Covid-19 Relief Ought to Be More Than Just Throwing Money Around Randomly

President-Elect Biden is proposing a big Covid-19 stimulus program: $1.9 trillion.¹  The plan includes an additional $1400 per person payment (to bring the total up to the $2,000 Donald Trump proposed in late December), additional unemployment payments of $400 per week (up from $300 in the bill signed in early January), and much more.

The $1400 payment (plus the $600 already approved), is a follow-up on the $1200 per person payment in the first Covid-19 program last spring.  Back then, the idea of giving everybody a lump-sum payment made some sense because (i) we didn’t know what was going to happen and (ii) we needed to get money to people as quickly as possible and we didn’t have time to come up with a more carefully targeted program. 

But doing the same thing now seems silly.  It’s been almost a year.  We have had lots of time to figure out a better way to do it.  Under President-Elect Biden’s proposal (and President Trump’s December proposal), 58% of the money would go to households earning $50,000 per year, including some earning upwards of $200,000, which is excessive.  Instead of mailing out checks to pretty much everybody, we need a program that focuses help where it is needed. 

It's the same way with the $400 a week of extra unemployment compensation.  It would mean a fair number of people will be making more money by not working than working.  Is that a good idea?  Are the people proposing the program even thinking about it?

A properly-targeted pandemic relief program wouldn’t waste money by giving it to people who don’t need help.  If we target the help where it is needed, there will be more money for the people who actually need help.  It’s not a matter of cutting costs; it’s a matter of having enough money to help those who really need it.

Some might ask what I suggest instead.  I’ll admit I don’t know.  I’m not an expert.  But the people in Washington ought to be, or they at least ought to have access to people who are.  Even if the Trump administration wasn’t smart enough to figure it out, Democrats in Congress should be able, by now, to come up with ideas on how to do it.  Being in Congress isn’t just about getting on TV and Facebook.  It’s about figuring out the best way to help people, the best way to get more results with the amount of money that is available.  It’s coming up with ideas and programs to ensure help is getting where it’s needed.  And then checking to see if the program is working the way it is supposed to and, if it’s not, figuring out a better way to do it next time.

You don’t get the feeling the Biden administration is doing that.  It’s been almost a year, and all they can come up with is throwing money at everybody in the hope that some of it will get to people who need it.  Sigh.
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¹ I am not sure how the costs of something like this is calculated.  You have to wonder if it has any connection with reality.

Comments

[BEatrice DeFranco]

He's only been president for a week! The argument that an extra and temporary $400 a week would cause someone to stop working is silly. People who would even consider that a good strategy are also likely to be those that would quickly go out and spend the money they're getting and keep some lube in their local economy.