Coronavirus

The Next Stimulus: Infrastructure Week, Another Rural Broadband Boondoggle, and Maybe a Sports Bailout?

It's obvious that there will be more government spending in response to the coronavirus, but distinguishing the essential from the nice-to-have is more important than ever.

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Congress has not yet finished passing the latest pandemic stimulus bill, but lawmakers and the Trump administration are already looking ahead to the next spending opportunity.

And while it is too soon to know for sure what will be included in the next stimulus bill, early indications suggest it could include a lot of questionable spending that has little to do with COVID-19. Lawmakers and administration officials have floated subsidies for government-built internet service, bailouts for state and local governments, and maybe even handouts to sports leagues shuttered by the pandemic.

"Roads, bridges, broadband, especially broadband now to rural America is very important. We've talked about incentives for restaurants, sports, entertainment because these businesses have been impacted," Treasury Secretary Steve Mnuchin said Tuesday. "And we've also, we're talking about in the case of states, we've heard from the governors and the fiscal issues of the states."

As Mnuchin noted, infrastructure spending figures to be the centerpiece of the so-called "phase four" stimulus—following an initial stimulus package passed in mid-March, the record-breaking $2.2 trillion Coronavirus Aid Relief and Economic Security (CARES) Act, and this week's $484 billion package aimed at refilling a program providing loans to small businesses.

President Donald Trump has been pushing for a multibillion-dollar infrastructure program since the 2016 campaign, and the coronavirus shutdown provides the perfect opportunity. It would be a massive jobs program at a time when millions of Americans are likely to be looking for work and a bipartisan political win for Trump as he heads into reelection. He's also calling for a "phase four" stimulus to include a payroll tax cut. It's something Trump has wanted for a long time, but it would likely have a limited impact on the coronavirus recovery.

A limited infrastructure bill is the most defensible part of the plan Mnuchin outlined on Tuesday—though it would be more defensible if the country wasn't $23 trillion in debt and facing the prospect of a $4 trillion budget gap this year. Even so, it's probably a bad idea says Chris Edwards, director of budget policy for the Cato Institute.

"A federal infrastructure package would probably cater to lobbyist demands, not market demands," says Edwards. "It would likely include billions of dollars for transit, even though the ridership outlook is grim."

And, again, that's the most defensible part of this plan.

A bailout for state and local governments is likely in the offing too—already, Sens. Bill Cassidy (R–La.) and Bob Menendez (D–N.J.) have unveiled a proposal to spend $500 billion helping state and local governments avoid a coronavirus-induced budget crunch, and Speaker of the House Nancy Pelosi (D–Calif.) wants to spend $4 billion to help states get vote-by-mail infrastructure in place before November's elections.

But elections are run by the states, and that means states should be responsible for figuring out how to conduct and pay for them. While state and local governments are more limited in their ability to borrow in response to a crisis than the federal government is, they are not helpless. At a time when the federal government is putting trillions of dollars on the national credit card to help businesses and workers survive this crisis, state and local governments should be expected to shoulder their own burdens.

Rural broadband should be an even lower priority. The Obama administration set aside $7.2 billion for the development of rural broadband in the 2009 stimulus bill, but the money was not spent wisely. One study of three parts of the country that received rural broadband grants—far-flung regions of Montana, Kansas, and Minnesota—found that the government spent about $350,000 per household connected to high-speed internet. The median home price in those areas? Between $94,000 and $189,000.

In the years since the Obama stimulus, the market has done a far better job of getting rural Americans online. And with the expansion of high-speed mobile internet service, there is even less of a reason for the federal government to blow billions of dollars on laying fiber optic cables to the boondocks.

The same can be said of the idea to bail out sports teams and leagues, or for "entertainment" businesses in general, as Mnuchin floated on Tuesday. While professional sports are suffering from the coronavirus shutdown—leaving players, staff, and stadium workers out of jobs for an unknown period of time—public efforts should be focused on softening the blow for workers, not helping their employers avoid restructuring. Indeed, bailing out professional sports would be no better than Trump's ill-advised (and thankfully scrapped) plan to bail out the cruise industry. And where do you draw the line? Should movie theaters get federal cash to stay open? Should casinos? Bankruptcy is ugly, but it's better than a government bailout that isn't even guaranteed to keep them out of bankruptcy.

Governing requires setting priorities, and that's never more important than during a crisis. Members of Congress have a political incentive to spend and spend and spend, but there simply isn't enough money to go around—in fact, we passed that point a long time ago.

"I do believe it makes sense for the government to provide support to businesses and families that can't make it through this," Sen. Rand Paul (R–Ky.), who voted against this week's coronavirus bill, said Tuesday on the Senate floor. "I don't want to see this massive accumulation of debt destroy this great country."

Lawmakers would do well to keep one eye on the mounting debt as they consider their next steps. Thankfully, Senate Majority Leader Mitch McConnell (R–Ky.) seems to be considering that trade-off.

"We can't spend enough money to solve the problem," he said Tuesday. "Let's weigh this very carefully because the future of our country in terms of the amount of debt that we're adding up is a matter of genuine concern," he added.

It's obvious that there will be more government spending in response to the coronavirus, but separating out the essential from the nice-to-have is more important now than ever.

NEXT: Libertarian Party Wins COVID-19-Related Lawsuit Over Ballot Access in Illinois

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  1. Bailing out sports? Gross.

    1. When fascism comes to America, it will be wrapped in the flag and carrying a football. Go Patriots!

      1. Fuck the Patriots! Lol

      2. That move from Boston to Tampa Bay for the Patriots is getting weird.

        1. Not when you factor in Florida massage parlors.

  2. And where do you draw the line?

    In the sand, Grasshopper.

  3. I think that the complications with going back to work in large crowd may affect the effectiveness of the bailouts meant for sports and entertainment.

  4. There will never be a vaccine for Cronyvirus.

    1. Sure there will. Just not one for the “Bogeyvirus”.

      1. Thanks for reminding me. I need my cooties booster.

  5. During these troubling times, I wonder what a sage political leader like Hillary Clinton would do. Probably ask Bill for help first.

    1. Imagine all the good we could do of we gave the Clinton Foundation 1 trillion dollars.

  6. Rural broadband should be an even lower priority. The Obama administration set aside $7.2 billion for the development of rural broadband in the 2009 stimulus bill, but the money was not spent wisely. One study of three parts of the country that received rural broadband grants—far-flung regions of Montana, Kansas, and Minnesota—found that the government spent about $350,000 per household connected to high-speed internet. The median home price in those areas? Between $94,000 and $189,000.

    Not to mention that at least in the far-flung regions I frequent, no one is clamoring to get their TikTok memes delivered to their phones faster. Broadcast is fairly ubiquitous and cable/satellite is almost certainly a necessity but, while they certainly enjoy Netflix once it became available, if you told them the infrastructure cost $350K per household (not to mention turning over all your personal info), the vast majority would find something else to do with their time.

    1. The night sky is full of those Elon Musk router satellites. Can’t the hicks and get their internet through those once they go live?

  7. especially broadband now to rural America is very important.

    You betcha! Rural Americans pay substantially less for housing, food and insurance; they pay the same for a first class stamp as the rest of us. The very least Washington can do is subsidize their choices with faster Pornhub access.

    1. It’s a small price to pay to keep the deplorables down on the farm and out of our great metropolitan centers like NYC, don’t you think?

      1. It’s a small price to pay to keep the deplorables down on the farm

        Yeah but how you gonna keep ’em down on the farm once they’ve seen Karl Hungus?

        1. Well shit. I guess you’re right. That’s what happens when you don’t think things through.

  8. “Within 24 hours, video of the gig had been viewed 9.44 million times across platforms.”

    The Dropkick Murphys played a show on St. Patrick’s Day that drew that many eyeballs–that’s an incredible number. A punk rock band like that would never play to that many people in a sports stadium, and I can’t help but wonder if the future of sports will be more like The Dropkick Murphys playing to no audience or a small audience to be broadcast on Twitch in the future and less like 60,000 fans sitting in a sports stadium.

    The experience of watching sports on cheap, gigantic, high quality screens was already keeping sports fans at home–because it can be a better, less expensive experience than going to the game. 20 years from now, it wouldn’t surprise me if new stadiums are being built for less than 10,000 spectators, all of whom are in luxury boxes, with the stadium mostly designed to optimize digital viewing experiences for broadcast to millions of spectators for Monday Night Football.

    Why should the taxpayers bail our sports leagues with legacy stadiums amid that accelerated transition to a digital experience in the future? Again, this is creative destruction by other means. Ever hear the old saying about how necessity is the mother of invention? Sports leagues innovate because they have to, and the more money we squander on saving them from the necessity of innovation, the less they’ll innovate.

    The only racing I care to watch is MotoGP, and they usually only have one or two races in the United States every year. I haven’t been to a race since the last time they held one at Laguna Seca, and the fun of going there had little to do with watching the race. They have a MotoGP app on Roku, and if I really cared about the race, I wouldn’t go to see it live. I’d watch it at home.

    1. I can’t imagine live shows not being live shows. I watch the Phish Dinner and a Movie series they have been putting on for the last few weeks, airing old shows on Youtube. It’s a little fix but I need to see some live music as soon as the lock down is lifted. It’s just not the same as being there with 20-50 thousand others. When I was an avid Ravens fan, going to ever game, I would feel the same way. Same with comedy shows. Being there is part of the experience that can’t be replicated at home. And as time passes, I think the fear of crowds dwindles as the excitement of life finds its way back into our lives.

      It would be great though if this resulted in cities and states not paying for stadiums because of public health.

    2. Yeah, why should we leave our homes and do anything now because of tech. Maybe they can just feed you through a tube to your fat gullet whilst you get your “experiences” digitally.

  9. Oh hell yes! Nothing like designating a gazillion dollars to infrastructure when all the equipment and supply chains are closed.
    Excellent idea.
    You have to open the bars FIRST, so the workers have some where to stop for a beer on the way home.
    Only if the priority of projects is voted on by the taxpayers, and non-union labor is used exclusively.

    1. I see Speakeasys making a comeback.

  10. funny they think broadband will stop a pandemic.

    1. Actually, they think if they get the rubes hooked on Facebook Tweets, the will become mindless robots like the rest of us, and easier to control.

  11. We’e fucked.

    We’re so fucked.

    1. No worries; abortion is a right, and an essential business.

  12. money printer go brrrr!

  13. “It’s obvious that there will be more government spending in response to the coronavirus, but distinguishing the essential from the nice-to-have is more important than ever.”

    So you’re hoping the right Top Men are going to be in charge for this 5-year plan?

  14. “President Donald Trump has been pushing for a multibillion-dollar infrastructure program since the 2016 campaign,…”

    Trumpulus is only an even more bigly pigly version of Obama’s Porkulus.

    Trump is Obama’s Third term.

    1. “Trump is Obama’s Third term.”

      Then that makes Joe Biden his bitch. Fair enough.

  15. So a politician walks into a bar and the bartender asks him “What’ll ya have?” The politician turns to the crowd in the bar and says “A round for everyone in the house!” there’s a massive cheer and everyone lifts their class and claps. The bartender smiles and claps too, then leans a little closer to the politician and says “This going on your tab?” to which the politician replies, “Of course not. It’s on yours!”

    1. THAT needs to be turned into an editorial cartoon and plastered on every ‘opinion’ page in the US.
      Standing O! Take a bow!

  16. Ever notice how any and all bailouts go to businesses and they act like people don’t matter. Just the businesses. Remember who locked everything down, the ignorant governors. They are creating an economic nightmare that will play out for years. Hey governors, we have a right to run businesses and/or work to provide for our families. It is pure evil to deny anyone of such right. This is NOT the Black Plague. More will die of suicides in the coming years than the virus, but you won’t bother counting them or caring.

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  18. At this point what difference does it make?

    We have spent all the money. Might as well have shiny new monorails as we plunge into a depression!

    We have been a socialist country for awhile now; time to reap the rewards…..stock up in ammo.

  19. The government’s idea of a small business is much bigger than most people consider a small business. For example, my barber owns his own business and is self-employed. No one else works for him. Will he get a bailout?

  20. NOT A SINGLE PENNY TO BAIL OUT PUBLIC SECTOR UNIONS!!!

  21. First let me be clear I am not advocating for the bailout or any provision of it. I will state that with three kids doing distance learning and me working from home on my day job (when not working on my ranch) better broadband (or any since my town doesn’t have the capacity yet) would be great. I am getting tired of slowdowns and lock ups while working and my kids watching “homework” videos.

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