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Comment by dahfizz | Hacker News Reader

> If all that money instead went to the people/taxpayers they would all have received an $18,000 stimulus check instead of $1,200, I think this would have been the best move possible.

Everyone I know would choose their entire retirement fund over a one time check of $18,000 . I understand your sentiment, and it does feel like we got less that we deserve, but stimulating the stock market was absolutely the right move.

Another depression wouldn't help anyone, and a majority of Americans have a 401k. The idea that only the super rich benefit from a good stock market is plain wrong - most people depend on it.

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> and a majority of Americans have a 401k

Source?

According to the 2017 US Census, only 32% are saving in a 401k. [1]

[1] https://www.fool.com/retirement/2017/06/19/does-the-average-...

Over 70% of workers have access to an employee retirement plan, and 56% of all workers participate in one[1]. So I did misremember the stats slightly. Its all workers instead of all Americans, and a generic "employer sponsored retirement plan" vs specifically a 401k, but my point still stands.

If we exclude children and people who are already retired, only 26% are without retirement savings[2]. The ability of these people to retire is linked to stock performance.

[1] https://www.bls.gov/ncs/ebs/benefits/2019/ownership/civilian...

[2] https://www.federalreserve.gov/publications/2019-economic-we...

Great, now how much does the median retiree have saved?

Also, the vast majority of people shouldn't give two licks about keeping the market high today because the vast majority of people are more than a decade out from retirement. What should have been an event that allowed people to build wealth instead became one to preserve the wealth of those who already have it.

“I’m decades away from retiring, so I’m happy to let these businesses fall apart, destroy trillions in value, and layoff millions of people so I can buy some shares at a cheaper price!”

This is like letting your neighbor’s house burn down because you’ve always wanted to buy the land under it.

This isn't an either let all businesses fail or prop up the entire stock market with cheap cash choice and your framing of it as such is intellectually dishonest.

I didn’t frame it as an either/or. I literally just reframed what you said: that people far away from retirement shouldn’t care if the stock market crashes, because they’ll benefit if it does.

The market making a correction != businesses failing. The market is severely overpriced as-is, it didn't need to be propped up. Companies don't fail because their share price has dropped.

> Great, now how much does the median retiree have saved?

Whatever that number is, it's going to be much smaller after a stock market crash.

It also wipes out the opportunity for future retirees to benefit from market corrections which are historically how most wealth for middle class retirees is built. So you've now sacrificed far more future retirees accounts for those who shouldn't have such high market exposure that they are hurt by a correction.

If this isn't a wake up call that individuals have no business managing their own retirement, I don't know what is.

Not everyone works in a corporate environment where this is offered. Go ask your local restaurant if they offer their employees A 401k.

I put $750 into 401k last year (I was tech ''''contract'''' worker and wasn't being paid well in the first place and ended up with a cool $459 in my 401k at the end of the year and I stopped contributing until 2021. Technically I'm contributing so I'm in that stat, but I've lost money. Yes I know that can happen in 401k's temporarily, but I'm not in a financial place for that to be acceptable. How many people are contributing their minimum 3% in a small paycheck for a 1% match and in the end have an extremely small 401k, but get counted in your statistic? How many earn $10/hr, put 3% in and it ends up being like $22 bi weekly and they only began contributing a year ago? 401k's aren't really a great measurement of much in my opinion. You can't assume everyone has thousands saved up in them and I'd be willing to bet less than 50% of 401k contributors have even more than $5000.

That $18,000 check would have given me the ability to pay off my medical debts immediately, and have complete economic security and peace of mind through COVID.

401k might be a great option to store money if you are in medical debt. Its near impossible to get money out of a 401k if you declare bankruptcy or default on loans

What fraction are retirees who have rolled over their 401k into an IRA?

Excluding children and retired people, 74% have retirement savings.

[1] https://www.federalreserve.gov/publications/2019-economic-we...

If everyone got 18000 a lot of the money we spent on the top half of the economy becomes unnecessary. For example, there will be no evictions and so that sector doesn’t need propping up.

More importantly people would have stayed home and so we could have tamed the virus which would mean the economy opens up quicker and safer.

This is a people issue and not an economic issue. Dealing it like that would have saved the economy better IMO. Our politicians and companies would never let a good crisis go wasted without appropriating money for themselves.

> This is a people issue and not an economic issue.

Take it a step further: All economic issues are really people issues, in one way or another.

The economy exists to serve people. We do not exist to serve it. Whenever there are measures that are "to help the economy", but which are detrimental to ordinary workers, they're not really to help "the economy"—they're to help the people at the very top, at everyone else's expense.

We need to refocus on what helps actual people—what helps the most people—rather than on the misleading abstract of "the economy."

>Everyone I know would choose their entire retirement fund over a one time check of $18,000

I am assuming you don't know a single person in the 40% that don't have $400 saved up for emergencies.

>it does feel like we got less that we deserve, but stimulating the stock market was absolutely the right move.

It isn't without merit...until you look behind the curtain at OZ. The stock market was already in a bubble and we just inflated the bubble even more. P/E ratios in the public markets are beginning to make revenue-less tech unicorns look reasonable.

>a majority of Americans have a 401k

Ok, so they have a conflict of interest in the matter (25% of Americans have no retirement). Of those with a 401K aged 35-44 the median balance is $22k (so its pretty much a wash for them). Then on the very harsh side of things, the free market side, you risked your money by investing, if a portion of your portfolio includes stock in overvalued companies with runaway P/E ratios that didn't have cash reserves to whether the storm, you invested poorly and you should expect taxpayers to bailout your poor investments.

> I am assuming you don't know a single person in the 40% that don't have $400 saved up for emergencies.

This is an oft misunderstood stat[1][2]. The actual stats from the survey show that 61% of Americans would choose to pay a surprise $400 bill in cash. The remaining people would prefer to use a credit card or other ways of paying. Only around 12% of respondents said they would actually have a hard time paying the bill.

> Ok, so they have a conflict of interest in the matter (25% of Americans have no retirement). Of those with a 401K aged 35-44 the median balance is $22k (so its pretty much a wash for them). Then on the very harsh side of things, the free market side, you risked your money by investing, if a portion of your portfolio includes stock in overvalued companies with runaway P/E ratios that didn't have cash reserves to whether the storm, you invested poorly and you should expect taxpayers to bailout your poor investments.

I think you're moving the goalposts a bit. I could just as easily say "Why should tax payers bail out your poorly chosen career? Just work from home." The point my parent was making is that $6T was allocated for relief but too much of it went to the stock market. My point is that stimulating the stock market has benefits for all. The individual checks sent out should have been bigger, but the question is "Money has been allocated for relief, should a significant amount go towards the stock market?" and the answer is definitely "yes".

If you believe the government should not "bail out" citizens when they need it, that's fine, but be consistent.

[1] https://www.bloomberg.com/opinion/articles/2019-06-04/the-40...

[2 (non-paywall)] https://www.illinoisreview.com/illinoisreview/2019/06/americ...

Can you speak to how propping up the stock market has benefits for all?

Well I already talked about how most Americans have money in the stock market, so there is that immediate benefit of seeing your savings increase. But there is also a line of logic that goes like this:

An economic depression is bad for everyone. Therefore avoiding an economic depression is good for everyone. Quantitative easing has been shown multiple times to alleviate / avoid massive economic downturns. Therefore QE is beneficial to all.

>Well I already talked about how most Americans have money in the stock market, so there is that immediate benefit of seeing your savings increase.

This is inaccurate. Your savings don't increase until your portfolio is liquidated. If it's liquidated at a time there is blood in the streets, you might has well have taken everything out ahead of time, paid your taxes and been done with it.

The only reason it's "good" to avoid Depressive price movements is because every single academic has demonized the creative destruction resulting from pruning overly wasteful business models. It's unthinkable that people should have all their money anywhere else but in the hands of people virtually guaranteed to not be interested in improving your local community.

Then you don’t know poor people who don’t have any investment in the stock market. Who absolutely do benefit from the immediate cash. Who drive your Uber, driver your door dash, serve your meal at your restaurant, probably cleaner your house, do you yard work, sell you shoes at the store, check you out at groceries, stock your groceries, serve you drinks at the bar.

Stimulating the stock market was not the right move. You want to talk about putting the money and letting the market do it’s thing, give it to people and let them decide where to put.

Putting the money in the stock market has only benefited those already in the stock market and those with the money to enter it.

> Putting the money in the stock market has only benefited those already in the stock market and those with the money to enter it.

Quantitative easing has been shown time and time again to alleviate and avoid economic downturn. Do grocery baggers and bar tenders benefit from an economic depression? Do you think Obama made the right choice to stimulate the economy in 2008? This is exactly the same thing.

>Do grocery baggers and bar tenders benefit from an economic depression?

People need groceries even during a depression. Its often said alcohol is recession proof, in fact alcohol sales seem to thrive even during a pandemic.

I'll tell you what isn't

>Do you think Obama made the right choice to stimulate the economy in 2008? This is exactly the same thing.

Actually Bush took out a Stimulus of ~$800-900B before he left office and then Obama took our another $800-$900B when entering office. And I would say the vast majority of people I speak with would rather have seen the banks fail rather than taxpayers bailing them out (for massive fraud they perpetrated to issue bad loans/mortgages and then package them up and sell them to others knowing they were "toxic assets"). Banks used taxpayer money to buy their competitors to concentrate the market and fund foreclosure litigation to foreclose on the taxpayers that bailed them out. In hindsight most people agree the Bush/Obama bailouts should have gone directly to the homeowners, but it was considered a "moral hazard" encouraging bad behavior in the future, whereas ironically they didn't see the moral hazard in rewarding the banks that bear the most responsibility.

You just nitpicked his two examples (and for a nitpick back bartender != liquor store clerk). I don't know enough about econ to have a side here but I would be interested in hearing a counterargument that actually addresses the impact of economic downturn on the class of jobs being discussed here (waiters, retail, cleaners, drivers, etc.)

Do you think Obama made the right choice to stimulate the economy in 2008?

Does anyone think that? Bailing out mismanaged financial dinosaurs was a monumentally poor decision. He didn't even have W's excuse: high suggestibility due to low intelligence.

>Everyone I know would choose their entire retirement fund over a one time check of $18,000

We live in a bubble. There are VAST SWATHES (millions and millions) of people whose ENTIRE NET WORTHS are less than $18,000.

Tell that to Acme supermarket workers who are seeing their pay slashed because their employers are preparing for an IPO [0]. The stock market is not the economy. It's a part of it that has little baring on your average American [1]. As such, it should not be such a high priority in this case to prop up the stock market.

0 - https://www.inquirer.com/news/albertsons-acme-ipo-lubert-202...

1 - https://www.cheatsheet.com/money-career/why-a-booming-stock-...

I did some searching and seemed to find that the majority of Americans do NOT have a 401k or do not contribute a significant amount.

"The typical household approaching retirement had $135,000 in combined 401(k)/IRA assets. These assets will provide $600 per month in retirement, an amount whose purchasing power will decline over time with inflation. Moreover, only half of house-holds have any 401(k)-related holdings." [1]

[1] http://crr.bc.edu/wp-content/uploads/2017/10/IB_17-18.pdf

> and a majority of Americans have a 401k

You are living in a confirmation bubble, one easily disproven by data. I'm a career engineer and I don't even have a 401k

> stimulating the stock market was absolutely the right move

False. The stock market has zero connection to the health of the actual economy right now, and is only enriching the privileged. Propping up the stock market was a political farce to make it look like the economy is doing fine when it clearly is not.

It's funny because the people who kicked and screamed when China did the same thing are the same people who think it's okay when their country does it.

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