SAY NO TO MORE COVID-19 RELIEF SPENDING.

• Author: Rugy, Veronique, De
• Position: ECONOMICS

THE $1.9 TRILLION COVID-19 relief plan that President Joe Biden outlined in a televised speech before his inauguration includes a national vaccine investment; $1,400 checks for individuals; more aid to small businesses, families, and schools; a bailout for state and local governments; and an increase to the federal minimum wage just as small businesses are trying to dig out from a recession. At press time, the fight over the exact details of the package was coming to a close. Although it is apt to be popular, this COVID-19 spending is neither necessary nor beneficial.

When the battle began over Biden's plan, Donald Trump's signature was barely dry on the $2.3 trillion bill that Congress passed in December, which included $900 billion in COVID "stimulus." That legislation authorized $600 individual checks; a $300 bonus on top of an extension for federal unemployment benefits; a second round of bailouts for airlines, Amtrak, and the John F. Kennedy Center for the Performing Arts; the creation of two identity museums; and other items unrelated to the pandemic.

Even the ostensibly pandemic-related provisions of that bill reflected misplaced priorities. Although the best form of stimulus would be to reopen the economy, very little of the money went to vaccine distribution. We instead saw efforts by Sens. Josh Hawley (R-Mo.) and Bernie Sanders (I-Vt.), aided by Trump, to cut even larger checks to individuals. While they ultimately lost the fight for $2,000 checks, they secured means-tested $600 checks that individuals received regardless of their job situations.

In total, Congress has spent about $4.5 trillion on COVID-19 relief, of which $3.42 trillion was not covered by existing revenue. Assuming the new relief bill totals $1 trillion in additional spending, total stimulus spending over a one-year period will amount to 26 percent of GDP. From 2008 to 2012, the Bush stimulus, the Obama stimulus, and the Troubled Asset Relief Program combined accounted for around 10 percent of GDP.

The scale of the current relief efforts means that many Americans received more income during this pandemic than they did before it. According to data from the Federal Reserve Bank of St. Louis, total U.S. wage and salary disbursement was roughly $37 billion lower in November 2020 than it was in February 2020, which means the cumulative March-to-November wage and salary loss amounted to $333 billion. That's significantly smaller than the amount of individual stimulus...