Is the $1.9T COVID relief package mostly wasteful?
- As of Thursday, March 11, there have been 29.9 million coronavirus cases in the United States, with 542,641 reported deaths.
- The House approved the “landmark” $1.9 trillion COVID relief bill, entitled the American Rescue Act of 2021 on Thursday, seven weeks after President Biden was inaugurated. It will provide up to $1,400 for Americans, and expands the $300 weekly unemployment benefits to last from April to September.
- The bill details $350 billion to state and local governments, $130 billion to school reopening, $49 billion to COVID research, and $14 billion for vaccine distribution. In addition, $39 billion go to child care, $25 billion for rental assistance, and $30 billion for public transit.
- Republicans called the bill “unfit” for fighting the pandemic, while Democrats deemed it “necessary” to lift the “economic pain from a year of restrictions.”
While the latest COVID relief package looks far from perfect, the problems are less to do with waste and more that the bill doesn't provide enough relief to those who need it. Some seem to have a problem with the bill's size, especially the $1,400 in direct aid. However, according to The Washington Post, economists 'broadly agree' that aid should be mostly directed toward low-income workers. The Post points out that 'last year's bills cut aid off too soon and did not give enough help to struggling families' and that 'it's better to err on the side of doing too much than too little.' As stated in a Jacobin article, 'the package is a necessary rejection of austerity politics that have dominated Democratic politics,' targeting most of its benefits to the 'bottom end of the income ladder.'
The Post says that some economists are worried 'that growth could overheat, leading to a bout of hard-to-contain inflation,' but Fed Chairman Jerome Powell has countered this concern. As reported in Forbes, Powell believes the current unemployment rate 'is clearly understated,' suggesting that more stimulus is unlikely to have a long-term negative effect in this area. Most of the criticisms circulating around specific elements of the bill seem to involve things that will help workers and low-income individuals upon closer inspection. For example, preserving Amtrak jobs and ensuring women in poverty have continued access to reproductive health care. There is certainly room for improvement in the bill, but 'mostly wasteful' doesn't seem to be an accurate description.
President Biden's sweeping COVID relief package that just passed in Congress is the latest example of Washington's runaway spending of taxpayer dollars. For comparison's sake, Biden's stimulus plan is larger than most countries' annual economic output (barely trailing Italy's and exceeding Brazil's). The latest budget-busting spending plan will add to our national debt that will burden future generations with payment and explode the Federal deficit, which currently stands at $3.1 trillion.
One notable example of wasteful spending is $170 billion to public schools (K-12), colleges, and universities; federal taxpayer money should never go to education since state income taxes and local property taxes are already levied for this purpose. In addition, the plan sends $1400 to individuals who earn less than $75,000 (or $2800 for couples earning less than $150,000); these payments are Democrat giveaways designed to make them look benevolent while spending taxpayer money. Instead, the government should redirect these dollars to provide needed capital in the form of small business loan programs. Small businesses generate two out of every three new jobs and are estimated to account for nearly half of total US economic output. Instead, by extending unemployment benefits and adding an extra $300 to each check, the Democrats' plan keeps Americans out of work and dependent on government checks to pay their bills.
The audacity of spending an additional $1.9 trillion in such a cavalier way, without providing a rationale for how it will result in sustainable economic growth, is the height of Washington-based, tone-deaf, out-of-touch, political grandstanding that reinforces Americans' low opinion of our lawmakers—which currently stands at a meager 27% approval rating.