My little daily news blurb from the New York Times this morning featured a pro-con analysis of the direct $2,000 stimulus checks proposed as part of the Biden administration's coronavirus relief package. The checks would actually be $1,400, building on the $600 already sent out by the previous administration, but the total we're kicking around for purposes of argument is $2,000.
The arguments in favor of the direct payment all made sense, as did one of the arguments against it. But, as usual, the other arguments from the conservative side were completely insensitive to the realities of daily financial life for working class Americans.
First the argument against the $2,000, that is even remotely arguable: The money could be used to increase unemployment benefits for the people who really need it, giving a prorated amount of direct payment to people with less need. It's more complicated than simply handing out checks, and could lead to complaints that the targeted system misses in some cases. But there are complaints now. The current stimulus proposal includes enhanced unemployment benefits, with the direct payment added to them. One fix could be ongoing stimulus checks, as proposed by progressive Democratic members of Congress.
The other arguments against stimulus checks came from conservative fantasyland. The first stated that the stock market is doing great, and that the value of housing has actually gone up, so people are doing well financially, and will simply put the $2,000 in the bank, not stimulating the economy at all. Michael Strain of the American Enterprise Institute actually called the checks "an abomination."Are they really that unobservant, or are they merely hoping that everyone else is? Most people have stock holdings in a retirement account. The value is comforting -- until you realize that it could all be wiped out by a "market correction" the day before you retire -- but it doesn't help with the day to day expenses unless you tap into that reserve to meet an emergency need. Money you extract now needs to be made up by investment appreciation or by your further contributions so that it will be there when you do finally try to live on it. As for your home value, that's only liquid if you borrow against it, paying a bank to lend you your own money, or sell your house and have a wad of cash to live on while you're homeless.
The other argument, from conservative Democrat Joe Manchin of West Virginia, was that FDR wouldn't have done it. His plan favors infrastructure programs to put people to work. This neatly forgets how much the New Deal programs were scorned and derided at the time, and -- more importantly -- completely ignores the pandemic that has caused the economic distress in the first place. Manchin can say that he "doesn't remember FDR recommending sending a damn penny to a human being," but FDR wasn't facing a contagious and mysterious illness that would spread through work crews gathered together to work on these projects. We're in a situation like the 1919 flu pandemic, in which the government attempted to promote safe practices like we're seeing today: masks and distance. They met with similar carelessness and opposition. I'd be willing to bet that a pandemic would have altered FDR's calculations and the types of relief offered to the people looking to him for leadership and support.
