{"id":26245,"date":"2021-02-23T15:47:33","date_gmt":"2021-02-23T20:47:33","guid":{"rendered":"https:\/\/www.megalextoria.com\/wordpress\/?p=26245"},"modified":"2021-02-23T15:47:33","modified_gmt":"2021-02-23T20:47:33","slug":"economists-slam-biden-stimulus-as-economically-unjustified-plan-that-incentivizes-unemployment","status":"publish","type":"post","link":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/2021\/02\/23\/economists-slam-biden-stimulus-as-economically-unjustified-plan-that-incentivizes-unemployment\/","title":{"rendered":"Economists Slam Biden Stimulus as \u2018Economically Unjustified\u2019 Plan That ‘Incentivizes Unemployment’"},"content":{"rendered":"

\"\"<\/a><\/p>\n

President Biden has abandoned bipartisan compromise and pushed full-steam-ahead to pass his entire <\/span>sweeping $1.9 trillion COVID-19 spending package<\/span><\/a>. The president\u2019s proposal includes $1,400 \u201cstimulus\u201d checks for more Americans, $350 billion to bail out state and local governments, a renewal of super-charged unemployment benefits through September, money for vaccine distribution, a <\/span>federal $15 minimum wage<\/span><\/a>, and much, much more. Democrats in Congress are determined to mark up the bill over the next few weeks and <\/span>pass it by early March<\/span><\/a>.<\/span><\/p>\n

But the state of the economy doesn\u2019t support this spending bonanza\u2014not even close.\u00a0<\/span><\/p>\n

The nonpartisan Congressional Budget Office is <\/span>projecting<\/span><\/a> a \u201crapid\u201d resurgence in economic growth and a slower but steady return to pre-pandemic employment levels <\/span>without any further stimulus.<\/span> (We\u2019ve already spent an astounding $4 trillion). And top free-market economists interviewed exclusively by FEE all argued that Biden\u2019s drive for more massive stimulus is driven by politics, not sound economics.<\/span><\/p>\n

\u201c<\/span>We absolutely don’t need another multi-trillion dollar stimulus,\u201d Texas Tech economics professor Alex Salter said. \u201cWe’ve already spent $4 trillion fighting COVID since last year. Lack of spending isn’t our problem. Government should spend more on producing and distributing the vaccine, and otherwise get out of the way.\u201d<\/span><\/p>\n

Meanwhile, economist Stephen Moore of FreedomWorks argued that government spending can actually be a negative for the economy, because the money has to come from somewhere else.\u00a0<\/span><\/p>\n

\u201cHelicopter money merely redistributes wealth\u2014it does not create it,\u201d he said. \u201cWe don’t need this extra stimulus.\u201d<\/span><\/p>\n

Moore, who served as a top economic advisor for former President Trump, compared the Biden effort to similar stimulus bonanzas under the Obama administration, which resulted in the <\/span>slowest economic recovery since the Great Depression<\/span><\/a>.<\/span><\/p>\n

\u201cWe learned from the Obama $830 billion “shovel ready” plan that Keynesian stimulus does not work,\u201d Moore said. \u201cObama\u2019s own numbers indicate that we ended up with fewer jobs than if we had done nothing at all to \u2018stimulate\u2019 the economy.\u201d\u00a0<\/span><\/p>\n

Another prominent free-market economist, Mises Institute Senior Fellow Robert P. Murphy, offered a similar assessment. He called the Biden proposal \u201ceconomically unjustified\u201d and suggested that \u201c<\/span>any of its good features could be achieved more directly through other policies.\u201d<\/span><\/p>\n

The economists interviewed by FEE took issue with not just the Biden plan\u2019s massive spending levels and sticker price, but also several of its specific proposals such as more \u201cstimulus\u201d checks and the further expansion of ultra-generous unemployment benefits\u2014originally sold as \u201ctemporary\u201d last March\u2014that would result in many Americans earning more money by not working, thereby disincentivizing employment.\u00a0\u00a0<\/span><\/p>\n

\n
\n<\/div>\n
\n<\/div>\n<\/div>\n

\u201cMore checks don’t make sense,\u201d Salter, the Texas Tech economist, said. \u201cHousehold balance sheets are strong. Many households saved large portions of the previous checks. Yet another direct payment isn’t about economic stability. It’s about buying political support.\u201d<\/span><\/p>\n

For his part, Murphy sympathized with the plight of those crushed by COVID-19 lockdowns but still viewed the checks as a misguided proposal.<\/span><\/p>\n

\u201cIt is understandable that citizens want relief checks to compensate for coercive measures preventing them from earning income, but we shouldn’t continue this trend of everyone getting checks from the government,\u201d he said. \u201cUltimately the public isn’t made richer by paying taxes that are then partially handed back to them.\u201d<\/span><\/p>\n

The economists had particularly harsh words for Biden\u2019s proposed expansion of unemployment benefits way above normal levels. Unemployment payouts have long been shown in economic research to prolong unemployment and increase its baseline level.<\/span><\/p>\n

\u201cExpanding unemployment benefits during a recession has a predictable result: slower employment recovery,\u201d Salter argued. \u201cWe should be helping people get back to work\u2014not making it more financially attractive to stay home.\u201d\u00a0<\/span><\/p>\n

\u201c<\/span>The $400 a week unemployment benefit bonus included in the proposed bill incentivizes unemployment because it pays people not to work,\u201d Moore added. \u201cPassing this bill means risking the loss of more than 5 million jobs if people opt to receive unemployment benefits rather than work.\u201d<\/span><\/p>\n

In sum, though, the economists all agreed that no amount of spending can \u201cstimulate\u201d an economy that is in some places still locked down, and in many places still at least partially restricted. If people cannot legally go to work or engage in commerce, no amount of money-printing or number of blank checks can bring about prosperity, they agreed.<\/span><\/p>\n

\u201cThe best thing we can do for long-run economic health is get everything opened back up safely,\u201d Salter said.\u00a0<\/span><\/p>\n

Murphy reached a similar conclusion, arguing that \u201cthe best way to help the economy is to end political lockdowns, allowing businesses, workers, and\u00a0 customers to find the optimal mix of protective measures to deal with the threat of COVID-19.\u201d<\/span><\/p>\n

Of course, Biden\u2019s \u201cstimulus\u201d legislation is really a political wishlist, chock-full of partisan policies like a $15 minimum wage and subsidies for poorly-managed blue states. Yet this isn\u2019t immediately obvious from Biden\u2019s rhetoric or much of the media\u2019s coverage. As a result, the proposal polls well with voters.<\/a><\/span><\/p>\n

With the growing chorus of free-market economists calling out the president\u2019s pretense, hopefully the public will soon realize that there\u2019s little economic justification for Biden\u2019s political spending push.<\/span><\/p>\n

SIGN UP<\/strong>:<\/strong> Click <\/em><\/span>here<\/span><\/a> to subscribe to Brad Polumbo\u2019s email newsletter for your two-minute daily update on free-market political news and policy analysis.<\/span><\/em><\/p>\n

\n<\/div>\n
\n

\nBrad Polumbo
\n<\/a><\/h5>\n

Brad Polumbo (@Brad_Polumbo<\/a>) is a libertarian-conservative journalist and Opinion Editor at the Foundation for Economic Education.<\/p>\n<\/div>\n

This article was originally published on FEE.org. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

President Biden has abandoned bipartisan compromise and pushed full-steam-ahead to pass his entire sweeping $1.9 trillion COVID-19 spending package. The president\u2019s proposal includes $1,400 \u201cstimulus\u201d checks for more Americans, $350 billion to bail out state and local governments, a renewal of super-charged unemployment benefits through September, money for vaccine distribution, a federal $15 minimum wage, and much, much more. Democrats in Congress are determined to mark up the bill over the next few weeks and pass it by early March. But the state of the economy doesn\u2019t support this spending bonanza\u2014not even close.\u00a0 The nonpartisan Congressional Budget Office is projecting a \u201crapid\u201d resurgence in economic growth and a slower but steady return to pre-pandemic employment levels without any further stimulus. (We\u2019ve already spent an astounding $4 trillion). And top free-market economists interviewed exclusively by FEE all argued that Biden\u2019s drive for more massive stimulus is driven by politics, not sound economics. \u201cWe absolutely don’t need another multi-trillion dollar stimulus,\u201d Texas Tech economics professor Alex Salter said. \u201cWe’ve already spent $4 trillion fighting COVID since last year. Lack of spending isn’t our problem. Government should spend more on producing and distributing the vaccine, and otherwise get out of the way.\u201d Meanwhile, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[295,622,1636],"class_list":["post-26245","post","type-post","status-publish","format-standard","hentry","category-news-and-politics","tag-biden","tag-economics","tag-stimulus"],"_links":{"self":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/26245","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/comments?post=26245"}],"version-history":[{"count":0,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/26245\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/media?parent=26245"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/categories?post=26245"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/tags?post=26245"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}