Mark Cuban hasn’t been shy about voicing his ideas to get our country back on the road to recovery. His latest proposal is that the government issue debit cards to US households to help businesses by boosting consumer spending. The caveat to Cuban’s plan is that the debit cards have a “use it or lose it” feature.
“… I think we need to do a debit card program where we give money literally to each household and make it ‘use it or lose it,' whether it's $1,000, or $1,200, or whatever that number is, every couple of weeks and say, ‘You have X number of days to use this debit card, or you lose the money that's been deposited on there.’”
Cuban came up with the plan. As he said, “we've got to get to a scenario where consumers have enough confidence to go out there and spend money… the primary reality is no business can survive without sales. And two-thirds of the economy is consumer-generated demand.”
Without an increase in business, many businesses can’t afford to re-hire their employees. Even if they could, some are receiving more money from their unemployment benefits than they are from working.
Cuban says his plan is a “perfectly timed stimulus program” and “…by doing that, and timing it right, that's going to create demand for these companies so they can afford to bring their employees back after they're off of all that unemployment CARES enhancement.”
The CARES Act became law in March. It added an extra $600 weekly payment on top of the amount someone receives under state law. Those additional benefits will end in July unless the government extends it.
Cuban has also proposed that the government start a federally-guaranteed jobs program. He said these should give people “confidence in their jobs” and help start the rehiring process.
“We're going to have to have a transitional, not permanent transitional federal jobs program,” he said. He also included jobs like the ones created during the pandemic to track and treat COVID-19 patients.
“And so we're going to need to hire people, millions of people, you know, preferably for testing, tracing, tracking, supporting vulnerable populations, long-term care, you know, giving people jobs that they know, are stable, because that gives them the impetus to spend money,” Cuban added.
While Cuban’s plan would absolutely boost consumer spending, Scott Baker, an associate professor of finance at the Kellogg School of Management at Northwestern University says it won’t help every industry.
“Some industries you won't be able to stimulate this way,” said Baker. He also said that the plan cant help the tourism industry. He said this because, even with extra money in their pockets, Americans aren’t travelling.
Baker also says that during economic uncertainty, most Americans will delay durable goods purchases, like electronics, appliances and vehicles.
Cuban, who has become more vocal about his ideas to help the country recover from the coronavirus pandemic, also hasn’t officially ruled out a 2020 presidential run.
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