Congressional negotiators, we’re told, are inching ever closer to a deal for what’s being called a “second round of stimulus spending.” Sorry, but what’s planned has nothing to do with supercharging the economy. Want to really “stimulate” growth? End the foolish COVID-19 lockdowns that have decimated small businesses and hundreds of thousands of jobs.
The sound you’ll no doubt soon be hearing is hundreds of Washington, D.C., politicians and policymakers clapping themselves on the back for the pending stimulus package.
As it now stands, the $900 billion-plus deal is likely to include “direct payments to all Americans, funding for vaccine rollout and delivery, and an extension of unemployment benefits as well as much-needed aid to small businesses,” according to The Week.
But this is not “stimulus” by any means. It is the economic equivalent of putting a dying patient on life support.
So call this bill what it is. Government relief for a problem the government itself caused through mandated lockdowns.
Sure, an argument can be made that relief is necessary while we reopen amid a massive vaccination campaign. But this, the second major COVID-19 bill to emerge from Washington since last March, will not stimulate economic growth and more hiring. Only opening our economy will do that.
The distinction is important, not merely a semantic game. Because politicians, particularly Democrats, want to pretend that they can keep the economy shut down while applying “stimulus” from the nation’s capital, and that’s how we’ll emerge from our slump.
It’s the old Keynesian fallacy writ large. That government spending boosts the economy. It’s false. It’s the functional equivalent of transferring money from one pocket to the next and pretending you now have more money to spend. You’ve been “stimulated.”
Not true. A major study of U.S. economic data under COVID-19 published by the National Bureau of Economic Research in November concluded that “that traditional macroeconomic tools – stimulating aggregate demand or providing liquidity to businesses – have diminished capacity to restore employment when consumer spending is constrained by health concerns.”
Just as bad, the same study found that the Paycheck Protection Program spent an average of $377,000 for each job saved, and that school closures were seriously damaging the future income prospects of low-income minority students.
“Borrowing money to send everyone a little check may sound clever to myopic politicians,” notes Cato Institute senior fellow and economist Alan Reynolds. “But it is morally indefensible because it does nothing address to the problem of helping those injured by the pandemic itself or by related state‐mandated business restrictions and stay‐at‐home orders.”
In short, targeted aid to those who have lost jobs and businesses would be better than mass mailings of checks to all Americans. Contrary to what the nanny-state lockdown politicians say, we’re not all in this together.
What concerns us most of all is that stimulus bills and other phony efforts at reviving the economy are likely to lead to egregious new policies that will wreck not just the U.S., but the global economy as well.
Already, policymakers view the COVID-19 pandemic not as a tragedy, but as a massive opportunity to increase the size of government, raise taxes to stratospheric levels, and limit long-cherished freedoms for people around the world.
They’re arguing for a “Great Reset,” in which global bureaucratic and political elites, along with corporations closely tied to governments, will make the world’s economic decisions – not free markets, not supply and demand. This is no mere conspiracy idea; it’s well on its way.
“COVID-19 lockdowns may be gradually easing, but anxiety about the world’s social and economic prospects is only intensifying,” the highly influential globalists at the World Economic Forum warned last summer. “There is good reason to worry: a sharp economic downturn has begun, and we could be facing the worst depression since the 1930s. But, while this outcome is likely, it is not unavoidable.”
Their answer? “The changes we have already seen in response to COVID-19 prove that a reset of our economic and social foundations is possible.”
Scary words, to be sure. But the way out isn’t to have “stimulus” after “stimulus,” while government exerts greater and greater control and hands-on management of the economy and our daily lives.
The new COVID-19 vaccines provide an enormous opportunity to get back on track, to reopen our businesses and provide genuine stimulus, the kind that can come only by ending the devastating lockdowns that have hammered both the U.S. and world economy. The COVID-19 recession will end only when small-business growth and entrepreneurialism revive, and when millions of now-idle workers return to productive employment, rather than staying home and collecting “stimulus” checks.
No more Keynesian “stimulus,” no more socialist “Great Reset.” Want your business or your job back? Demand that your local politicians end the lockdowns now.
— Written by the I&I Editorial Board