Whodathunkit? Cash giveaways are ‘insanely popular,’ Cook County learned. So, let’s do more! – Wirepoints

By: Mark Glennon*

A money-for-nothing program turned out to be “insanely popular” so the program size was quadrupled and the plan is to expand it.

Cook County Board President Toni Preckwinkle is so proud of her no-questions-asked cash handouts that she went national with an astounding op-ed this week in The Hill titled, “The insanely popular idea that’s taking off in Illinois and across the country.”

“People didn’t need another complicated program with limitations and eligibility requirements…. I am proud that I can say we gave our residents cash,” she wrote. “The program was such a success that we quadrupled the funding…. With the money from the American Rescue Plan Act, we want to give even more.”

The flood of assistance programs during the pandemic, it’s widely thought, is a pilot for some form of guaranteed income or UBI – universal basic income – money for nothing. Preckwinkle’s op-ed is an example of that thinking. “Evidence is pouring in across the country that direct cash policies work,” she wrote. She’s counting on the federal government to provide the cash. “We now have a unique opportunity to build on the national momentum to alleviate poverty by providing direct cash assistance.”

Cook County’s program is called COVID-19 Recovery Resident Cash Assistance. It’s closed for now because it ran out of money but Preckwinkle is hoping that it and others will renew and expand with federal help. Under the program, Cook County sent cash payments of $600 directly to suburban Cook County residents earning less specified income limits – $54,300 a year for a family of three. Those limits did not include other forms of assistance such as housing programs, unemployment benefits or food stamps. There was no requirement for work or seeking work.

As you would expect from an initiative like this, the program contains some other things that make no sense. For example, program materials say its designed for those who experienced financial hardships due to the COVID-19 pandemic. But eligibility is based on income before March 1, 2020 – before the pandemic.

So, if you were getting along before the pandemic but thrown into poverty because of it, you are were out of luck. And if you had things rough before the pandemic but got on your feet since, you would still get your cash.

And the program was open to undocumented aliens as well as citizens.

Let me be clear: I’m all for safety net programs and help for anybody thrown into poverty through no fault of their own, whether before or after the pandemic. But help must be rationally designed. Simply turning parts of the population into government dependents, no-strings-attached, is madness. Assistance programs should be tied to incentives and configured to avoid “welfare cliffs.” That means programs should not be piled on in a manner that makes them more sensible to keep by avoiding earned income.

Instead, the federal government, since the pandemic started, has doled out 7.7 times more money than the grand total of lost wages and salaries caused by the pandemic. That’s according to a former Director of the U.S. Office of Management and Budget. It’s being pumped out in a list of new programs so long that it would be very difficult to compile.

Where’s all this free cash coming from? In part, from the Federal Reserve Bank.

Think for a moment about what that cash source is doing: Yesterday, Federal Reserve Bank Chairman Jerome Powell said current national fiscal policy is “unsustainable.” However, that policy will be continued, he said, until the economy reaches full employment. But that fiscal policy is paying people not to work by funding programs like Cook County’s!

Doesn’t anybody see a problem with that?

*Mark Glennon is founder of Wirepoints.