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3 Glaring Problems with Joe Biden’s New Multi-Trillion COVID Package

Brad Polumbo
January 20th, 2021
Foundation for Economic Education
Comments (11)

This article was originally published by Brad Polumbo at the Foundation for Economic Education.

Any legislative package intended to revive the economy shouldn’t include policies projected to put millions out of work.

On Thursday night, Joe Biden rolled out a sweeping proposal for $1.9 trillion more in COVID-19 relief and stimulus spending.

“I believe we have a moral obligation,” Biden said during a speech in Delaware announcing the plan. “In this pandemic in America, we cannot let people go hungry, we cannot let people get evicted, we cannot watch nurses, educators and others lose their jobs, we so badly need them. We must act now, and we must act decisively.”

It’s a massive proposal, and any final legislative text based upon it would no doubt be hundreds of pages (if not thousands). But here are some of the package’s main provisions:

  • An additional $1,400 in “stimulus” checks to most Americans, upping the recently-passed $600 payouts to $2,000
  • Renewal and increase of the expanded unemployment benefits that extend payouts to many new classes of workers through September 2021. Biden’s proposal would add $400 a week in federal payouts on top of existing state-level benefits
  • Expansion of the child tax credit and the Earned Income Tax Credit
  • Increase in food stamp benefits
  • A nation-wide $15 minimum wage
  • Extension of the federal government’s eviction moratorium
  • $350 billion for local, state, and tribal governments
  • $160 billion for vaccine distribution and other COVID health measures
  • Paid leave for millions of workers, much of which would be paid for by taxpayers

Biden’s proposed spending splurge comes in the context of the federal government already having spent an astounding $3 trillion and counting on COVID-19 relief and stimulus efforts. Many of the government’s various economic initiatives have proven ineffective and rife with fraud, but Biden’s plan would simply double-down on this approach and pour more money into it.

Of course, advocates would say that the government has a moral and prudential duty to step in and steer the economy out of the red. “This [plan] gets money quickly into the pockets of millions of Americans who will spend it quickly,” Biden said.

But here are three key problems with Biden’s multi-trillion-dollar proposal.

Despite ostensibly being a COVID-19 relief bill, Biden’s proposal largely ignores the root cause of our economic distress: government lockdowns and restrictions on the economy. Major economic centers like California and New York remain in large part locked down, with businesses shut down and people largely confined to their homes. (Despite the ampleand growing—evidence that harsh lockdowns are not an effective COVID containment tactic).

The unfortunate truth is that the federal government could pass a $100 trillion stimulus bill and it still couldn’t revive an economy that is chained down by local government restrictions. The unfortunate truth is that the federal government could pass a $100 trillion stimulus bill and it still couldn’t revive an economy that is chained down by local government restrictions.

“If states would lift draconian lockdowns we wouldn’t have to keep revisiting conversations about stimulus spending,” Republican congresswoman Lisa McClain argued. “We need more jobs, not more government bailouts.”

One might understandably assume that a COVID relief bill should promote work and job growth, not kill it. But Biden’s proposal upends this assumption.

At the same time, the president-elect is promising to steer the nation to economic renewal, he is proposing the expansion of an ultra-generous unemployment benefits system for the next 7 months. It’s Econ 101, and an intuitive matter of basic incentives, really, that government programs that make unemployment more attractive—in many cases this expanded program would pay close to or more than people’s regular job—hurt job growth and prolong unemployment.

Economists Casey Mulligan and Stephen Moore estimate that the Biden bill would destroy at least 4 million jobs due to the work disincentives it would create. How’s that for “stimulus?”

And the inclusion of a federal $15 minimum wage is equally counterproductive.

Even setting aside the objection that such a partisan priority shouldn’t be slipped into a COVID emergency package, the policy on its merits alone would crush small businesses. A recent survey found that almost 60 percent of small business owners said that they don’t expect their enterprise to survive through June 2021. Hiking their wage bill—often an enterprise’s biggest expense—would no doubt deal the killing blow to many of these businesses.

“If you actually wanted to create more jobs during this pandemic, then why would you impose a costly $15 minimum wage on small businesses?” Republican congressman Greg Murphy asked. “This is just another example of progressives trying to pass their liberal agenda under the guise of COVID relief.”

A federal $15 minimum wage would also hurt workers directly by killing millions of jobs. It’s basic economics that when the cost of a service goes up, less of it is demanded. So, it’s no surprise that the nonpartisan Congressional Budget Office has projected that a federal $15 minimum wage would eliminate an estimated 1.3 million to 3.7 jobs. Any legislative package intended to revive the economy shouldn’t include policies projected to put millions out of work.

Any legislative package intended to revive the economy shouldn’t include policies projected to put millions out of work.

Another glaring flaw plaguing Biden’s package is that so much of its expenditure would not go to the needy or those actually impoverished by the COVID-19 crisis and lockdowns, but to affluent or well-off Americans. Consider the president-elect’s stated desire to send out increased “stimulus” checks, for example.

We can safely assume that Biden would use the same or similar eligibility requirements as the House Democrats did with their bill to send out $2,000 checks. Under this scenario, taxpayers would be on the hook for billions sent to wealthy families. As economist Peter Jacobsen and I previously explained for FEE:

The Committee for a Responsible Federal Budget’s Marc Goldwein examined the House Democrats’ proposed boosted stimulus checks legislation. He reports that a single adult with a $100,000 salary would get $750 courtesy of the US taxpayer—even if their (rather sizable) income hasn’t been disrupted at all. A married couple with 3 kids with a household income of $200,000 would get $7,500 (!!!) in taxpayer money.

These are just two examples. But it’s true, broadly speaking, that these proposals would spray billions of dollars—funded by our taxes and debt—to well-off people whose employment has not been adversely impacted by COVID-19 lockdowns.

In a similar vein, Biden’s package allocates hundreds of billions in taxpayer money to bail out poorly-managed state and local governments.

“This is a bailout package for blue states for their bad policies, for their lockdown policies,” Republican congressman Michael Waltz, who represents Florida, explained. After all, in stark contrast to Waltz’s home state, in California and New York, draconian lockdown policies have caused a budget crisis. (What they have not caused is much amelioration of the pandemic, which is far worse in California and New York than in Florida.)

“They have to fill that hole,” Waltz said. “States have to balance their budget, the federal government doesn’t. So AOC and now Joe Biden are going to the big piggy bank in the sky that prints nonstop money.”

Suffice it to say it is neither fair nor prudent to force federal taxpayers to bail states out of the consequences of their poor decision-making. The relief such states truly need is relief from the impoverishing policies of their governments.

Biden’s new stimulus plan may be intended as an opening salvo in negotiations. Many of the above provisions might not make it into the final bill Congress ends up considering. But the president-elect’s sweeping proposal still offers the public a glaring example of a timeless principle: Politicians will always exploit a crisis to expand their power.

This is the danger economist Robert Higgs identified in his seminal work Crisis and Leviathan as “the Ratchet Effect.”

Higgs showed how throughout history, crises have been used to excuse government power grabs. After each crisis, the government lets go of some of the power, but never all of it. As a result, the federal government’s power (the Leviathan) has ‘ratcheted up,’ crisis after crisis, throughout the last hundred years.

So, Americans must not treat Biden’s COVID stimulus proposal like an app’s terms and conditions of service and simply accept it after a brief skim. We must guard against big government power grabs and radical economic interventions foisted on us in the name of crisis response.

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    Author: Brad Polumbo
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    Date: January 20th, 2021
    Website: https://fee.org/

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    11 Comments...

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    1. Andrea.Iravani. says:

      Elon Musk and the others have proven themselves to be sadistic, pathological lying psychopaths. The illegal surgery was performed on me without my consent while unconscious at Columbia St. Mary’s Ozaukee, ( owned by Ascension Healthcare, formerly owned by Florida ex governor Rick Scott on March 27th, 2014.)

      I awoke with excruciatingly loud tinnitus in my left ear which reulted in months of sleep deprivation, sleeping as litle as an hour a day for almost an entire year. Additionally, was an immediate inability to cry andhaving to get prescription glasses for the first time in my life. Migraine headaches when being in rooms with many people that had cell phones also was a problem.

      They deny that they did it because it is totally illegal. It is just for the purpose of intellectual property theft. The messages that I am constantly bombarded are nothing but constant distraction, threats, intimidation, and harrassment. 

      This has immensely hindered my intellectual capabilities, and has not helped me in any way. They are obviously doing this to people that they know are already superior in intelligence, and trying to claim credit for it. Former Swedish stock broker Magnus Olsen is another one of their victims. 

      When the illegal sugery was performed on me, I was hospitalized for an intentional suicide attempt to end my life. I overdosed on prescription painkillers prescribed for an impinged shoulder and valium. Three doses of narcan were given to me in addition to using an external cardiac defibrilator on me to revive my heart.

      Whenever I would pray, the tinnitus would start increasing in volume.

      People started breaking into my home, stealing and vandalizing every time that I would leave. Neighbors even placed things that they had stolen from my home in their windows, and used them in their yards in front of me.

      In February of 2016, my smart meter from WeEnergies ( Wisconsin Energy )  was hacked and read ddd-ddd for default, which I checked after stray electricity flew out of a light socket and laser split two coffee cups in half, one after the other. This was immediately after my Mother unexpectedly died in December of 2015. She was diagnosed with cancer in November, was treated for cancer, and died a month later.

      After I called WeEnergies to complain about the broken smart meter and stray energy flowing from the light socket they told me that any time that I wanted to know what the meter reading was that I should call them and ask the. I called the manager Julia Schneider and she told me that it would be replaced. Then the police showed up at my house and told me that I couldn’t stay in my house until a private electrician also came in addition to WeEnergies electrician replacing the meter. It was over Washington’s birthday so I had to stay in a hotel for 5 days. 

      The day after arriving at the hotel, my dog developed a mast cell tumor, so I took him to the animal hospital right next to the hotel. I did not treat have him treated for cancer.

      People also let me know that they were spying on me by repeating, doing, or saying things that I have said or done in my home, including the media participating in this gas-lighting as well. When confronted they denied it, but Tyler Durden from Zero Hedge  did say on The Burning Platform that he was listening to me. I told him to stop. My Zero Hedge account was hacked. I openned another Zero Hedge account which was also soon hacked after my first phone was hacked in June of 2017.

      Immediately after my first phone was hacked, someone started using directed energy weapons on me. I did not know that that was what it was. I thought that there were protests taking place near the industrial park or highway because that is what they sounded like. I asked the police and fire department if they were in the neighborhood because of complaints about the noise. They asked, “What noise?” Neighbors also said that they did not hear it when I asked, but one of the neighbors that lives in an 8 unit condo behing me across the driveway from where my mother’s condo building was, was just standing in her driveway when the DEW chanting was saying “I’m capital Bob.” She yelled, “I respect that man.” Another time she yelled, turn it off, and it stopped. A couple of the neighbors in those buildings appeared to have heard the chants also because they 
      looked up like WTF is going on? 

      The man that lives below her also said really loud in his driveway, “as soon as you turn off your government microphone we’ll tell you.” 

      I refuse to talk to these terrorists in my neighborhood who I believe are part if the InfraGard terrorist cult network. Their lifestyles are crimes against humanity. 

      I have lived in this neighborhood since 2000 and during the most vulnerable time in my life, they decided to opportunistically exploit my dire circumstances for their own opportunistic self-serving evil agendas. They obviously thought that I would move or kill myself, which they have conspired in trying to get me to do. The people that had placec the stolen items in their windows are renting, and their are several other homes in the neighborhood that are rented. 

      Also, immediately after my first phone was hacked, We Energies CEO and St. Mary’s Neurologist James Hurth MD. both abruptly resigned. Vault 7 technology is being used on me, hacking everything, even my sleep number bed. 

      In 2014 I would constantly wake up and notice that the light that I left on in the hallway was off. I thought that I turned it off while sleep walking, but now I know that it was turned off by evil psychopathic terrorists using vault 7 technology on me, thanks to Julian Assange, Edward Snowden, and Joshua Schulte!

      Everyone in government, health care, corporations, technology, utilities, and media have all been notified that these things are happening to me, and all have refused to prosecute the sick, evil, sadistic, cold blooded, terrorist monsters that have perpetrated these crimes against me.

      When I called the Grafton police because people were breaking into my house, Officer Alfonso told me to install security cameras, which would not prevent anyone from breaking into my house, and would also be able to be viewed by hackers, as well as giving them access into my wifi, and it is a well known fact that video can be recreated with CIA dumbo, which was developed by the animation industry. He actually said, “What makes you think that you’re so special that someone would steal from you?” 

      I asked him to check the security camera at the end of the street and he lied and said that they did not have access to it, even though I read that they were installec for that purpose.

      There is no hope for this country. You can thank InfraGard for that!

      Dr. John R. Hall proves illegal sugery was performed on people, but it is my hypothesis which has been ignored by all that these implants are placed in through people’s ears and nose. International Center Against Abuse of Covert Technologies:
      http:www.ICAACT.org

      Joining the psychopaths that have perpetrated these crimes against me would be a fate worse than death. Their life styles are barbaric crimes against humanity. I would rather die than join them, They are sick as hell!

      Andrea Iravani 

      I tried posting this on thesaker and it was not posted.

    2. Honesty says:

      And of course,the biggest nastiest problem of them all – Creepy Joe Biden himself!😂

    3. Darth Skippy says:

      “we cannot watch nurses, educators and others lose their jobs, we so badly need them…
      … Biden’s package allocates hundreds of billions in taxpayer money to bail out poorly-managed state and local governments..”

      Superfluous workers in fake jobs, pretend to look busy, and they get social promotions, just for showing up, like students in the public school system.

      You don’t literally need these people, or their work. This is daycare for adults.

      It would be more dignified, to give ubi, discretely, than to have incompetent people toddling around a Chinese fire drill.

    4. cranerigger says:

      Brad Polumbo, awesome summary. “Using Crisis to Expand Big Government’s POWER.” Politicians without morals & no idea of how-to-solve-problems, like to THROW MONEY at problems hoping the difficulties will go away. This approach is similar to taking the Equity out of your home every year, believing the mortgage (DEBT) will disappear.

      http://www.pagetutor.com/trillion/index.html

    5. James says:

      The No. 1 problems is there are no trillions for the package, only inflation, which will rob you blind.

    6. X7734-0845 says:

      To borrow from someone’s comments on this site:

      “Tuesday’s are ‘Soylent Green’ days”.

      It’s gonna get interesting – again.

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