The emergency aid was $2 trillion dollars. “We had to pass it.” It was named the CARES Act, Coronavirus Aid, Relief, and Economic Security Act. President Donald Trump signed it into law on March 27, 2020.
The politicians kept touting the $1200 per adult and the $500 per child being sent to some people.
Wait a minute. There are 330 million people (of all ages) in the United States. That’s $396,000,000,000 dollars if every person received the $1200. That means $400 billion would send $1200 to everyone. Yet, the CARES Act spends roughly four times the cost of sending $1200 to each resident.
Why not send everyone $1200 for five months? Guarantee a “universal basic income” to people if you’re spending this much money.
Federal spending was already a problem under Trump. Now, this real emergency has infected the federal budget.
Yes, there is an emergency. But that’s all the more reason to go into (yet more debt) wisely. We might have to spend more!
In good economic times, as I have written repeatedly, a state or nation should create a reserve fund. When times are good and interest rates are low, invest in infrastructure and multipliers such as higher education. When times are good, invest in research. Prepare for when times won’t be good.
Now, times aren’t good. With the national debt spiraling and interest rates at historic lows, there’s little room for government intervention without negative consequences in the future.
Spending recklessly is never wise, but it does have less consequences to economic growth and opportunity when there’s a budget surplus. Even running a slight deficit annually isn’t a disaster if future revenues cover those costs. But we’re not running a “slight” deficit, now.
Trump was already overseeing the worst expansion of spending in recent memory.
Spending does originate in the House of Representatives, legally, but Congress always seems to find a way around process. This time, they started in the Senate and looped back using parliamentary tricks. (You can pass an “empty” bill and then fill in the blanks during reconciliation.)
We will be even less prepared for the next disaster after COVID-19.
I wish there were voices of reason, but when you argue for any delays in spending to fix something like the CARES Act, both parties portray you as a heartless, soulless, monster. Spend! Spend! Spend! Now! It’s an emergency, after all.
Fiscal discipline was already on life support. COVID-19 might push it into a coma. I’m hoping we don’t need a fiscal disaster to realize how many mistakes have been made.
We should always help those in need. The CARES Act helps a lot of people doing fine and ignores some of those most in need. I expect no less from our leaders.
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