X

COVID Relief Bill Might Backfire in the Long Run

Megan McArdle makes her case
By John Johnson,  Newser Staff
Posted Mar 9, 2021 1:51 PM CST

(Newser) – New COVID relief payments of $1,400 will be landing in Americans' bank accounts soon, but Megan McArdle makes the case in a Washington Post op-ed that the checks are a bad idea. She's all in favor of the government helping people and businesses in genuine need during the pandemic, but she has a problem with so many of these checks going to fully employed people who don't need the money. It's a needed stimulus, you say? Not quite in this case, she writes. We're in the midst of a "supply shock," not a "demand shock" marked by plunging consumer confidence. Stimulus can help the latter. But "giving money to someone who still has their job doesn’t make them more likely to go out to dinner if the reason they've stopped going out is that they’re afraid of the deadly virus."

story continues below

The relief money accounts for $420 billion of the relief package, roughly 20%, and it is the most "indefensible" part of the measure, writes McArdle. Small businesses, for example, could use a lot more help, but the stimulus bill delivers little on the front. Instead, most of this money will likely pile up in people's bank accounts because they still don't have a lot of ways to spend it. "It’s bad policy now and a dangerous precedent for the future," writes McArdle. "And it may well do more to seed the next economic crisis than to fix the current one." Read her full column. (Read more COVID relief bill stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
X