Stimulus

Do You Feel $9,000 Richer, Punk?

The bad policy and worse politics of coronavirus stimulus spending

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As Congress squabbles over the next multitrillion-dollar phase of coronavirus relief, it's worth asking the question: Do you feel $9,000 richer since March?

Unless you were an early investor in the vaccine-chasing Moderna Therapeutics, the answer is likely "no." And yet the estimated $3 trillion price tag on the first four batches of COVID-19 stimulus, divided by 330 million increasingly underemployed U.S. residents, equals $9,000 per capita, which has ended up where government payouts usually go: to entities with better connections than you.

There was the $50 billion to airline companies—$25 billion in loan guarantees, $25 billion in grants—which promptly slashed worker hours while burning fuel on empty flights at the government's request. There were the concierge-service clients of banking behemoths Citibank, U.S. Bank, and J.P. Morgan Chase, who got to the front of the line for the feds' $349 billion loan program for small businesses. And don't forget the Federal Reserve, which is propping up Wall Street by doing what Fed Chair Jerome Powell recently characterized on 60 Minutes as "a multiple of the programs that were done during the last crisis."

You would think that politicians and other elites would have learned from their never-popular response to the 2008-2009 financial crisis. Back then, the bailout/stimulus combo averaged out to a little less than $7,000 per U.S. resident, not that normies saw much of it. With few exceptions, the money went toward propping up banks, socializing the losses of private capitalists, and backfilling the fiduciary irresponsibility of states.

If the federal government didn't pass a huge emergency bailout, then-President George W. Bush warned in September 2008, "More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs."

Well, all of that happened anyway, as did the most anemic recovery in post-war history. As a direct consequence, so did populist anti-bailout political movements on both the right (Tea Party) and left (Occupy Wall Street). If the response to the 2008 financial crisis helped bring us Donald Trump and the rise of Sen. Bernie Sanders (I–Vt.), what might an even bigger and less effective response to the more injurious coronavirus bring?

"Millions of Americans are seeing that the government spent trillions of dollars and still didn't get it right," Rep. Justin Amash (L–Mich.) told me last month, during his brief flirtation with the Libertarian Party presidential nomination. "They didn't get help to the people who need it most. Instead, most of the assistance went to people who have great connections, who run big corporations. Those people, they got it really fast."

Why does this happen every time? As economists like to say, incentives matter. Sure, Congress could have just mailed us each a $9,000 check—or maybe $7,000, spending the rest on medical system capacity. But then the two major parties wouldn't have been able to go back to their favored and most supportive constituencies and brag about their special treatment. Sure, there might be an eventual backlash, but as President Trump once said (before COVID-19) about a future debt crisis, "Yeah, but I won't be here."

New York Gov. Andrew Cuomo (D), that inexplicable media darling, complained in a recent press conference that all these helicopters full of money—government spending in the U.S. has doubled over just the past two decades—hasn't managed to, you know, produce anything. "Every president has talked about the need to rebuild our infrastructure, our roads, our bridges, our airports," Cuomo said. "Our country doesn't build airports anymore….We haven't built a new airport in 25 years."

Governments, unlike businesses, have guaranteed (if fluctuating) revenue streams, in the form of taxes. The federal government has the added leeway of borrowing, apparently without limits. The more of GDP that gets soaked up and spit out by this process, the more that economic and political activity will be about directing and capturing the flow to line the pockets of bankers, corporate executives, and union bosses.

We can no longer build fancy bridges or even new subway stops, but we sure as heck can pad the pensions of transit employees and make sure the Lakers get a loan.

So what does Congress do for an encore? House Speaker Rep. Nancy Pelosi (D–Calif.) wants to double down on another $3 trillion. No, we'll need $10 trillion to stave off another great depression, they tell us in The Atlantic.

Maybe by the time they reach eleventy trillion, we might see more than a $1,200 check. But I wouldn't bet on it.

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  1. The best way to stimulate the economy is to do what we Koch / Reason libertarians advocated long before the #TrumpVirus hit — open the borders.

    #ImmigrationAboveAll

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      1. I don’t believe you.

    2. Open borders is national suicide.

      What country became more successful by opening its borders to poor migrants?

  2. I have a way we can stimulate the economy. How about we let people out of their houses and go back to work and make their own money? How about we just let things go back to normal and accept the 1 in 300 risk of dying if you actually were to get the Kung Flu?

    It would save us having to send people money on welfare and it is an idea just so crazy it might work?

    1. Life is too risky to let people live their lives.

      1. Plus work is oppressive.

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    2. Bad idea.

      I read that since black and brown bodies are disproportionately dying, anyone who wants to end the lockdowns is a racist.

      #LockDownTheInterior
      #OpenTheBorders

      1. Men are also the larger set of victims, but the media has made sure we understand it is women truly bearing the brunt of the virus.

        1. Of course. Imagine being a woman working in a hospital, risking your life every day, and only getting paid 77 cents for every dollar your male coworkers are making.

          #WageGap

          1. So how is your benefactor doing this week? Up, down, stayed the same?

            1. Please see today’s Reason Roundup comments for the latest tragic news about Charles Koch’s collapsing fortune.

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          2. But of men have been laid off more…. and are making 0.00 dollars. Are women now earning -0.33 dollars for every hour worked??

          3. Everything is so terrible and unfair.

          4. You do realize that difference is an average, and that there’s virtually no difference when comparing apples-to-apples?

        2. well yes since once the man dies the woman has to pick up all the pieces that the dead asshole man left unfinished

      2. When it is actually men dying at half again to twice that of women.

    3. Why would we ever need to work again. We solved the scarcity problem once and for all! Money printer go brrrrrr.

      1. it doesn’t even go brrrr that guy last week said it was digitally created … maybe by Biden he’s into digital

        1. The brrrr sound is from the CPU fan as the Treasury hard drive heats up.

          1. Nice

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    4. Yeah, no thanks. If we hadn’t wasted the time during the quarantine doing nothing, we’d be well our way back to normal. Instead, my state just had its peak cases recently. I’m one of the people who will die if I catch it. I’m not about to die for your ideology. Let the experts decide. Leave idiotic politics out of it.

    5. LET?! Just go! Those businesses that don’t allow people in or discriminate on the wearing of useless masks can lose the business. Those that open can win business!

  3. It’s weird you brought up Amash in this article but then ignored the Welch interview where Amash said he would still have spent, just not the way it was spent.

    In an article about spending, you defended against spending by using a guy who said he would have spent. Just a strange argumentative choice.

    Would have preferred we a) didn’t do the lockdown in the first place and b) utilized the payroll tax cuts initially proposed instead of cash giveaways.

    But the Senate chose C) pay people more to stay home than they made working. And then another 2 trillion to favored entities.

    1. There are shades in between full-evil and full-good.

      1. Which the article doesnt really address. Neither does your comment. Amash never clarified his plan to distribute, bug like with all government distribution methods, connected players do better. Which is why general tax cuts are better. That isnt what Amash advocated for though.

        So your comment isnt really saying anything.

        1. And neither did your comment. That’s what my comment pointed out, and you copied my meaning.

          1. My commentiterally stated my complaint in including Amash. Try some logic next time sweetie.

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    2. Clearly, Amash implied that the money should have gone straight to the people, instead of the corporations.

      1. The people that feed the corporations? What; is everyone gonna stop shopping at Amazon because they got a stolen check? It really makes no difference who ends up with STOLEN money – it’s still STOLEN money from every citizens labors.

  4. Those of you who think there isn’t any significant difference between the two major parties because neither of them are principled libertarian capitalists, please explain why Pelosi’s bill to spend another $1 trillion to state and local governments in the House being laughed out of serious consideration by the Republican Senate and President Trump is an insignificant difference.

    1. Even the Cato Institute seems to get it!

      “The Democrat’s 1,800-page bill proposes a fourth round of stimulus money, this time allocating an additional $1 trillion to state, local, territorial and tribal governments.

      . . . .

      “We must think big for the people now, because if we don’t it will cost more in lives and livelihood later,” Pelosi said. “We’re presenting a plan to do what is necessary to deal with a chronic crisis and make sure we can get the country back to work and school safely.”

      But Cato Institute economist Chris Edwards said it’s the wrong approach.

      “States are not subdivisions of the federal government. They should tackle their budget challenges by tapping rainy day funds, furloughing nonessential workers, and cutting low-priority programs,” he wrote in an op-ed published by Fox News.”

      https://www.thecentersquare.com/national/democrats-3-trillion-bailout-bill-is-doa-republicans-say/article_953eb8ee-952b-11ea-a670-0f1c2b8d2c2d.html

      That story is from May 13, 2020.

      The bill was a non-starter. It’s an ex-parrot, and we can thank the Republicans being in control of the Senate and Donald Trump being in control of the White House for that.

      1. Pelosi flat admitted yesterday this next bill is an attempt to change society, that she was right to not let a crisis go to waste.

        1. I wonder how many boyfriends Nancy went through, trying to find one that could handle the changes she imposed on him.

          1. Carol Baskins current husband would have been perfect for her. I don’t know if a bigger cuck has ever existed on the planet.

            1. To be fair he’s probably learned that acting up is a one-way street to being turned into tiger food.

          2. I bet them titties were really something 50 years ago.

            1. Yes, she was a beauty. I have to think that’s probably how she got where she is. Wonder how many secret abortions she’s had!

      2. It wasn’t so much the amount but what Nancy proposed to spend it on. Trump’s been advocating for that trillion dollar plan that Cuomo laid out above before all of this. I’d bet that by the end of this we get a big government infrastructure plan rushed out the door for “shovel ready jobs”.

        But yeah divided government is good at stopping some of the more ludicrous proposals getting jammed down our throats.

        1. Hmm, the concept of divided government suggests that both the divisions are made of idiots, and the only thing saving us is gridlock.

          1. Yeah pretty much my feelings. Until the idiots all get on board for the same thing; then we all fucked*.

            *Noted exception, Newt and Bill’s budget deal. Can’t think of any others in recent history.

            1. “Can’t think of any others”

              Freedom Fries

          2. Not necessarily. Opposing views are what creates debate and compromise. Not that there’s a reasonable compromise with Democrats, these days, and republicans are too priggish on government control of sex and morality, in spite of being no different to Democrats in their personal lives. They all spend too much and defy the Constitution.

        2. What ever did happen with those “shovel ready jobs” we paid for in 2009?

      3. If one man sticks a shotgun barrel in your mouth and the other has tied a bomb to your neck which one is trying to kill you more?

      4. I’m no fan of how states manage their budgets and taxes, but I disagree somewhat with the Cato writer. If the federal government stuck to federal responsibilities and the concomitant revenue-raising, he’d have a point. But the Feds don’t. They’ve stuck their noses, and spending, into areas in which they have no business: education, housing, local roads, etc. etc. As a result, the states have less ability to raise revenue. There’s only so much blood you can get out of us turnips. Would the states use this increased flexibility to wisely tax and spend? Most certainly wouldn’t. But we shouldn’t expect the states to sit idly by while the Feds rake in a vastly over-appropriate share of our income.

    2. Partisanship politics. The Dems and GOP will gladly screw each other.

    3. please explain why Pelosi’s bill to spend another $1 trillion to state and local governments in the House being laughed out of serious consideration by the Republican Senate and President Trump

      All that money would go to CA, IL and NY, the most corrupt governments in the country to buy the votes of the public employee unions.

      I know from Oregon’s own statistics that 1 out of 8 employees works for the government in that state. That means 7 of us pay the salary and the ridiculous pension and benefits of every 8th person. And that 12.5% of the population have family and friends that support them, making them a voting block that cannot be ignored and cannot be pissed off if you want to be electable.

      When the Tonys and Jeffys say DeRps are all the same, they reveal themselves for the socialist rubes they really are. Sure, Rs are parasites, but the Ds are parasites that will kill the host.

  5. Just “crumbs”.

  6. “The scope and speed of this downturn are without modern precedent,” Federal Reserve Chair Jerome Powell said on Wednesday. “Additional fiscal support could be costly but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.”

    “COULD”?! “IF”?!

    This is why Powell “earns” his salary.

    1. Economics ain’t chemistry. Monetary policy isn’t an exact science and neither is fiscal policy, given the many unintended ramifications of both fiscal and monetary actions on the economy. Hence the “could” and “if”.

      1. It’s all voodoo science, since money has no basis. Taxing is symbolic. Just a show of value created supporting the government, though the working people’s taxes don’t approach government spending.

  7. Lol. Now it’s a chronic crisis.

    1. It’s the counterpart to the chronic war spending

    2. Paging Dr. Dre, your needed in the OR.

  8. At this point I am looking forward to insolvency. It’s too depressing to watch the tab run upwards forever. Eventually someone is gonna pay; better do it now.

    1. Nah, let the kids pay

  9. This is just crazy. I live in the Poeple’s Republic of NJ, where we have raised public sector double-dipping and union feather-bedding to a fucking art form. This behavior should not be rewarded.

    Phailing Phil Murphy made many bad decisions. He should bear the consequence. He is a lying sack of shit.

    1. So NJ should get more “art” funding?

      1. Someone somewhere probably considers ‘lying sack of shit’ a piece of art…

        1. LOL

  10. We haven’t built a new airport in 25 years
    Not true. Williston Basin International Airport opened October 10, 2019. Even if true, do we need new airports? Most airports are updated not replaced (both Dulles and Reagan have been updated in the past 20 years with more updates in progress).

    1. We haven’t built a pyramid in 5000 years!

      1. That’s a shovel-ready job.

      2. I know of two:
        Luxor, Las Vegas NV opened October 15, 1993.
        Walter Pyramid, Long Beach CA opened November 30, 1994.

        1. Yeah but the Stone Masons Guild didn’t get a cut so those don’t count.

    2. But that airport is probably surrounded by mostly deplorables and bitter clinger types, and they don’t matter so that airport doesn’t matter either and therefore doesn’t count.

      1. I propose New York build Manhattan International or whatever they want to call it.

        1. And I propose those dumb tax cattle in Kansas pay for it. Who’s with me!

    3. MidAmerica St. Louis Airport built in 1997 on the Illinois side to supposedly reduce air congestion at Lambert in St Louis.

      Place never makes any money and for most of its life had fewer than 50k passengers a year. Its just now getting 200-300k a year, or it was until corona cooties.

  11. Thanks to Welchie Boy’s fellow international socialist globalist lefties who decided to use the Wuhan Flu as a justification to practically destroy the global economy in order to 1) hurt Trump, and 2) begin the implementation of Agenda 21, we’re no longer borrowing a mere one trillion dollars a year like we were before; we’re now borrowing TWO trillion dollars a year!

    Well done, assholes. Well done.

  12. The money is nearly worthless anyway. It’s been inflated away and the debts hidden and dispersed. Going off on them printing more and taking in debt is hopeless. Not one single person in DC cares. It will get some passing mention during the election but neither candidate has a leg to stand on here. So there will be a cease fire on that issue.

    Libertarians are worried about the wrong things as usual.

    1. Value is being created all the time. Shouldn’t money grow with value? Corporate greed is at an all time high, though, so inflation causes common people to be less able to purchase.

      1. So long as those corporations are supplying free-will people what they desire – your beliefs in “corporate greed” are baffling idiotic.

        The only “greed” in “corporations” is “government” in which free-will gets trumped by UN-constitutional law. Think they make too much? Go make SOMETHING and compete. Those are very basic laws of betterment.

  13. >>Not one single person in DC cares.

    the answer to Ken’s “significant difference between the major parties” above

    1. supposed to be a response to Mondays … and “an” answer not “the” so much

  14. I’ll see none of it.

    But my wife is going to get her $9k. Maybe more. She earned $300 total last year, which qualified her for $758/wk in unemployment as a displaced gig worker. The base 13 weeks gets her there.

  15. Ever since I heard about Betteridge’s Law of Headlines ( https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines ) on a Reason podcast, I check… yup, Matt’s headline is not an exception.

  16. Did Nancy get her tits lowered?

    That photo’s got to go.

    1. Got to be a lot of silicon in there for that much volume in a dinosaur.

  17. Seems to me that it’s ridiculous to talk about stimulus here. You can’t stimulate an economy when you are holding it down with a boot on its neck. The first thing you need to do is stop deliberately killing the economy.
    This is not an economic downturn. This was a conscious choice to severely hobble the economy in totally predictable ways. This is not the natural result of a pandemic. This was a deliberate choice on the part of political “leaders”. These packages aren’t stimulus. They are wasteful attempts to mitigate some of the damage done.

    1. Protesting 40 million people out of work by putting a boot on the neck of the economy? You’re a selfish murder!

      Protesting one single person dying from a boot to the neck by burning Minneapolis to the ground? Good, fuck the police!

  18. Trickle down economics doesn’t work, until it does.

  19. I’m way more that $9000 richer since March.
    Did the economy need a $2.5T bailout?
    Possibly, but only because of the ill-considered shutdown of the economy by the government itself.

  20. With all the world printing money and nothing else, escaping the Weimar-inflation or Argentinian forever-default bears isn’t about out-running the bear, the United States just has to outrun some of the other campers.

    A really weird situation in financial history that way. United States in deceptively good situation.

  21. Very efficiently written information. It will be beneficial to anybody who utilizes it, including me. Keep up the good work. For sure i will check out more posts. This site seems to get a good amount of visitors

  22. With the NASDAQ up about 35% since the middle of March, and the way the shutdown has made it harder to spend, it doesn’t take much to feel $9,000 richer, but what will that $9,000 be worth. I hope TheZeitgeist is right about just needing to outrun the other campers.

  23. Everything is so terrible and unfair.

  24. your article is very good. thanks for telling this info

  25. Bottom line – Stimulus Money is STOLEN money. When Joe hires Mark to cut his lawn and pays him with stimulus money; Joe is STEALING Marks labor because Joe did ABSOLUTELY NOTHING in return for getting his lawn mowed.

    It a Communist Game of theft of every persons sitting dollar value. That 3,000 hours of labor you worked for just got STOLEN by politicians and isn’t going to be worth more than a single lawn cutting job.

    1. …. And when Politicians “claim” ownership of Marks labors what does that make Mark? A SLAVE of the state.

      Sell your souls to the [WE] foundation; because you don’t own you, [WE] own you.

  26. equals $9,000 per capita

    So how much did those who the actual work that added the value the created the wealth get compared to what those in Conservative Donor/Parasite class and Corporate Caliphate get?

  27. Get ready for inflation and devaluing of currency: The federal government has the added leeway of borrowing, apparently without limits. electrician in woodbridge va

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