The Covid relief provisions in this bill are immensely popular – they provide $600 direct cash payments to individuals earning up to $75,000, (plus $600 per child), a $1,200 per month bonus to unemployment benefits, and $325 billion in PPP forgivable loans to businesses.
But I cannot in good conscience vote for it. When something seems too good to be true, it usually is.
If the aid were targeted to those who have been devastated by the lockdowns, it might be justified. But the bill makes no such distinction. Neither the personal nor first-time PPP grants are contingent on the recipient being financially harmed by the lockdowns. (Although the second round PPP grants do to some extent). The aid is wholly inadequate for those who were harmed and wholly unnecessary for those who weren’t. In effect, this becomes a massive wealth transfer from victims to non-victims.
For example, the waiter whose income has been slashed will get the same $600 as the government bureaucrat who’s been enjoying a steady paycheck at home. A thriving law firm qualifies for the same first-time PPP grant as a restaurateur who has been decimated.
Similarly, the $300 weekly unemployment bonus means that the minimum wage grocery store clerk who shows up at 4:00 every morning and works a full shift gets paid LESS than their roommate who stays home and collects unemployment.
The bill is inequitable and will have to be repaid from the future earnings of all Americans, making the post-lockdown recovery more difficult and prolonged. It is combined with an omnibus spending bill that further widens the deficit, bringing our nation closer to a debt crisis that has destroyed so many nations before us.
The covid portion of the bill alone will require borrowing $900 billion, about $7,200 that an average family will have to repay through direct taxes, tax-driven price increases, lower wages or inflation. (Although $429 billion is “reprogrammed” from the earlier CARES Act, it doesn’t change the fact that it is all borrowed money that must be repaid.) Much of it will fall on young people in the years ahead, who are least at risk from covid and have already borne the brunt of the lockdowns.
Less than a year ago, Americans enjoyed the lowest poverty rate in 60 years, the lowest unemployment rate in 50 years and the strongest income growth in 40 years. History will look back on the lockdown orders as the most self-destructive mistake in the history of human civilization. It is clear from the data that they have had no significant effect on covid mortality – some of the harshest lockdowns have accompanied the highest covid death tolls – and vice versa.
Worse, deaths directly caused by the lockdowns – from increased suicides, drug and alcohol abuse, delayed health treatments and health screenings, and poverty related deaths are likely far to exceed covid deaths. Excess deaths due to drug overdoses alone now exceed covid deaths in San Francisco. The UN warns of 130 million additional deaths by starvation worldwide because of the effect on the global economy.
Covid didn’t cause this damage. Government did. The only genuine relief from the covid lockdowns is to end them. That’s the one thing this bill doesn’t do.
Every day that goes by without ending them, and every dollar borrowed to continue them, makes the road back to prosperity longer and harder.
- Respecting an Imperfect System - January 3, 2021
- Covid Relief and Omnibus Spending Package: When Its Too Good To Be True… - December 22, 2020
- The Only Relief from Lockdowns is to End Them - December 11, 2020