Is $2 trillion enough to save the economy?

Yahoo News 360

“The 360” shows you diverse perspectives on the day’s top stories and debates.

What’s happening

President Trump on Friday signed into law a $2 trillion relief bill aimed at saving the economy from the crisis caused by the coronavirus outbreak.

The bill includes more than $500 billion in direct relief to workers in the form of $1,200 checks for middle- and low-income households and expanded unemployment benefits. It will also provide help to businesses through direct payments and loans. States and hospitals will also get a much-needed influx of money to fund their efforts to combat the virus. 

The relief package is more than double the roughly $800 billion stimulus in 2009 to save the economy from the financial crisis. The coronavirus aid bill came together after several days of heated debate between Democrats and Republicans in the Senate over details of how the money would be spent. The final version, however, received near unanimous support in both houses of Congress. 

Why there’s debate

Supporters of the bill say it correctly identifies the areas of the economy that are most in need of support. By mixing direct relief to workers and support to businesses, the legislation will help individuals survive the next few months, while ensuring the companies that employ them are still around when the outbreak subsides, they say. Political observers have praised lawmakers for reaching a compromise that addresses some of each party’s priorities in only a few days of debate. 

Despite its bipartisan appeal, the bill has received criticism from both sides of the aisle. Critics on the left say it gives far too much money to large corporations, with little oversight, while not providing enough for everyday people. Rep. Alexandria Ocasio-Cortez called it “one of the largest corporate bailouts, with as few strings as possible, in American history.” A few critics on the right take issue with such an extraordinary expenditure being added to the deficit, which they argue sets the country on a crash course for true economic collapse in the near future. 

The most common critique of the package is that it may not be big enough. A number of economists argue that the bill provides the proper recipe for rescuing the economy, but only if it’s the first step of a continued effort that could include several more — perhaps larger — stimulus bills.

What’s next

Treasury Secretary Steven Mnuchin said $1,200 checks should start going out in as soon as three weeks to taxpayers who have already signed up for direct deposit with the IRS. It may take significantly longer, maybe even several months, for physical checks to be mailed.

Perspectives

Supporters 

The bill may not be perfect, but it makes significant progress toward recovery

“It’s a flawed package, but overall a shockingly ambitious measure from a Republican legislature — and one that can and should be made stronger in the coming weeks as the country sinks deeper into recession.” — Dylan Matthews, Vox

It’s a good start, but more is needed

“Lawmakers got it roughly right with the fiscal stimulus deal reached Wednesday. It will go a long way to cushion the economic body blow from COVID-19. But, given the gravity of the crisis, it won’t be enough, and they must begin work on the next tranche of stimulus.” — Mark Zandi, The Hill

Lawmakers should be applauded for getting the bill done so quickly

“Lawmakers should be applauded for the massive package of fiscal measures to support the economy after just a few days of debate. During the financial crisis of 2008-2009, it took months for policymakers to get it together and pass the fiscal stimulus package that ultimately ended that severe downturn. They understood they had only days to get it together this time.” — Mark Zandi, The Hill

The package is a lifeline for struggling families

“Call it a lifeline, relief, or even a crisis bill. But it isn’t a stimulus — it is a last resort to save individuals from starvation and small businesses from extinction, not to provide a profit boost to the powerful.” — Tiana Lowe, Washington Examiner

The scale of the crisis means throwing political ideology out the window

“The support for business, the relief for individuals, and the expansion of medical capacity are all urgent matters. They justify a bill that, in a happier time, nobody would consider, and we ourselves would vehemently reject.” — Editorial, National Review

Congress correctly identified the problem of the current crisis

“Everyone expects that eventually, Congress will debate a traditional stimulus bill. … For now, though, the immediate goal is to help families and businesses survive, not to help the economy revive and thrive. There’s no way to stimulate an economy that’s still in lockdown. Congress will have to wait for the hurricane to pass before it can start the rebuilding process.” — Renuka Rayasam, Caitlin Emma and Michael Grunwald, Politico 

The No. 1 goal was immediate relief this bill provides that

“The Trump administration and Congress have more work ahead to deal with this complex crisis. Their new measure may be incomplete, but it offers stability to Americans who desperately need it as more and more of them stay home. That’s crucial.” — Editorial, San Diego Union-Tribune

Skeptics

It’s not enough money

“The bleakest one-time jobs data in American history — 3.28 million people filed for unemployment last week — shows why even a $2 trillion rescue bill can't save the economy.” — Stephen Collinson, CNN

The bill does nothing to change the inequitable system that causes our frail economy

“Make no mistake — the Senate’s $2.1 trillion economic stimulus package is not designed to fundamentally fix America’s broken social safety net and provide for its people — it is designed to prop up a system where major multinational companies can continue to deny their employees fair wages and paid sick days, and the government can get away with not mandating these protections at all times.” — Shaunna Thomas, South Florida Sun Sentinel 

The bill doesn’t do enough to protect small businesses

“The hundreds of thousands of restaurants, start-ups, dry cleaners, small manufacturers, craft breweries and other businesses currently closed but employing millions will need more if the pandemic and economic dislocations are prolonged.” — Albert Hunt, The Hill

Lawmakers missed an opportunity to ensure our election in November is safe

“States need those funds to implement vote-by-mail systems and other measures so that voters can still cast their ballots in November no matter the status of the coronavirus emergency. Lawmakers and election security experts widely agree, however, that the sum appropriated by Congress falls far short of what will be needed to guarantee a fair, open, and functional 2020 election process.” — Sam Brodey and Hunter Woodall, Daily Beast

The stimulus can’t be judged until we know how long the crisis will last

“If [social distancing] measures do not prove effective, or if they are relaxed under orders from Mr. Trump or defied en masse, experts warn the crisis could stretch much longer, under the growing cloud of a recession. That’s why it’s hard to say if the congressional deal will be enough to keep families from going hungry and businesses from going under.” — Jim Tankersley, New York Times

Lawmakers are defying free market principles by deciding which businesses get rescued

“We don't like the idea of providing bailouts to favored industries and companies that have been living on the edge. … Government aid to distressed companies distorts competition and allows weaker players to survive and continue their reckless ways.” — Editorial, Chicago Tribune

How fast the money gets into people’s hands is as important as the size of the checks

“To prevent a depression, the relief payments have to get to workers and business owners fast enough to prevent a chain reaction of pain where one person goes out of business and that triggers another failure and another.” — Heather Long, Washington Post

The stimulus is a huge gamble that could have disastrous consequences

“The [bill] plunges the nation into a crash course on experimental economics — and we’re the lab rats.” — Matt Welch, Reason

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