Here Come the Bailouts
Article from For Liberty by Norm Leahy.
Congress and the White House are already working on what would be the third fiscal response to the coronavirus epidemic. While the price tags for the first two efforts are still a moving target (but will easily exceed $100 billion), the third trip to the fiscal well could be a cool $1 trillion:
The government’s economic stimulus is set to quickly balloon into trillion-dollar territory in the coming days, the largest rescue in modern American history, as major industries flood the Trump administration and Capitol Hill for aid while huge swaths of the economy stall from the coronavirus crisis.
Treasury Secretary Steven Mnuchin will meet with Senate Republicans behind closed doors on Tuesday to present lawmakers with options for aid to airlines, hotels, casinos and small-to-medium-sized businesses. The White House was pushing for a package of more than $800 billion, POLITICO reported Monday, and on Tuesday the Treasury Department was preparing to unveil a package of $850 billion including more than $50 billion for the airline industry, $250 billion for small-business support and $500 billion for a payroll tax holiday.
So tax holidays, corporate bailouts…if some of this seems a bit like the government’s response to the Great Recession, you wouldn’t be wrong. Back then, the bill was a comparatively paltry $787 billion…and self-styled fiscal conservatives railed against it all as a titanic waste of taxpayer money.
Now, the political class can’t spend money fast enough:
The Trump administration is pushing to send direct payments to Americans in the next two weeks as huge parts of the economy shut down. “Americans need cash now,” Mnuchin said. “And the president wants to get cash now. And I mean now in the next two weeks.“ He planned to discuss the move with lawmakers and announce details later Tuesday.
Democrats are pushing their own package of provisions that don’t overlap entirely with the GOP pitch. Senate Majority Leader Chuck Schumer (D-N.Y.) and other Democrats are pitching a package of “at least” $750 billion that is expected to include more emergency aid for hospitals, expanded unemployment insurance, more funds for small business, help with child care, and food assistance for seniors.
The size and scope of the package are morphing rapidly as the economic and market damage mounts. Senate Republicans and the White House are exploring how to fast-track existing legislation with the upcoming stimulus packages.
Perhaps spending every single (borrowed) penny is essential to stave off a genuine, terrifying, economic calamity. And perhaps, in three, six, or 18 months, we may look back on the measures taken today and say they were right and prudent.
But it will all have to be paid back. With interest. Because even in times of crisis, the most powerful of economic laws remain in effect: There’s No Such Thing as a Free Lunch.