Our government fumbled the lockdown leading to depression. Its actions have resulted in over 40 million jobs lost, and many businesses gone forever. Even after spending trillions, we have uneven results. We see long lines at food banks. Some are receiving aid, and some are still waiting. Many people receiving assistance are getting more than if they returned to work. Many people are losing or endangered of losing their health insurance along with their jobs. In a word, we have a mess.

It got me to thinking how much better off so many would benefit from a Personal Benefits Account (PBA). The bedrock of “Dave’s Plan” (Series on this site), the PBA combines your tax-favored savings plans with catastrophic health insurance. Each and everyone would be enrolled. By eliminating the paperwork associated with most medical claims, it would be cheaper and more efficient. It further lowers cost by virtually banishing credit risk. The very idea “pre-existing conditions would ultimately cease to exist. Big health problems are covered. It makes tax-favored savings available to every person. Everyone would have formed a connection to a financial institution. Run through the Internal Revenue System; it pulls existing programs into something workable and easy to use.

Most Americans have direct- deposit. The government already uses it to send people their social security, tax refunds, and EITC checks. Wouldn’t it be easier to combine all our safety-net programs into a single cash deposit? Under Dave’s Plan, everyone must file an income tax form. Once net income is determined, we can compute a safety net support payment. Just using a non-tax-sheltered account. Call it, “The Expanded Dave’s Plan.”

If we totaled all of our existing programs designed to help those down on their luck and the poor, it comes to a tidy sum. Food stamps(Snap), housing, EITC, job retraining, Tanf, and unemployment insurance are just some of the programs. What if we get rid of all of them and combine the money into a cash payment.s In the August 22, 2016 post “A Strong People” in my series on “The Long Journey to More” (Available on this Site), I noted the Cato Institute computed the programs a single mother qualified for would equal $2,000 a month cash payment in 2013. It’s ,of course more now. If your income falls below a certain point say through job loss or reduced hours it starts to kick in. You file an amendment to your return online. We should structure in a way they are high enough to sustain people bur low enough so as not to discourage anyone from working. The existence of so many income levels for different support programs means earning a few extra dollars may cost a recipient thousands. The is known as “the Poverty Trap.” Consolidating into one cash payment would avoid this disincentive.

This idea isn’t my new idea. The proposal is just Milton Friedman’s reverse income tax combined with “Dave’s Plan.”. He proposed if we want to have a safety net, why not just give the help directly to those in need. We tax people as they have more. We should help them when they have less. The plan would cut out all the agencies, overhead, and regulations. The result would be more money in the recipient’s account and do it in a more timely fashion.

How would this have played out in the present circumstance? Instead of having to apply for various programs, all that would be needed is going online and filing an amended return. This would reflect the present circumstance. Payments would start as soon as processed. The recipient and creditors would know help would arrive shortly. It would make it easier for everyone to cope.

Those needing to operate remotely with delivery or pickup because of susceptibility to Covid-19 would have access to all their aid with a debit card. It would be a much better idea than having the vulnerable forced into establishments to use their SNAP cards. Instead, they could use no contact delivery or pickup. We will never know how many lives this would save, but it unquestionably saves some. We can accomplish this by reducing their venturing forth for necessities. They’re the ones still populating the ICUs. These are the ones doing the dying.

Even today, people are still waiting for aid. Under this plan, the payment s would be automatic. If congress wanted to provide some additional assistance for a particular situation, we could add it to the payment. There would be no fears of starving. This measure would make planning and budgeting much more manageable. They would know what the minimum amount of money they would have every month. I taught Personal and Family Finance at the college level for many years. I know how important this is to make decisions for a better future.

The plan gives everyone personal control over their savings, healthcare, and safety net. Changing jobs or locations would only be a question of how it improved your circumstances. Instead of another retraining program for those harmed by competitive job loss, increase the payment. Let the individual decide what’s best. Maybe there is a job elsewhere. An employer needing workers will train you on the job. Instead of having to enroll in limited local approved programs, the individual chooses what’s best.

Everyone has a connection to at least one financial institution, making access to modern finance cheaper and more accessible for everyone. In 1904, Amadeo Peter Giannini, a man born to immigrant parents, founded the Bank of Italy in San Francisco. His bank catered to small depositors and businesses. In the aftermath of the Great San Francisco Earthquake, his bank was there to lend to those small businesses and people to get them back on their feet. This bank built on small firms and depositors grew to become the Bank of America, the largest bank in the World. We need to re-establish this kind of relationship for everyone. Too many people fall outside our financial system to their detriment. In our Capitalistic System, everyone needs to be a welcome participant.

This plan has something for all sides. For on the left, we have universal healthcare and a guaranteed minimum income. Conservatives and libertarians would be happy to know this done without huge new expenditures. For the most part, we redirect and repackage existing programs and funding. While providing expanded benefits, we can do it with reduced bureaucratic and regulatory overhead. As people lose their jobs in a recession, they automatically qualify for income support. This quick assistance would relieve pressure on the government to make costly and possibly ill=considered measures. An automatic counter-cyclical program would be in place at all times. Sounds like a good platform for a candidate.

So why don’t we consider “Dave’s Plan”? Some say it’s too complicated. How can that be if we use existing programs? A better answer is it cuts across too many entrenched domains. We dismantle many bureaucracies. How many crony capitalists would lose their edge? How many “experts” would be sent packing? It’s tough to streamline and simplify when so many profit from the opposite.

Lately, many have been loudly lamenting the vast wealth gulf between the various races in the US. Wealth or net worth is a matter of foregone consumption. Saving and investing for the future rather than just spending and consuming. Taking it from somebody and giving it to someone else is no guarantee it will end up in someone’s net worth. The recipient might just as well spend it. If you want to build anyone’s net worth, make it easy for them to put something away for the future. You’re getting a return rather than paying high-interest rates, so you keep more. You have to make it possible for people to protect themselves from losing their net worth because of a catastrophic illness. An “Expanded Dave’s Plan” accomplishes all this. It’s just a matter of really wanting to help people rather than just having talking points.