After a group of 10 Senate Republicans duly trudged to the White House on Monday to show their “bipartisanship” on yet another COVID-19 stimulus bill, President Joe Biden did the predictable: He looked at their outreached hand of political comity and spat on it. Just as well, since the only thing the Democrats’ plan will “stimulate” will be more debt.
Biden and his party were never really interested in bipartisanship at all, despite their claims to the contrary. The whole point of this choreographed Kabuki political theater was to humiliate the Republicans, who foolishly took Biden and the Democrats at their word.
Republicans had suggested a more-or-less stripped-down bill of “just” $600 billion, compared to the Democratic wish-list of $1.9 trillion, which includes such non-COVID-19-related items as a $15-an-hour national minimum wage, a $350 billion bailout for poorly run states and cities, $170 billion for K-12 schools and colleges, $25 billion for “rental assistance,” and so on. Democrats also want checks of $1,400 for most households.
Republicans seek checks of $1,000, but would exclude families with more than $50,000 in income from the handouts. Their spending on all other aid is roughly two-thirds what the Democrats seek.
In rejecting compromise, Biden gave Congress a green light to totally ignore Republican input by passing a stimulus package through reconciliation, not the normal budget process. That will require a simple majority of 51 senators, not a supermajority of 60, to pass.
Senate Democratic Leader Chuck Schumer confirmed this Tuesday, saying: “Joe Biden is totally on board with using reconciliation” to pass the bill.
So, just as with Obamacare, the fix is in on the Democrats’ all-or-nothing bill, loaded with goodies for far-left interest groups, teachers unions and Blue State governors.
But a few points need to be made here, not just about this bill, but about stimulus in general.
First, the economy is already recovering. It grew 33.4% in the third quarter and 4% in the fourth, following 2020’s disastrous 31.4% second quarter plunge. Unemployment peaked a 14.8% last April, but fell to 6.7% in December, far better than any official forecasts.
We’ve already committed $4 trillion in spending on COVID-19 over the past 10 months, but still have an estimated $1 trillion left unspent. Add another $1.9 trillion, and you see that COVID-19 adds to our already massive pile of federal debt, which, at $28 trillion, amounts to well over $200,000 per family.
Such reckless stimulus spending will impoverish the next generation. Yet, the fact is, the pandemic didn’t shut down the economy. Politicians did. Now they’re preening over their own generosity while piling up more debt that you, your kids, your grandkids and your great-grandkids will be paying off for decades to come.
Worse still, much of the Democrats’ “stimulus” bill will actually damage the economy.
For example, boosting the minimum wage sounds benevolent, but it will lead to unemployment for those with little education, training or skills. That’s not just our opinion: The Congressional Budget Office estimated it would kill 1.3 million jobs. It’s a war on the working poor.
Extended unemployment benefits likewise sound generous, but will encourage large numbers of people to stay home and avoid work. It’s a truism that paying people not to work boosts the number of unemployed. Yet, that’s what this bill does.
Helping fiscally troubled states is a huge mistake. Most are Blue States that have spent and taxed their way into trouble, and now want to use the pandemic as a cover for a bailout. It was bad policies by elected officials and bad decisions by voters that got these states into trouble, not the Chinese virus. Bailing out profligate states only encourages more of the same behavior.
And, sure, increased spending on schools sounds great, but that money won’t go to students. It will line greedy teachers unions’ pockets. Meanwhile, education standards and test scores will continue to slide as schools remain closed.
Instead of indiscriminately spending more money on bogus stimulus with checks for all, and irrelevant spending on Democrats’ far-left wish lists, we should target aid to the truly desperate and needy in our economy, those who were blindsided by some states’ destructive lockdowns and are now jobless.
OK, you say, but how do we stimulate growth, if not by government spending?
The simplest answer: Re-open the economy immediately. Rather than send $25 billion in “aid” to restaurants, let them open. Same with other small businesses.
Let’s take Democrats’ advice and follow science. A growing pile of studies show that virus lockdowns devastated the U.S. economy, with few or no offsetting health benefits. Only by reopening can we ensure solid growth. Phony stimulus gives people a check but not hope.
By the way, the government’s own data plainly show stimulus to be a waste. In a little noted report, the Congressional Budget Office estimated that for every $1 the government spent on COVID-19 “stimulus” during 2020, on average just 63 cents of economic activity was generated. That’s a negative return on a huge investment.
Call it what you want, it’s not stimulus. In fact, it’s a waste of money.
A recently released Rasmussen Poll shows that “a majority (59%) of voters say a new round of stimulus checks is necessary to help the country recover from the COVID-19 pandemic.”
Clearly, Americans have bought into the myth that the government can “stimulate” the economy. But it can’t. At least, not by wildly spending money. Real stimulus comes from low taxes, light regulation, the rule of law and strong protection of property rights. Anything else is just politics.
— Written by the I&I Editorial Board