So Congress and the White House are busy hammering out a COVID-19 economic stimulus package. The package could end up being massive at possibly $2 trillion or 10% of GDP. The most controversial funding is the plan to send personal checks ranging from $1000-$2000 directly to millions of Americans.
The checks are drawing criticism as well as my ire. But more about me in a moment.
Politicians and economists alike question the benefits of sending Americans personal checks. The critics believe the checks should deliver positive impact but would prove less effective than other programs such as bolstering unemployment aid or the payroll tax holiday.
However, the checks usually win for fairly obvious reasons. The unemployment stimulus or tax holidays are simply more complex and harder to determine how many people would benefit while the checks would clearly help families. Additionally, imagine being the naysaying congressional rep trying to explain to your voters why you decided against sending them free $$$. Also, the plan has a history. The Bush administration used it twice (2001, 2008) followed by Obama in 2009.
This history segues to my frustration with the plan. The Senate plan adopts the phase-out levels of these earlier plans, capping full payments to individuals making $75000 or less and $150000 for married couples. Umm, I am no economist but $75000 does not buy what it did in 2008. Why would you not adjust for inflation? I take no issue with the phase outs in general but geez consider what those dollars buy 12 years later.
Additionally, eligibility is based on 2018 tax returns specifically the individuals adjusted gross income (AGI). The entire point of this plan revolves around how a virus has fundamentally changed our economy at least in the short term. The seismic shift clearly impacts families which renders 2018 incomes levels for these folks moot. Neither concerns address the lower amounts poor families would get.
The stinginess bugs me less than the sense that McConnell and essential Senate leaders are taking a thoughtless cookie-cutter approach to a critical moment. We can debate the merits of a massive stimulus shipping money to homes. I hope we have that discussion. But if you are spending $2 trillion it would be nice if you put some thought into it.
I agree with the fact that it's definitely hard to please and help everyone in a time like this.
While I agree with the fact that the distribution of the checks is a little bit careless, I do think that the government is putting a lot more thought into these things than we give them credit for. I think with a national pandemic it will always be difficult to please everyone and they are doing what they can for right now.