To help Americans affected by the Covid-19 pandemic, self-made billionaire Mark Cuban thinks the government should send checks directly to needy Americans instead of giving extra money to financial aid programs, such as the Supplemental Nutrition Assistance Program, known as SNAP.
‘Write Those Checks’
It is a controversial idea that Cuban – who has also expressed demand for additional payments to encourage all Americans – was first shared on Twitter.
“I think government programs designed to address specific problems are not working properly” rather than direct payments would have worked, Cuban told CNBC He did when asked to clarify his position. “What I really like is that it also happens that we take that money and others to a lot of approved programs and write to those people who are eligible.”
Cuban believes that direct payment “gives people better control of their circumstances and contributes to economic duplication.” “Historically,” she says, “we have a lack of respect for those who are in need. We have made the government a solution to their needs. ”
Is Cuban Right?
According to Cuban, “the same amount [used for financial aid programs] should be given to eligible recipients, as well as incentives, which are paid monthly.”
Many disagree with Cuban, however. According to University of Maryland economist and professor Melissa Kearney, simply posting direct payments and completing aid programs can be dangerous.
Without programs to provide housing, health care, and food, there could be a risk that “too little help [will be provided] for those in need,” Kearney said.
In 2019, these government “safety nets” programs were funded at about 8%, or $ 361 billion, of the state budget, according to the Center on Budget and Policy Priorities. This does not include health insurance or Social Security benefits, but covers SNAP benefits, Additional Security Revenue and other assistance programs.
SNAP in particular is the largest food aid program for low-income Americans, according to the USDA. The average monthly income for each family member was $ 129 in 2019. Between February and May, the number of Americans receiving SNAP benefits increased by 17%, almost three times more than in the previous three months, according to The New York Times. As of July, about 43 million Americans have benefited from SNAP benefits.
Do Direct Payments Suffice?
Cuban claims that the first round of incentive payments “has shown that this [direct pay] approach works,” but Kearney disagrees. Because previous checks were for one-time benefits only, they could not be used as proof that ongoing payments would work, he said.
Additionally, Kearney argues that there are a number of reasons why government programs may be more effective than direct payments.
First, some people may have difficulty deciding how best to use the money they earn. “They can end up in adequate health care, housing or food,” Kearney said.
Certain programs can also help children, who often do not have a say in how the income is spent, by making sure that resources go directly to food, housing, or other basic necessities.
Second, benefit programs can help protect recipients from things beyond their control, such as changes in the real estate market. “In some cases, a person will not be able to afford decent housing, health care or child care in the private market, even if they have money on hand,” Kearney said. “In such cases, a government subsidy or a subsidy may be very helpful.”
However, parts of the Cuban mentality offer potential benefits. A combination of government programs and direct payments can help. “Providing too much or too little financial assistance to low-income people and families can reduce the need for material possessions and can definitely reduce stress levels, which will have real benefits in terms of mental health and parenting,” Kearney said.
And it can be difficult for those who need to navigate through the requirements and procedures for applying for government programs, especially if “a particular personal need does not fall within the scope of the program,” Kearney said.
What About Stimulus Talks?
This is not the first time Cuba has expressed views on additional coronavirus assistance to help Americans in distress.
In September, he submitted his proposal: He believes all American homes, no matter how old they are, should receive a $ 1,000 check every two weeks for the next two months. The check will need to be processed within 10 days, or families will lose money.
So far, it is unclear whether the new coronavirus aid law will pass before the new year, as negotiations remain strained after the provision of military inspections, debt protection and state and domestic aid have sparked tensions between Democrats and Republicans.
“We need [encouragement] as much now as they did back then,” Cuba said at the start of the epidemic. “Those who are [helpless] suffer. We need to help them. ”