Amid the ongoing debate over the need of another round of stimulus checks, one more voice has come out in support of direct payments. Mark Cuban suggests that every American household should get regular coronavirus stimulus checks for the next two months.
Cuban, the owner of the NBA's Dallas Mavericks, says the government should come out to support Americans "struggling badly" amid the coronavirus pandemic. He said that wealthy families can live without any government help, but there are many who desperately need help.
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“Those without (help) are struggling badly,” Cuban told CNBC. “We need to get them help.”
Thus, Cuban proposes giving $1000 in coronavirus stimulus checks to all American households, without any income threshold. He wants Congress to send stimulus checks every two weeks for the next two months.
The billionaire entrepreneur believes that Americans need the stimulus payment “as much now as we did back then” when the pandemic started.
Cuban, however, suggests putting one limitation on the way people spend their $1000 stimulus checks. This limitation is that families must spend their stimulus money within ten days of receiving it. If they fail to spend the money, then they lose it.
Cuban believes that it doesn’t matter what people are spending their money on as long as it is going into the economy. In the absence of such a limitation, Cuban believes that many people would save the stimulus money.
“People are uncertain about their future, so rather than spending, they save,” he said.
Previous data has revealed that the savings rate has increased since the start of the pandemic. This seems to suggest that many people might have saved the first round of stimulus checks.
Cuban’s use it or lose it approach feasible?
Cuban put forward a similar proposal to give coronavirus stimulus checks in May. “I still believe in doing it the exact same way” now, he said.
Cuban is pushing such a proposal because he believes that boosting demand is the best way to help the economy recover. Once people start to spend, the demand will automatically improve. This will encourage employers to bring back employees or sustain current employees.
Cuban, however, admits that his coronavirus stimulus checks plan could be costly for taxpayers, and there is a risk as well. “But it will allow for demand for non-essential products and services to increase, hopefully keeping most businesses alive,” said Cuban.
Many believe that Cuban’s proposal is good, but it would work better if it were targeted at those most in need. Also, it would face staunch opposition from the Republicans, who are not in favor of an expensive stimulus package. They have long been opposing Democrats’ $2.2 trillion HEROES Act. Earlier this month, Senate Republicans came up with a stimulus package costing about $600 billion.