Most politicians in both parties adamantly disagree with President Trump on the need to achieve proper balance between quarantine and our livelihoods. They want an economic and liberty nuclear winter, and they want it indefinitely – without investigating any of the science and data behind it. At the same time, they want to spend trillions upon trillions of dollars “stimulating” a dead body with nothing to stimulate and don’t appear to see any downside to accruing all this debt and risking market distortions. So if that’s the case, why not just give every American a year’s worth of income?
Like all Kabuki theater in Washington, where Republicans agree with Democrats on 99 percent of an issue but fight truculently over the last 1 percent, both parties shook hands (I mean elbow-bumped!) on a $2 trillion stimulus today plus $4 trillion in Federal Reserve shenanigans.
The bill indiscriminately throws too much money in a black hole without better defining and studying the scope of the problem to come up with a better solution. It solves nothing, bankrupts our nation forever, and still brilliantly manages to leave many people behind at the same time!
"In effect, this is a wartime level of investment into our nation. The men and women of the greatest country on Earth are going to defeat this coronavirus and reclaim our future," said Majority Leader Mitch McConnell when announcing the deal this morning. "The Senate's going to make sure that they have the ammunition they need to do it."
The problem is that this is not an investment at all. There is nothing to invest in or stimulate, with both parties pushing an indefinite lockdown. Yes, there were some good and necessary provisions enounced in the bill, such as unemployment benefits for those forced out of work by government (12% of the bill) and more funding for critical health care supplies (5% of the bill). But the rest of the bill is throwing money in a black hole when everyone knows they will pass numerous other bills that will need to double down on more payouts if they don’t address the root of the problem.
We should have a united agenda to get healthy people back to work with a mix of better-targeted geographic and demographic quarantines, supply Americans with masks and gloves to go outside like the Asian countries did, and get a more accurate projection of this virus than the flawed study that has been relied on. Without that, no amount of money in the world will help.
This bill sends a $1,200 check to every adult and an extra $500 for each additional child. The checks are phased out in a graduated scale for individuals earning over $75,000 and families earning more than $150,000 until they are completely eliminated at $99,000 for individuals and $198,000 for couples. It also funds loans and subsidies for corporations and large industries ($500 billion), such as the airline industry. Boeing got a $17 billion carve-out. There is no provision ensuring that those who get funding don’t take the money to China. The cost of the small business loans is $367 billion, along with $150 billion for state governments and $130 billion for hospitals.
Obviously, we all agree that with people forced by government to shut down, they need to be compensated; however, this bill achieves the worst of all worlds. The cost is crushing, but it fails to come anywhere near reimbursing businesses and many individuals for the losses. It indiscriminately mails out checks as high as $3,000-$4,000 for families under the $150,000 income level threshold who have not lost a penny and are still working. On the other hand, those earning over the threshold but who are still not wealthy, especially in high-cost areas, are left with no compensation, even if they are 100% out of work.
Furthermore, this bill calculates income pursuant to last year’s tax filing. That means if you were a small business that earned $200,000 last year but then were completely shut down this year, you are out of luck. Means-testing the rebates rather than situationally testing them as compensation only for those out of work makes no sense.
It’s true that lawmakers expanded and expedited unemployment benefits to cover those people, adding $600 of additional weekly benefits at a cost of $250 billion. But once they have that provision, which will bring weekly unemployment benefits up to $1,000 for most people and as much as $1,200-$1,400 in some states, why did they need the rebates too? Moreover, as Sens. Sasse and Scott are pointing out, it will further incentivize beleaguered employers to lay off more workers. Let’s wait to get the economy moving again, and the income will come back.
This legislation also doubles down on the first rescue bill’s mandated 12 weeks of paid leave and ensures that the cash is advanced to the businesses to cover the mandate.
“Well, government shut these people down, so they deserved to be paid,” some might suggest.
In that case, $1,200 won’t cut it for a once-successful small businesses. So why bankrupt the nation for a half-baked measure that literally cannot stimulate anything at this point, when they will have to spend another $2 trillion in two weeks?
And if our policymakers clearly see no downside to this because they seem to believe the feds can print an unlimited amount of money with limited consequences, then why not give every individual $50,000 and every family $100,000 to make them feel comfortable and quell the anxiety? I’m dead serious. What is the limit, and why is this so arbitrary? At what point do we become like Venezuela? If lawmakers believe there is no risk of that happening, why not fully compensate people for the long-term shutdown these same politicians are pushing?
Given that once the parties agree on something, they pass the bills with lightning speed anyway, why not just separate out the different components and hold individual votes? We need a rule of one issue at a time per bill.
In reality, this is not a WWII-style investment. Here’s what a WWII-style investment would look like:
- Congress would immediately convene to debate and study the critical questions that they are taking for granted about the virus itself : When did it begin, how many have already had it, what is the best evidence to properly balance quarantine with work? And then make decisions that flow from that reality.
- Congress should push a massive surge in deregulation that is commensurate with the spending surge so that entrepreneurs can know with certitude that they will operate under a pro-business climate in the long run. This will help us decrease our dependency on China, because businesses would be able to operate here without draconian and costly rules.
- If we are going to bankrupt ourselves, why not actually invest the money in the form of slashing taxes across the board for several years so we can rebuild by incentivizing employment, not unemployment?
- Abolish all foreign worker visas to make sure no American worker is left behind. We need a national plan to rebuild our economy with American labor on American soil and permanently socially distance ourselves from China.
- Spawn a revolution in health care competition and freedom by removing all the barriers to starting new hospitals that are now controlled by the incumbent powers.
- No member of Congress or high-ranking executive official should be paid until the economy meets a certain benchmark.
That is what a real investment looks like. What Republicans are achieving now is the worst of all policy outcomes and the worst of all political liabilities. Thus, if they are going to accept the premise of the Left that we need an indefinite shutdown and indefinite spending and focus on no other area of how we got to this point and how to get out of it, then why not just mail everyone a $100,000 check? It’s free anyway!