House Dems incentivize staying home, call for $2k monthly payments to Americans who earn less than $130k

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Peter George Morici, an American economist and retired Professor Emeritus of International Business at the R.H. Smith School of Business at the University of Maryland, College Park, says that the Democrats’ proposal to pay out monthly stipends to only lower-income Americans is nothing but a voter turnout scheme.

Democrats love all this mechanical stuff so they can target voters,” he said during an appearance Wednesday morning on Fox News’ “Fox & Friends First.”

I think what they really ought to do is be honest and say, ‘If you’re a Democrat, raise a hand and we’ll give you $1,000 a month,’ because that’s what they seem to be up to here. I mean, let’s face it. And they also would include a mail-in voter card.”

The remarks were made during a discussion about a fiscally unfeasible proposal by the Democrats to dole out a stipend of up to $2,000 to single Americans who earn less than $130,000 and $4,000 to families that earn less than $260,000.

It’s the income requirements that has Morici convinced it’s nothing but a scam.

Listen to the full discussion below (disable your adblocker if the video doesn’t appear):

Asked specifically about the $2000/month proposal, Morici drew the hosts’ attention back to the $1,200 stimulus payment passed by Congress and argued that the Democrat-crafted income eligibility requirements ($75,000 and $150,000) were BS.

“We need to give households money, and we need do it quickly — and not through some sort of means testing like the Democrats like,” he said. “Just give folks money if you’re going to give them money, and let the progressive income tax sort out who gets more and who gets less.”

However, he added, “it might be better to just give businesses some cash and say, ‘We’ll give you $1000/employee every month til the crisis ends.’ Then you’re rewarding the creation of jobs.”

Something similar is actually already happening thanks to the Paycheck Protection Program, but Democrats managed to screw it up as well by implementing unemployment payments that are so high that workers don’t want to return to their jobs anymore. And to make matters worse, Democrats want to extend the payments.

One of the victims of these exorbitant unemployment payments is Washington State business owner Jamie Black-Lewis of the Oasis Medspa & Salon in Woodinville and Amai Day Spa in Bothell.

In an interview with CNBC late last month, she said her employees lashed out angrily at her after she obtained a PPP loan because they were already making more money being unemployed.

A Democrat-crafted provision written into the CARES Act added “a flat $600 a week to the typical weekly benefits paid by one’s state,” CNBC reported. “Those traditional benefits, which vary widely between states, replaced about 40% of one’s prior wages.”

“The measure’s improved $600-a-week payments, which run through July, aim to boost that wage replacement rate to 100% for the average worker. But some, especially lower-wage workers, can come out ahead.”

And that’s exactly what happened in Black-Lewis’s case, just as congressional Republicans had repeatedly warned would happen.

“We have a virus and we know people can’t work for a variety of reasons,” Sen. Rick Scott said in March. “We got to help them, but at the moment we go back to work, we cannot create an incentive not to work. We cannot be paying people more money on unemployment than they get paid in their job.”

“[W]e cannot encourage people to make more in unemployment than in employment,” Sen. Tim Scott added. “This legislation would not stop at 100 percent of your income. This legislation would allow people to make more in unemployment than in employment.”

Morici agrees.

“The present system rewards you for not working,” he continued Wednesday. “The trouble with all this means testing is it’s based on your 2018 tax returns. There are a lot of people used to make $2,000 a year in New York City who are on the street and broke. They won’t get a nickel of help until they file their taxes near year in April of 2021.”

Of course, he further noted, the best solution may just be to reopen everything.

“There is a case to be made that after some point, the cure is worse than the disease,” he said. “We’ve had 30 million people already file for unemployment insurance. … The hard reality is that a lot of the jobs now being destroyed won’t be replaced when the economy rebounds, and we’re headed for a very long process of recovery after a brief bounce.”

“So the longer we are shut down, the tougher this is going to be, and the bigger the pit that we’re going to have to climb out of. We’re likely going to surpass the level of unemployment that was ‘accomplished’ in 1973. The pit of the Great Depression was 24.8.”

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Vivek Saxena

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