Question

How far should our government (G) go in order to try to “make whole” the workers losing wage income starting March,2020?  Should our G try to transfer money to these workers? Yes? WHY? How much? A. One quarter of their lost income? B. One third? C. One half? D. ALL OF IT???????? E. Do you see any potential problems with D???? What might they be? 6. Okay. One could argue that D may be a little extreme…. You have to form your own opinion….. IS NOW THE TIME IN OUR COUNTRY’S HISTORY FOR US TO CHANGE OUR CURRENT SYSTEM OF INCOME DISTRIBUTION AND WEALTH DISTRIBUTION? IF SO, just in general terms, what should we do? Why?

Answer 1

In order to try to "make whole" the workers losing wage income starting March, 2020, the Government should try to transfer all of the money (option D) to these workers.

Due to pandemic COVID-19, the daily wage earners have lost their income as factories, productions are shut down all over the world. In the next quarter 35% of the work force is going to lose their jobs. The growth rate will fall down by 1.5%-2%. The economy will be in a prolonged recession, much worsen than the 1930's great depression. To help the economy not to fall in recession, there must be an effective demand in the market and to have an effective demand the purchasing power of the working class people should be rised. Government should go for a direct cash transfer programe to help them out and thereby the economy. If there is not enough money with the government, the government should go for printing money and distributing among the worst affected people. It's not the time to think about higher inflation due to printing money. It's now the time to combat the situation by the effective direct cash transfer programe and thereby stimulating the agreegate demand so that the economy will not fall down in recession.

It's now the high time to change the income and wealth distribution of our country. As we all see, day by day, the reach is becoming more rich and poor is becoming poorer. This shouldn't be the case. The economy should reach the point of equity, the resources of the economy should be distributed in a more equitable manner. COVID-19 teaches us that if the world is hit by such a pandemic again, the poor working class people would be worst affected as they have no savings.Therefore, the government should go for a strong tax policy, taxing reach higher and distributing among poor class to help reach them out of the poverty trap. And at last but not least, the government should increase the savings rate as an developing economy can grow in the long run by increasing the savings rate.