Government Spending

Congress Uses COVID-19 As a Cover for an Epidemic of Fiscal Recklessness

Legislators view the disease as a license to spend like there’s no tomorrow.

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The "recovery rebates" that Americans began receiving this week supposedly have something to do with the economic damage caused by COVID-19 and the control measures it inspired. But like most of the so-called American Rescue Plan Act, these payments, which account for more than a fifth of the bill's $1.9 trillion price tag, are only tenuously related to the pandemic.

The Democrats who championed the law hope those bribes will buy them votes in the midterm elections. But you really should be thanking your children and grandchildren, because they will ultimately pick up the tab for this package and the rest of the $5 trillion spending binge that Congress claimed was justified by a public health emergency.

Individuals with adjusted gross incomes of up to $75,000 will get $1,400, while married couples earning up to $150,000 will get $2,800, plus $1,400 for each dependent. That amounts to $5,600 for a four-person family, on top of the $5,800 that such households received under the coronavirus relief packages that Congress approved in March and December.

Congress distributed that money without regard to whether the recipients had suffered pandemic-related economic distress. A Pew Research Center survey conducted last August suggests that most of them have not: Forty-two percent of respondents said they or someone in their households had lost jobs or income due to COVID-19, less than half the 85 percent of Americans who are expected to receive the latest round of payments.

Another survey found that just 15 percent of people who received the money distributed in April reported that they spent most of it; instead, they typically saved it or used it to pay down debts. Those findings cast doubt on the hope that such payments, even when they go to relatively well-off families, will stimulate the pandemic-battered economy by increasing consumer spending.

The package also includes an expanded, fully refundable child tax credit that will cost at least $89 billion—more if the temporary change becomes permanent. Like the recovery rebates, that provision applies fully to households earning up to $150,000.

Other major elements of the American Rescue Plan Act likewise have little or nothing to do with COVID-19.

The package includes nearly $129 billion for K–12 education, which ostensibly is aimed at helping students safely return to school. Yet most of the more than $100 billion in education funding authorized by earlier legislation remains unused, and the Congressional Budget Office projects that just 5 percent of the new money will be spent this fiscal year, which ends on September 30.

Congress allocated $350 billion to "coronavirus state and local relief funds" for governments that generally have emerged from the pandemic in much better financial condition than expected. California, for example, will benefit from this largesse even though it is running a surplus.

Another $86 billion will be used to bail out union-run pension funds that were already in dire straits before the pandemic. Obamacare premium subsidies for households earning as much as $350,000 annually will cost $34 billion.

Republicans, who last year supported massive, frequently ill-considered spending in the name of fighting COVID-19, have changed their tune now that Democrats control the executive and legislative branches. They uniformly opposed the latest bill in the House and the Senate, and they plan to make political hay by accusing Democrats of using the pandemic as an excuse for fiscally reckless spending aimed at achieving longstanding policy goals, rewarding their party's most dedicated supporters, and enticing voters with found money.

Blatant hypocrisy aside, the Republicans have a point. The national debt—currently about $27.5 trillion, three-quarters of which is publicly held—already exceeds the size of the U.S. economy. The annual deficit was $3.1 trillion last fiscal year and will be more than $1 trillion this fiscal year.

Continuing on this path will slow economic growth, replace useful spending with interest payments, and force tax increases, benefit reductions, or both. Enjoy your debt-financed windfall while you can.

© Copyright 2021 by Creators Syndicate Inc.

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  1. The only way to stop the cronyvirus is to lock the government down. 14 days should be enough to flatten the curve…

    1. We also need to make sure that our hospitals aren’t overwhelmed with Congresscritters.

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    3. The fences and military are in place. We could use them to keep politicians out of the country and confine them to DC. Cut off their internet and communications and drop a little food for them to fight over to keep them busy. The country would be much better off.

  2. Congress? I can tell you what this subtitle needs: “Republicans pounce on another partisan spending bill, but not as much as they should have before the election, because they didn’t do a good enough job telling us what the Democrats were going to do if they won, and now we’re shocked!”

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  3. Congress uses emergency to spend the same way Biden uses authority to smell hair

    1. Which is to say prolifically

      1. *Profollically

  4. Still tryin’ to scare people about the deficit. fuck off MarketSlaver

    1. Still maintaining your stupidity. Fuck off, slaver.

  5. Packing the Supreme Court will probably fix this problem, we should try that.

  6. But 70% of people support the bill. Therefore it must be the right thing to do.

    1. Bribing the electorate with their own money can be popular.

      1. A common technique used by both major parties.

        1. There was a guy in the WH not long ago who was trying to moderate the increase, TDS-addled lefty shit.

      2. Bribing the electorate with their kids/grandkids is apparently orgasmic for voters

  7. I see the lingering effects of TDS remain in Mr. Sullum’s system.

  8. And BTW. In the photo above, Schumer is not wearing his mask correctly. Isn’t that grounds for impeachment now?

    1. Is he on federal properties? It’s the law!

    2. Dunno, but if she had a mask about twice that size, I probably wouldn’t heave when seeing Pelosi.

  9. “Continuing on this path will slow economic growth, replace useful spending with interest payments, and force tax increases, benefit reductions, or both. Enjoy your debt-financed windfall while you can.”

    I guess one day you may be proved right but we’re still waiting and it’s been multiple lifetimes meanwhile we should definitely enjoy this.

    1. We don’t know what economic growth would be absent the massive federal debt. Further, interest payments now account for 5% of all federal spending, not just discretionary spending, and Biden just proposed the largest tax increase in decades.

      1. The people he is increasing the taxes on already pay 90% of the tax revenue. His proposal will raise it to about 92% and as in 2019 when every Democrat in the Senate voted to lower the tax on the wealthy by repealing the SALT they will repeal it and they will break even. Don’t ever believe Democrats will bite the hand that feeds them. Even the corporate tax increase from 21 to 28% will have loop holes that will be meaningless. The 2017 Tax Act that cut corporate taxes also resulted in a record of revenue collected by taxes the next year. They will raise the taxes but tax revenue will decline and they will slap each other on the back and proclaim to the uninformed and easily influenced how they stuck it to the rich.

    2. Said the guy who didn’t live through the 70’s.

    3. Americans are enjoying it and that is the cause of it continuing. And it will continue for as long as Americans keep refinancing and cashing out home equity and jacking up asset prices. Their children and grandchildren are already being harmed by that – but they don’t give a fuck about their own kin so no reason for some pol to give a fuck about them.

      There is not some bucket called gummint debt and some totally different bucket called private debt. That’s just excuse number #4856 to divert us from the reality that the cause of all this is staring back at us from the mirror.

  10. Sullum….How come we did not read of your concerns in Emote (the new name for Reason, thanks to R Mac) before the election? Oh, that’s right…your TDS blinded you.

    From my perspective, you should just hang your head in shame. This assumes you’re capable of perceiving shame. I have doubts.

  11. The annual deficit … will be more than $1 trillion this fiscal year.

    Correction: it was already going to be more than $2 trillion for FY 2021, and with this bill, it will be over $3 trillion.

    1. Don’t worry, Biden will jack up taxes to help cover the costs of the NEXT huge spending package.

      1. Taxing the rich will solve all our problems.

  12. The Democrats who championed the law hope those bribes will buy them votes in the midterm elections.

    Is it a vain hope? Perhaps — but only because by the time the midterm elections are upon us, memories will have faded. Fickleness in the electorate may wash away the sins of the political classes, but it also washes away their virtues. Naturally, then, the bribes will have to be dispensed at regular intervals, so as not to be forgotten by the people. For maximum effect, the dispensation of bribes should coincide with the commercial release of the next iPhone model.

  13. Bit late to be worrying about it, we jumped off the fiscal cliff back in 2007. After you jump, you just keep accelerating until you hit bottom.

    And, you always think you’re not to the bottom yet, until you actually hit.

    1. There is no evidence that there is a bottom. Nevermind past evidence -those people didn’t name it MMT- so it doesn’t count.

  14. Epidemic of stupid.

  15. “Legislators view the disease as a license to spend like there’s no tomorrow.”

    As long as 50.1% of the electorate doesn’t give a shit, there will be no tomorrow [at least not one in which you’d want to try to live].

    We need a balanced budget amendment [just so they stop digging a deeper hole; the national debt currently around 132% of GDP, isn’t going anywhere anytime soon] and term limits. Because this is what self serving professional grifters [aka politicians] do.

    1. The national debt is way over 132% of GDP. With this latest giveaway the debt will reach 30 trillion. GDP is around 20 trillion, except it conveniently includes government spending (6 trillion now? I lost track), so the host the parasite can live on is only worth 14 trillion. Which would put debt to accessible GDP at 214%.

      1. Here’s a breakdown.

        Note that current interest on the debt is about $400B, but that’s at an interest rate of 1.1%. (Short term.) At historically more normal rates, it would be more like 7-8 times that, at which point interest would consume basically all federal revenue.

        Repudiation of the debt is basically inevitable at this point. They just won’t call it repudiation.

        1. It’s not inevitable until it happens. Right now as you point out every 50 basis point increase in interest rates will pull $200 billion out of the productive economy and into the FIRE sector. Since they are unlikely to be able to increase debt (the only way they can grow) in the short term when interest rates increase, it will simply choke the economy until interest rates fall again. That’s been going on in Japan for 30 years now with no signs of it stopping there and still a hell of a lot more debt to choke on there than we have here.

          Funny thing is – this subsidy of interest rates – going on for 25 years even in the US – has produced more central planning than ever succeeded in the USSR – with no pushback at all from supposed advocates of capitalism/free markets. And it can’t end.

    2. The basic problem is that, in a democracy, once borrowing to buy votes is on the table, the politicians unwilling to do it will ALWAYS be outbid by the ones willing to do it.

      The only way to defeat this dynamic is to get the public to vote on whether the budget should be balanced, not how much spending and taxes there should be.

      But the politicians getting elected under this dynamic don’t want to risk not getting elected under a different dynamic, so they won’t permit any constraints on borrowing.

      Back in the 90’s, the Republicans promised a vote in Congress on a balanced budget amendment. They brought several versions to the floor for a vote, and coordinated things so that everybody who needed to be able to say they voted for it had voted for one or another version, without any one version getting enough votes to be sent to the states.

      And that was the last time they even pretended to do anything about it.

      1. The only way to defeat this dynamic is to get the public to vote…

        Voting can never be the solution to a problem where voting was even an indirect cause. People don’t change much over the age of ten or so. And a generational change, which can happen, would in this case require parricide and that doesn’t seem to be happening

  16. “…just 15 percent of people who received the money distributed in April reported that they spent most of it; instead, they typically saved it or used it to pay down debts.”

    As if total spending is the only valid measure of the health of the economy. People increasing their savings and paying down their debts also makes their situations better and the economy stronger.

    Except that it’s all borrowed money the taxpayers will have to pay back later, so it’s all a mirage.

    1. You saved yourself at the end there.

  17. The command and control “democrat” party are executing the Cloward-Piven strategy of never allowing any crisis go to waste as they march forward with their third-way socialist economic plan to control industry and the people for the benefit of the State.

    1. Yep. And furthermore, the entire show is being run by America’s first shadow president, Barack Obama, from his heavily defended eight million dollar bunker that sits barely a couple of miles from the White House.

      It’s becoming fair to wonder at this point if this fucking asshole intends to still be running America when he’s n his eighties and is smoking through the hole in his neck like the Cigarette Smoking Man from the “X-Fikes”.

      1. Just can’t seem to get over that we elected a black guy President. Let it rest.

        1. You can go soak your head. In dry ice.

        2. “Just can’t seem to get over that we elected a black guy President. Let it rest.”

          You should take your own advice, re: D.J.T.

  18. Gee, there was a guy who tried to limit some of the damage, but he sent out mean tweets, which outweighed those efforts, right?

    1. Jesus fucking Christ you’re a goddamn cultist and it’s embarrassing.

      Yeah, that’s all Trump did wrong, be rude on Twitter. Never mind that you wanted to lynch Obama for saying “57 states” and wearing a tan suit.

      The time he was caught on tape admitting to lying to the country about the severity of the pandemic because he was worried about his poll numbers? It’s only hundreds of thousands of dead. Nothing like canceling Mr. Potato Head!

      1. “…Yeah, that’s all Trump did wrong, be rude on Twitter. Never mind that you wanted to lynch Obama for saying “57 states” and wearing a tan suit.”

        Folks, try to avoid catching TDS. Asinine comments like this can result.
        Fuck off and die, TDS addled asshole; more to follow.

      2. “The time he was caught on tape admitting to lying to the country about the severity of the pandemic because he was worried about his poll numbers? It’s only hundreds of thousands of dead. Nothing like canceling Mr. Potato Head!”
        No, he was never ‘caught on tape’ doing so; TDS-addled asshole got shitted again by NYT.
        It’s possible TDS-addled asshole is confused and doesn’t realize that Trump caused none of those deaths for any reason but that Cuomo is directly responsible for some 15,000 deaths in the hopes of keeping Trump from being re-elected.
        TDS-addled assholes are nothing if not ignoramuses; Tony, turd and WK prove it every day of the year.
        Fuck off and die, TDS-addled asshole.

  19. I would submit that looking at either party to stop spending is a useless effort. The only real chance is looking to build up a moderate middle from both parties. That will entail compromising, raising taxes and cutting spending. But that is best chance. The far left and the far right are out to spend what they can as fast as they can.

    1. “I would submit that looking at either party to stop spending is a useless effort…”

      I would submit that your TDS-affliction means your comments are pretty much NWS.

  20. Good news! Biden wants to raise taxes for the first time in three decades. Fiscal anxieties calmed. You’re welcome.

    1. Thus guaranteeing another Republican rout in 2022. Let’s hope they pass some gun laws too so conservatives can pick up more seats.

      You guys never learn.

      1. So taxes should never go up ever otherwise QAnoners will destroy America. Governing by threat, Mitch McConnell has taught you well.

        Newsflash hotshot, Trump singlehandedly destroyed neoliberal economics on the Republican side. They’re the ones who have to worry about reelection for sticking to their evil plutocratic bullshit everyone including their own insane voters can see straight through.

        1. taxes should never go up full stop.

          1. Well that’s just silly brain-cancelling dogmatism.

            1. taxes are raised to “pay” for pet projects but it’s just laundering our money up the chain to the representatives. congress knows no problem to small or large to never solve.

              war on poverty is 56 years old how are there still impoverished with all the billions spent?

              1. Poverty was permanently reduced by mid-20th century reforms. Not eliminated, but the good thing is there’s a very simple cure for poverty.

                1. Eating the poor?

                2. working?

                  1. You think a free society is one that forces people to sell their labor at market prices, without any concern for human well-being whatsoever (libertarianism).

                    Put away your books children, there’s a factory that needs tiny hands.

                    1. Ahh….that explains the left’s open border policy. They are looking out for Americans and American small handed.
                      If you get an education and higher education and or training for an occupation you actually want to work at is that looking out for your own welfare or must we rely on the government to take care of that?

                    2. “…You think a free society is one that forces people to sell their labor at market prices, without any concern for human well-being whatsoever (libertarianism)…”

                      It takes a truly enfeebled ‘intellect’ to produce a pile of shit like that.

                3. “Poverty was permanently reduced by mid-20th century reforms.”

                  You.
                  Are.
                  STILL.
                  Full.
                  Of.
                  Shit.

        2. I would suggest cutting spending but I hate the sight of lefty brains splattering when heads explode. Their leader Pelosi has already settled the question when she proclaimed “You cannot cut your way to deficit reduction.” Apparently we need to double down on spending. A couple more bills like this and we will be free from debt.

          1. dan, that is unassailable logic. i have forwarded your contact info to the DNC for their executive advisory council. perhaps you should act as their director of economic analysis and strategic planning. your future is bright there.

    2. Assuming the tax increases will raise the revenue they hope for (they won’t) they won’t even come close to covering the increases in government spending he’s planning on, let alone balancing the budget for existing levels of spending. And that completely neglects the economically depressing effects of high taxation that will put many out of the job and on welfare, lowering tax revenue and increasing government spending further. The tax increases are a way to appease the left’s class warrior base, not a real attempt at balancing the budget.

  21. dude c’mon they were maniacs long before there was a covid to blame it on.

    1. that was one of my first thoughts…those dopes need no reason to behave like retarded 7 year old kids who found a wallet

  22. Gee, wonder what happened to that POTUS who wouldn’t have signed off on all of the pork in the latest scam . . ?

    Oh. Yeah.

  23. I think we simply have to trust the wisdom of Speaker Pelosi. She has already proclaimed “You cannot cut your way to deficit reduction.” You have to spend your way to deficit reduction. If you don’t understand then you are not an economic expert as she is.
    We can not argue now because the voters have chosen or possibly the Democrats stole the election but either way they are in power. Everyone was for the stimulus check part of the bill and most have no idea what else is in it. If the same bill had not offered the bribe to get votes I wonder how many would have actually supported the “This is a tremendous opportunity to restructure things to fit our vision,” bill? If you think this one is bad just look to the next few coming. HR1 is a good example of naming a bill something it actually accomplishes the opposite. For the People Act of 2021 should be called Against the People Act of 2021.

  24. When you think of all that the money didn’t buy, it wasn’t popularity.

    But until the Supreme Court hears cases made of far-reaching “political bribery,” it’s not much other than punishment for eliminating pork-barrel spending and getting Congress in trouble over scandals with savings & loans and check-writing, getting them to balance the budget, and holding their look-alikes up at airports.

  25. The federal coup is turning the USA into a communist country right before your eyes via the ‘fiat’ dollar method. This is ALL unconstitutional!!! As a Republican I could slap the sh*t out of Trump and the GOP for going along with the “Cares Act” — but considering the Democratic PROUD support of a full-on National Socialism (Nazism) and communist what’s really “hypocritical” is pointing a finger at the GOP while IGNORANTLY ignoring the the true Nazi Regime of the left and it’s full-speed towards the USA’s destruction.

  26. YEAH, THAT’S WHAT THEY USE! they also use the start of a new work week, the daily sunrise, the coming and going of the tides, the further drying of nancy pelosi’s cooch…any old reason is plenty. no need for a good one.

  27. I already don’t see a big difference between the two parties. Only their friends are different (and I am not 100% sure about it too).

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