OPINION:
Congress can hardly come together over anything anymore. In fact, there’s really only one issue where lawmakers can still regularly reach bipartisan agreement: spending trillions more in taxpayer money.
As Congress now considers a new round of “stimulus” legislation, the only debate is over specifics and how many trillions to spend. In their sad excuse for fiscal conservatism, Washington Republicans seek to spend “only” $1 trillion more, which is $7,000 per taxpayer. Congressional Democrats, on the other hand, are pushing for a $3 trillion package, which comes out to roughly $21,000 per taxpayer.
Even if we thought Congress would spend this money responsibly — a comical assumption — we simply can’t afford it. The federal government is already drowning in debt and burning away the financial future of the next generation.
In June alone, we ran a $846 billion deficit. That’s right: In just 30 days, the federal government loaded more debt onto the shoulders of our grandchildren than it did in all of 2019. This runaway spending is already set to lead to a roughly $3.7 trillion deficit for fiscal 2020. To put an abstract deficit figure in context, that comes out to an astounding $25,820 per taxpayer — and more than double the deficit we ran at the peak of the 2008 financial crisis.
Interest rates are indeed low, so now’s not the worst time for the government to borrow money if it’s going to. But they won’t stay low forever, and this unprecedented explosion in government debt will catch up to us. Economists consider a ratio of 100% between federal debt and the size of the economy a giant red flag — and thanks to massive COVID-19 spending we will hit this landmark this fiscal year.
Too, this explosion in debt will exacerbate and hasten the looming insolvency of our massive entitlement programs, such as Medicare and Social Security.
“These pandemic costs represent additional gasoline poured onto a growing budgetary inferno,” the Manhattan Institute’s Brian Riedl warned. An inferno indeed — and this pending financial disaster is all just stemming from the spending Congress has already passed. Passing trillions more will only compound these problems exponentially.
Economic arguments aside, this kind of rampant debt-financed spending is immoral. It amounts to intergenerational theft. Congress is behaving like a parent who responds to a personal crisis by charging up a credit card in their child’s name. How are we OK with this?
Of course, it’s not that the federal government should simply do nothing to uplift the economy amid the COVID-19 pandemic and a recession. Several policy changes would make a difference without slamming our grandchildren with trillions more in debt.
For one, President Trump could single-handedly reinvigorate the economy at minimal cost to taxpayers by rolling back the misguided tariffs his administration has imposed on goods like steel, solar panels and washing machines. According to the nonpartisan Tax Foundation, removing these punitive taxes on American consumers would increase the size of the economy by $58 billion, increase wages and preserve 180,000 jobs.
Moreover, Congress could help the economy recover by passing much-needed liability protections for businesses that reopen or have remained open amid COVID-19. Passing these protections wouldn’t cost taxpayers a dime — but it would shield small businesses from a potentially crushing wave of frivolous lawsuits over something they cannot control.
Consider the case of Chris Purcell, who owns a sub shop in Elizabeth City, North Carolina.
“There’s really no way to prove or disprove that someone did or did not catch [the coronavirus] in any particular location. And that scares a lot of the small business owners, like myself and fellow restaurateurs, in town,” he told CNBC.
“We’ve done everything that the CDC, the state of North Carolina, WHO, anybody can think of, for us to do, we’re doing it,” Mr. Purcell said. “And that’s our concern, if we’re doing everything that we’re told is correct to do, we can still be open for liability. We have no recourse against it.”
A large chain or corporation has plenty of resources to weather lawsuits, but small businesses like Mr. Purcell’s can’t afford armies of lawyers. Only by passing temporary liability protections can we ensure that medium and small businesses are comfortable fully reopening — a prerequisite for economic recovery and job growth.
The debate over specifics is complex, and there is no easy answer to some of the policy questions posed by the current crisis. But one thing is clear: If Washington officials want to actually make things better for once, another trillion-dollar package isn’t the way.
• Brad Polumbo (@Brad_Polumbo) is a fellow at the Foundation for Economic Education and a senior contributor for Young Voices.
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