President Trump has announced his intention to veto the new $900 billion so-called COVID Relief Bill. That is a decision that I wholeheartedly support, but Trump's stated reason is the wrong one. Trump says that the $600 payments that most taxpayers will receive are insufficient. He wants the payments increased to $2,000! He forgets that our country's financial resources are not unlimited. We have already dug ourselves an impressive fiscal hole in the context of the ongoing pandemic. The last thing we should do is to make that hole deeper.
This year our country will shoulder its largest deficit of all time: over $3 trillion. The excuse that our political masters offer is that we face an unprecedented pandemic, and this necessitates unprecedented federal intervention and massive stimulus.
The fact, though, is that the scattershot approach to “stimulus” that the federal government is following is grossly irresponsible. Yes, more than 300,000 Americans have died, but consider that in a typical year around 3 million Americans die (of all causes), and meanwhile, the vast majority of us will, in any given year, including this one, be left among the living — and we will be on the hook for whatever prodigal stupidity politicians engage in.
We simply cannot endorse maximum spending in response to every crisis. Our spending should always be proportionate to the emergency that presents itself, and it should be carefully targeted to alleviate that emergency, rather than to exploit it for partisan or corrupt purposes.
Consider that the so-called COVID Relief Bill just passed by Congress throws money willy-nilly in all directions. It sets aside billions for foreign countries, for illegal immigrants, and for federal programs that have no conceivable relevance to COVID itself. It plows money into deep blue cities and states that have overspent wildly for years because they expected that the federal government would ride to the rescue and bail them out. It pays many American workers more in enhanced unemployment benefits than they would earn if they returned to work, creating a perverse incentive for them to sit idle, thus keeping unemployment rates high and slowing down the nation's economic recovery.
These are the actions not of statesmen trying to rescue America from its plight, but of craven politicians trying to capitalize on the pandemic to purchase the goodwill of the voters, of special interests, and even of our allies overseas.
The worst feature of the so-called COVID Relief Bill, however, is the very $600 payments to taxpayers that Trump, illogically, wants to increase to $2,000. While it is true that money that suddenly appears in ordinary Americans' bank accounts is likely to be spent, and thus to stimulate the economy, the facts are these: the large majority of Americans have not contracted COVID and nor have they lost their jobs. They thus have no pressing need for a lump sum payment, and tens of millions of them won't spend it. The distribution of cash payments to every American making less than $75,000 per year, and to every couple making less than $150,000, is the bluntest possible instrument to accomplish the stated objective of economic stimulus. It also happens to be popular, because everyone enjoys receiving an unexpected windfall, and it is outrageously expensive, adding to the deficit and to the national debt.
Worse yet, payments like these spread the cancer of dependency. What the advocates of socialism want, more than anything, is for typical, hard-working Americans to become eager recipients of government handouts. Socialists want us to see the federal government as the source of an inexhaustible supply of “free money,” which we can tap whenever a “crisis” arises. Heaven forbid that we should have to tackle life's challenges with our own resources, or, as the old saying goes, “save for a rainy day”!
Alarmingly, spending proposals offered by “President-Elect” Biden and his team are even more extravagant: they include blank checks to cities and states flirting with bankruptcy, indiscriminate forgiveness of student loan debt, subsidized child care, “investments” in infrastructure, rent subsidies, an expansion to Obamacare, and a down payment on the “Green New Deal”. In other words, Biden would make our fiscal emergency into a fiscal catastrophe.
All this makes the plan to send a $600 check to every American a horrific mistake. I count myself as one of those tens of millions of Americans who will receive such a check despite the fact that I have no need for it. But I understand, as apparently few Americans do, that there is no such thing as a “free lunch”. Sooner or later, we, the taxpayers, will have to pay back the money that we are borrowing in 2020, and with interest. Interest rates are low, for now, and thus the temptation to spend wildly is strong, but we are approaching the point of no return after which reestablishing our country's fiscal health may be impossible. Soon, interest rates will rise, and our burden of debt may become insupportable.
Is this mere scaremongering? Consider the huge spike this year in the value of gold and of cryptocurrencies. These increases reflect a desire on the part of investors to find a refuge from the U.S. dollar, the future of which looks more and more shaky, given the fact that the “good faith and credit” of the federal government grows more illusory by the day.
We waste money by the trillions in America, and we have done so for years. In the context of the mass panic that has accompanied the coronavirus pandemic, however, this profligacy has only grown worse.
President Trump is right to veto the so-called COVID Relief Bill, therefore. Congress should get to work on a replacement bill — but it should be one that is smaller, more targeted, and more fiscally responsible.
That may not please the politicians or even the voters, but it will please our children and grandchildren — you know, the ones picking up the tab?