Corona subsidy (free money)

[KyushuWoozy]

Hopefully the subsidy comes through for you. I’m in a rural area that relies a lot on inbound tourism and a lot of people I know are suffering, especially if they have big overheads.

Thanks. Yes, a friend is planning to close her wonderful kaiseki restaurant after 20+ years of operations. Corona is the straw that broke the camel's back. With declining and aging population and stagnating local economies it's tough for business owners outside of the big cities. It's such a pity because these off the beaten path locations are much loved by many of our big-city-dwelling inbound clients.

[Kanto]

When it comes to the individual Covid19 subsidy, for individuals and families (100,000Yen), should everyone claim it?

I am wondering from an ethical standpoint what the best course of action is. It is literally free money for anyone to claim.

My wife and I were not that badly affected. However, am I foolish not to claim it?

What about my infant son's allotment? Should I claim his and put in in a NISA and let him decide in the future?

Just curious about what everyone is thinking. My rational self-interest is battling with my conscience.

[RetireJapan]

If you are concerned about not needing or deserving the money, why not claim it and give it to a charity you deem worthwhile? Better than leaving it for the government to spend how they please...

[adamu]

When it comes to the individual Covid19 subsidy, for individuals and families (100,000Yen), should everyone claim it?

I am wondering from an ethical standpoint what the best course of action is. It is literally free money for anyone to claim.

My wife and I were not that badly affected. However, am I foolish not to claim it?

My current thinking is:

1. It's a universal benefit, so the expection is that it will be claimed universally. If the government wanted to put more fine-grained requirements, they could have, but they didn't.
2. Any kind of injection of cash into the economy causes inflation, which lowers the value of your own cash (more cash everywhere, but the same amount of stuff = higher prices). Usually this is injected via giving the money to banks, which you can't do anything about, but this time they're giving some of it to individuals. By not taking the money, you're still subject to inflation, but don't get any direct benefit. May as well also take your share.
3. We pay taxes with no questions asked, we should apply the same diligence to handouts. Imagine if it was a tax break instead of a handout. Logically equivalent (unless you pay less than 100k in taxes), but I doubt people would have the same moral dilemma when given the chance to pay less tax

My thinking could be biased due to having yen signs in my eyes , but I think that an economic calculation was done when thinking up this policy, and self-restraint doesn't need to be involved here.

[Beaglehound]

My thinking is take it and then give a portion to charity if my and my wife’s income ends up being hit by less than 200k.

[TokyoWart]

When it comes to the individual Covid19 subsidy, for individuals and families (100,000Yen), should everyone claim it?

I am wondering from an ethical standpoint what the best course of action is. It is literally free money for anyone to claim.

My wife and I were not that badly affected. However, am I foolish not to claim it?

What about my infant son's allotment? Should I claim his and put in in a NISA and let him decide in the future?

Just curious about what everyone is thinking. My rational self-interest is battling with my conscience.

Keep in mind that these payments are supposed to work to stimulate the economy; they're "helicopter money." If you received the money and put it in a pillowcase you would short-circuit the intended effect but anything else you might do including buying necessities or luxuries (adds to demand to help address the demand shock), investing in stocks or bonds (supports financial markets) or giving to charities (adds to demand) helps address the extreme loss of economic activity from people staying home and many losing their jobs. Payments like this from the government add to Japan's public debt but that is in turn going to expansion of the Bank of Japan's balance sheet in hopes of holding off deflation.

[Wales4rugbyWC23]

Sorry to be a party pooper, but how is the Japanese government going to finance all this fiscal largesse? This is not to say that I think it is a bad thing. Personally, running my own business I have been affected but nothing like some other people, including on this blog. I will be applying for the rental support because we closed our business for a month and the 100,000 yen per individual for family members.
Anyway getting back to the point, I think for the Tohoku tsunami, all government workers got quite a significant pay cut for a couple/few years and they took away the child tax allowance on your tax return to finance the rebuilding. Japan is the most fiscally indebted country in the world, so they can't finance it purely by issuing more government bonds. Maybe another rise is sales tax, getting rid of the ridiculous furosato nozei or getting rid of the JET programme...

[RetireJapan]

Sorry to be a party pooper, but how is the Japanese government going to finance all this fiscal largesse? This is not to say that I think it is a bad thing. Personally, running my own business I have been affected but nothing like some other people, including on this blog. I will be applying for the rental support because we closed our business for a month and the 100,000 yen per individual for family members.
Anyway getting back to the point, I think for the Tohoku tsunami, all government workers got quite a significant pay cut for a couple/few years and they took away the child tax allowance on your tax return to finance the rebuilding. Japan is the most fiscally indebted country in the world, so they can't finance it purely by issuing more government bonds. Maybe another rise is sales tax, getting rid of the ridiculous furosato nozei or getting rid of the JET programme...

Don't think it matters. More government debt that will be eroded by inflation or growth in the economy eventually. All countries are doing this at the moment.

[Kanto]

All this made me realized how actually I had it “easy” last few decades.

It required hard work of course but the environment was not harsh. It enabled to continuously have work and being able to save and ultimately own a place.

If I were a 20 years old something today I don’t know how I would feel? This crisis will push economies back 10 years and it may take that much to go back to some normale.

And this just for a few weeks of shutdown. How fragile all this is!

Even if I am too pessimistic it is a really distressing to know that next generation will most probably have less opportunities than mine.

As someone in their early 30's it is exactly these fears that drove me to this site, and to establishing a basic investment and retirement plan. (Thanks Ben).

Passive investing and careful retirement planning while keeping debt and the cost of living low is the more rational response.

Gambling on options with no hedges, (ala reddit/wallstreetbets) is the more emotional response to a culture of low wages, non-existent interest rates, huge student and personal debt, and sky-high housing prices.

[Wales4rugbyWC23]

Sorry to be a party pooper, but how is the Japanese government going to finance all this fiscal largesse? This is not to say that I think it is a bad thing. Personally, running my own business I have been affected but nothing like some other people, including on this blog. I will be applying for the rental support because we closed our business for a month and the 100,000 yen per individual for family members.
Anyway getting back to the point, I think for the Tohoku tsunami, all government workers got quite a significant pay cut for a couple/few years and they took away the child tax allowance on your tax return to finance the rebuilding. Japan is the most fiscally indebted country in the world, so they can't finance it purely by issuing more government bonds. Maybe another rise is sales tax, getting rid of the ridiculous furosato nozei or getting rid of the JET programme...

Don't think it matters. More government debt that will be eroded by inflation or growth in the economy eventually. All countries are doing this at the moment.

Inflation and growth- hasn't been much of that over the last 30 years in Japan. Of course there is nothing wrong with a bit of Keynesian demand led government spending, it's what the UK has been doing for the last 70 years to pay for all the war debt.