Recently president Trump attempted to gain authorization to distribute $2,000 pandemic stimulus checks to close to half our population. Fortunately the Senate refused to approve the measure, although a round of $600 checks was approved and is currently being distributed. Now, President-Elect Joe Biden has promised to issue a round of $2,000 checks as soon as he gets on board.
While I am a huge fan of Biden’s, I believe he is totally wrong on this one. I believe that mass distribution of stimulus checks of any amount constitutes a wasteful shot-gun approach that will provide an unnecessary windfall to millions of Americans who don’t need these funds.
In reality, any national debt increase results in passing an additional burden on to our children and future generations. The price tag for Biden’s proposed $2,000 distribution checks will be roughly $435 Billion, a huge deficit increase. There must be a better way to target financial assistance to Americans faced with overwhelming financial hardship posed by this pandemic.
If you do happen to receive a future $2,000 stimulus check from the Biden administration, unless you urgently need these funds I urge that you either give the funds to persons in need or donate them to charity.
Money spent on $2,000 stimulus checks does not have to be “paid back” by future generations, as it is not “borrowed” from anywhere. Because the US government issues its’ own currency, it can and does “fund” a stimulus by creating new electronic dollars directly in your bank account. While this “raises the deficit”, that money is not owed to anyone, now or in the future (and thus it is not accruing interest). So what is the harm if it is not perfectly targeted (i.e. some people save it)? Getting the money out quickly should be the priority rather than delaying it by debating and then calculating complex eligibility requirements.
Yes, it is (maybe) inflationary. But that is a separate argument from the “interest rates/beggaring our grandchildren” that is used.
I recommend studying MMT (Modern Monetary Theory) for a better framework to understand taxes, deficits, and government spending.
Well said, Fact Checker 13.
Anyone who worries about the debt/deficit should be the loudest voice for repealing the 2017 Billionaire tax cuts, which added 1.7 trillion to the debt, and does nothing for the economy.
BTW, that tax bill allowed the wealthy to write off their private jets.
Brent, I concur with your assessment completely! John Newport (“Dr John’)
Hear! Hear!
I realize the new Georgia senators and Joe Biden in December ran on the $2,000 stimulus checks. But the checks must not be a “make-up” payment for those who did not do as well under the corporate tax cuts of 2017 or other benefits received by the wealthy. That should be fixed with increases taxes on high income and raising the corporate tax rate.
Giving $2,000 to people who were not hurt by the pandemic (and may have saved money as well) is not a well-targeted approach to stimulate the economy. In addition, nearly $2,000 ($1,200 and $600 checks) has already gone out to individuals who may not have been laid off and additional money for any dependent child or spouse.
Let’s save some of this money for needed infrastructure programs. Our national debt is already approaching $27 trillion and long-term interest rates are rising. For every 1 percentage point interest rates go up it will cost the US government an additional $600 billion in interest each year. You can figure out that at some point the US debt will spiral out of control (if it hasn’t already).
Brent Fine
Chandler