According to Mark Cuban, a second stimulus package should give all American households a $1,000 stimulus check every two weeks for the next two months — and they must use that money within 10 days to promote spending and help keep businesses open.
But Cuban’s “Shark Tank” co-star, Barbara Corcoran disagrees with her friend’s “use it or lose it” approach.
“Unlike Mark, I don’t think a ‘use it or lose it’ approach is the way to go because it promotes unwise, quick spending,” Corcoran tells CNBC Make It.
“People should spend money on essentials first like food, rent and monthly credit card bills vs new TVs.” (Cuban did not immediately respond to CNBC Make It’s request for further comment.)
Corcoran — who famously started her real estate empire with a $1,000 loan — does support a second, targeted $1,200 check as part of any stimulus package, she says. But what’s even more important, says Corcoran, is that Congress extend unemployment benefits.
Stimulus checks are “not nearly as important as extending unemployment benefits that give a boost to those who need it most,” Corcoran said. But “I do think another stimulus package is useful to shore up folks hardest hit, especially those who have lost their jobs.”
Experts agree with Corcoran that boosted unemployment would help recovery more than one-time checks, because unemployment insurance can help mitigate financial hardship long-term.
During his senate testimony on Sept. 24, Federal Reserve chairman Jerome Powell noted that unemployment benefits would be necessary to continue economic recovery.
“I think while the economy has been doing better than I expected, I think there is downside risk if there is no further fiscal support. There are still something like 11 million people who have not gotten their jobs back. Those people are able to spend now because of the checks that they got and because of the enhanced unemployment insurance that they got,” Powell said. “There’s downside risk probably coming if some form of that support doesn’t continue.”
Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities, warns of the same risk.
“What’s needed first is support for people who are hurting the most. You need substantial unemployment, that needs to be reinstated. You need additional nutrition support and food stamps,” Marr previously told CNBC Make It. “The problem is now, the economy is at increased risk, and human suffering is increasing.”
“So,” Marr says, “I think additional stimulus payments can make sense on top of those other things. But again, I would start with unemployment [and] nutrition help.”
Each week, about 1 million Americans continue to file for unemployment benefits, CNBC reports, and nearly 30 million people are receiving aid week to week.
It is unclear whether a new stimulus package will be passed. On Tuesday, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin met to discuss a new stimulus package. In an interview with MSNBC, Pelosi called the conversation with Mnuchin “positive.” Mnuchin said he will talk to Pelosi again Wednesday and is “hopeful” about the prospects of a deal.
On Monday Democrats unveiled their proposal for what is being referred to as the updated HEROES Act. The trimmed $2.2 trillion bill includes another round of $1,200 stimulus checks and enhanced unemployment benefits.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
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