Is it okay to empty him because of his health?
Your basic problem is widespread: Most people these days have reason to be uncertain about their prospects, given the economic turmoil resulting from the pandemic. Even if you have savings and the prospect of continuing to work, it’s hard to know what your financial needs and resources will be in the months and years to come. And then, the question of how much an individual should give to charity is the subject of much debate. I am identified with the “fair share” point of view (imagining the burden distributed among the relatively well-off in a manner calibrated according to income); others argued for less or more demanding approaches.
Answering your question requires knowing more about your particular situation. But like most Americans, you’re caught in a version of what economists call the savings paradox. While reducing your spending may be prudent individually, it is collectively harmful. This is because the primary way most of us contribute to the financial well-being of others is not through acts of charity, but through our regular participation as consumers and producers in economic life. A thriving economy is one of the many ways we profit from the actions of others. So you might consider spending – on regular consumption and philanthropy – as much as you reasonably think you can afford. The more people there are, the faster the recovery will be.
A friend who is a UPS driver asked what he, who hasn’t lost a salary because of the virus, should do with the government stimulus payment when others need it so much more. (He is a single man with no dependents who is a few years away from retirement.) Our first response was that the money was not only intended to help those with large losses, but also an attempt to support our economy. We suggested that he spend it to get the money flowing. His response was, “I don’t need anything. Maybe I’ll just donate it to charity.
We were faced with a similar dilemma. My wife has a small store in a business district of a small town, which she closed when our governor ordered all “non-essential” businesses closed. She has no money, but substantial monthly payments for rent, utilities and overhead. A few more months with no income and she may have to close her business.
We have just learned that she may be eligible for “Pandemic Unemployment Assistance” even though she is not really employed by anyone other than herself. We decided to accept government aid, at least in the short term, because if it went out of business there would be no money going to our suppliers, the owner and others. But like my friend the UPS driver, I wondered what was the right thing to do. Loren, Wellsboro, Pennsylvania.
You evoke a question similar to that raised by the previous letter. When large numbers of people lose their jobs and income, aggregate demand collapses; the total amount people spend on goods and services is decreasing. This, in a vicious downward spiral, further reduces demand. At this point, getting people to be able and willing to spend is an important part of economic recovery. And the money your friend has received can perform this function if he spends it, whether or not he deems the spending necessary.