Extraordinary times call for extraordinary measures, so the push for a stimulus plan for the economy is understandable and necessary in a country staring in the face of a recession not of its own making.
It's what comes after the months of the coronavirus pandemic that worries us.
Once someone is used to getting something they have not earned, they have a difficult time giving it up. We're thinking here of the cash payments to individuals being considered in a third virus bill that is expected to be rammed through Congress by early next week at the latest.
The Trump administration is seeking $250 billion in cash payments to Americans in April, followed by another $250 billion in payments in May. The payments would be the same each month, according to a Treasury Department working draft of the plan, and the amounts would vary by family income and family size.
The estimated $1 trillion plan also includes $50 billion in loans to the airline industry, $150 billion for "other severely distressed sectors of the U.S. economy" through loans or loan guarantees, and $300 billion to help small businesses. It is a package larger than the $787 billion American Recovery and Reinvestment Act, which was passed in 2009 to help alleviate financial woes during the Great Recession.
The proposed personal payments, though, are not enough, according to U.S. Rep. Maxine Waters, chairwoman of the House Financial Service Committee. A relief plan she is suggesting would give every adult $2,000 a month and every child $1,000 a month during every month of the pandemic.
Some have suggested the pandemic could, in waves, last for 18 months. We certainly hope not. But we don't believe the volatile House member has any clue how much money she is expecting the Federal Reserve to expend.
Currently, the U.S. has 327 million people, give or take several hundred thousand. If every person was given just $1,000, that is $327 billion for one month. In six months, the amount would be nearly $2 trillion.
The U.S. already is more than $23 trillion in debt. For comparison purposes, its gross national product in 2020 was expected to be about $22 trillion.
The previous coronavirus bill that passed the Senate 90-8 and was quickly signed by President Donald Trump Wednesday included money for 14 paid sick days and emergency leave. It also allowed the Housing and Urban Development to suspend foreclosures and evictions through April for those who face losing jobs. In addition, it provided for free coronavirus testing to everyone, including the uninsured, expanded food aid and raised unemployment dollars for states.
Opponents of the bill, which included Sen. Marsha Blackburn of Tennessee, said the paid leave was an undue burden on small businesses, many of which are struggling because they have little money coming in.
Senate Majority Leader Mitch McConnell, R-Kentucky, said the bill had "real shortcomings" but urged his members to "gag and vote for it anyway." What that tells us is the bill was largely a product of the Democratic House — where it passed 363-40 (likely with little Republican input). Instead of taking time to get a balanced bill, Congress has rushed this through to be seen as taking action.
Which brings us back to the problem — not of these bills but of what happens later.
Cash payments, paid leave, free medical testing, foreclosure suspensions and the like may be necessary now, but we envision Democrats pushing to make some of this permanent. Those are the types of things many of the two dozen candidates seeking the Democratic nomination for president have been pushing for the last year or more.
Sen. Bernie Sanders, I-Vermont, for instance, has urged throughout his presidential campaign to eliminate student debt and to pass a Medicare for All, single-payer health plan. Two of his suggestions for handling the current crisis are waiving student loan payments and for Medicare to cover all medical bills during the coronavirus "emergency."
The problem with all the plans, even those passed to help during the crisis, is they are not paid for. The government is not sacrificing in other areas to finance them. They're just stacking debt on top of debt, hastening a future crash that has nothing to do with social distancing, masks and toilet paper hoarding.
The more money in the future that goes to service the debt and the more money that is promised to individuals through various payments and bailouts, the less there is for government to do the little things government is actually supposed to do like keep the nation safe and maintain its infrastructure.
Yes, extraordinary times call for extraordinary measures, but we must at some point soon return to financial stability.