Coming Soon: Viral Government Checks
The infectious idea spreading in DC is $1,000 checks for most American adults.
As coronavirus ravishes the American economy, the Trump administration and Senate Republicans are working on a third aid package that may top $1 trillion. The Senate is likely to first pass the House’s $100 billion aid package, which itself followed the initial $8.3 billion emergency measure earlier this month. Wisdom of the “stimulus” specifics aside, the pressure to “do something” is clearly irresistible.
“We need to directly help American workers and families face this uncertain period, and particularly we’re examining policy tools to put money directly and quickly into the hands of American families,” said Senate Majority Leader Mitch McConnell. “We also need to move swiftly and boldly in a major way to help American small businesses survive this disruption and thrive on the other side of it. In particular, we are preparing bold steps to ensure that Main Street can access liquidity and credit during this extraordinary time.”
At the forefront of the package is likely to be an immediate check of at least $1,000 for every adult American (under whatever income level is agreed upon), perhaps followed by a second check in a couple of months. The amount represents about a week’s pay for the typical American worker, but Treasury Secretary Steve Mnuchin says the amount “may be a little bit bigger than what’s in the press.”
President Donald Trump initially favored a payroll-tax cut, but that would take months to be realized by workers who keep their jobs. He now says, “We want to do something that gets money to them as quickly as possible.”
That will indeed be popular with the millions of Americans who are losing money in real time due to the economic shutdown, which is meant to “flatten the curve” of the viral spread. Perhaps the government checks will even restore the confidence that fuels the stock market.
Still, we’ve tried direct income redistribution twice before and it’s generally ineffective at stimulating the economy. The difference is the previous two times were tax “rebates.” This would just be a direct payment financed by deficit spending. With a national debt of $23.5 trillion and a projected deficit of $1 trillion before spending another trillion, however, the U.S. can’t afford this ineffectual “stimulus.”
Then again, with a national debt of $23.5 trillion, what’s another $1 trillion among friends?
The real problem is that Democrats are seeding an expectation of Universal Basic Income. “GOP & Democrats are both coming to the same conclusion: Universal Basic Income is going to have to play a role in helping Americans weather this crisis,” declared Alexandria Ocasio-Cortez, the new face of Democrat economics. Democrats have wanted UBI for years, and they’re not going to let this crisis go to waste. Tulsi Gabbard says she doesn’t want the checks to stop “until COVID-19 no longer presents a public health emergency.” How many trillions of dollars would that end up being?
Compassion for the American workers and their families suffering through what is bound to be a major economic slowdown, if not a recession, is one thing. Bankrupting the country to implement socialism is another.