Trump’s cash handout plan may take longer than expected
US President Donald Trump has pledged to give every adult American a US$1,000 check as part of efforts to stimulate economic growth. The plan, to benefit over 250 million citizens, would be the biggest cash handout in human history.
It’s widely known that Americans don’t save, and many of them even borrow money to pay bills.
A survey by First National Bank of Omaha last year showed that up to 63 percent of Americans didn’t have savings plans, and 23 percent had no savings at all. According to a survey on consumer finances by the Federal Reserve Board, 39 percent of Americans admitted they couldn't afford an emergency bill of US$400.
As the coronavirus outbreak has dealt a heavy blow to the US economy, a large number of Americans, including part-time workers and the self-employed, will have trouble paying rent and utility bills or even buying meals.
That being the case, Trump has promised to send the US$1,000 checks to beneficiaries within two weeks.
But that’s easier said than done. The Hong Kong government, despite its reputation for high efficiency, took around a year to distribute HK$4,000 to low-income residents last year, and that program hasn’t been completely finished yet.
Trump might have underestimated the administrative work, and that could thwart his bid for a second term.
The United States has a population of 330 million. Distributing the cash to 250 million citizens would mean way more work than what Hong Kong, a city of over 7 million people, did.
Besides, the US has no experience in such large-scale cash handouts.
In 2009, the Obama administration sent a US$250 check to every adult on Social Security, Veterans Administration, Railroad Retirement and Supplemental Security Income benefit programs. All the beneficiaries were registered in the public social welfare system, which helped the government to save considerable time in distributing the money.
Let’s wait and see if Trump gets some support from the country's technology giants. If not, it would be almost mission impossible to send those checks within two weeks.
This article appeared in the Hong Kong Economic Journal on March 19
Translation by Julie Zhu
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