more debt obligations than either income or capital (i.e., income-generating resources). Consumer debt has fundamentally exacerbated class inequality and is generally not calculated in public policies at all since people largely look at debt pressures as a matter of individual fault. However, when hard decisions have to be made about how to spend the little bit of change one has, consumer debt will be the first cost that will be cut. A one time rebate will not solve this issue at all. 

Some of the worse policies put a threshold on rebates for those with limited tax liabilities. This is so counterintuitive to purported need-based motivations because these conditions target (in the wrong way) the segments of the society that could use the most help. Basing rebates off of tax liability completely ignores the crush that low-income and jobless households will face trying to respond to the crisis. No or low taxes means no or low income and thus cuts a large portion of the most vulnerable in our society. A long-needed solution to stagnation in family incomes, unemployment, and underemployment is up to bat but is completely dodged by income amd tax-centered policies. 

Another ignored issue: There are particular types of workers that are more affected by this huge hit to consumer spending spawned by the Coronavirus Outbreak -- the gig, tip, and artist economies being some of the most notable. Industry- and occupation-specific rebates are the most effective ways to meet the shortages these workers are facing.

Last, there are certain types of workers whose compensation needs to reflect the value they have to society and the risk they take on to meet the needs of society -- namely, caregivers, healthcare workers, employees of nonprofits, and educators. The broader class of occupations these type of workers fit in are referred to as "public contact" positions by some. These are positions that require interface with others. These are people who provide services that are duly needed in a time of crisis like this and that are unduly exposed because of their duty to serve others. Serving others is the fabric of how we will successfully minimize risk at a time when social contact reveals humanity's fundamental vulnerability (and strength). Needs-, income-, and tax-centric solutions cannot quantify the demands and risks posed by serving others, needing social interaction, and protecting the most vulnerable. Moreover, our pay structure going into this period of crisis has largely undervalued these same workers.

Unfortunately, capitalism and neoliberalism will probably win this battle. But, hopefully in the long run, the voting public will see through the charades and demand a new approach to how money flows through our social institutions and our wallets. Until then, I will soothe my anger and despair by daydreaming of a day when the leaders we do elect build infrastructure that protects and invests in the people, so I can stay in the clouds about the kind of society in which I actually want to live.


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