Not Going To Work This Time
When I first starting doing these columns, I promised myself I would try not to make them political but as the days and weeks go on, I can’t help myself.
This column isn’t directly about politics but as you know, pretty much any opinion printed has some political motivation.
Whew, thats done.
At some point in the next week or so, the US Senate will pass some version of the latest Covid Rescue Plan. It passed in the house (closer than Nancy Pelosi wanted for sure) as a 1.9 trillion dollar package that pretty much had a little something for everyone. 50 million for some research project about animal husbandry, 100 million for a tunnel to transport fruit from one side of a mountain to the other, and so on. I am only being a little facetious when I say that but I think most Americans know by now, when Democrats put together any sort of financial legislation it contains a ton of pork barrel projects for the old home district. Honestly, I am not that much against that kind of thinking as long as it’s presented at the proper time. This is not the proper time.
The country has been struggling to get back on its feet and getting this pandemic under control. The Federal Government should be focused on that first and foremost and resources should be made available accordingly. Thats not what this bill contains.
To allocate just 9% of the total package to dealing directly with Covid is a sin. Granted, it still is a significant amount of money and probably any package either side would have come up with would be about the same dollar amount but rest assured, once the Senate gets its hands on it the conversation will be a bit different. Unfortunately, Senate Republicans may not have much of a chance to pare this one down much. Unless, a certain Senator from West Virginia straps on his moderate chaps and rides through the cesspool of politics and helps take a knife to those cute little pork barrel projects and helps the Senate look at a more realistic spending bill.
As I have stated in an earlier column, I don’t believe the economy needs all this stimulus. The machinery in this country will work just fine if you just open the doors and let some fresh air in. Keeping the country on lockdown in any form will inhibit any recovery for longer periods of time. I do not believe giving hundreds of billions of dollars away will speed any recovery. Trust me, I am not stupid and I do know the benefits of putting money in peoples hands but at this point I think longer term, it will do more harm than good.
This is where the Reagan Republican in me comes out. I still believe that when the economy prospers, the government prospers and growth begets growth and all that begets higher tax revenue with no increase in the tax rate. However, we are no longer in that World were an actualized 5-7% GDP growth increase can balance the Federal Budget. The government has spent over 4 trillion dollars (more coming) over it’s normal functioning budget and at some point, that money will need to be paid back. Whatever increase in economic activity we will see over the next six to ten months will not reduce that deficit by much and this is where things will get ugly. There will be some sort of tax increase within the next year I fear and depending on what this tax package looks like, the damage to the economy may be worse than the pandemic that has killed over 500,000 Americans.
Do not get me wrong. I still feel that the first two relief packages were needed and they functioned exactly as they should have. There is no doubt in my mind, without some Federal intervention, we would be revisiting a depression probably worse than in the ‘30’s. It had all the makings of a disastor that would span a generation. Bad enough school age children have lost years of an education and we really don’t even know the true extent of the toll this has had on this generation. I digress.
We are pulling out of this economic, social and political hurricane finally and things are starting to get back to normal. In the coming months, fingers will be pointed, blame will be spread around to both political parties and yet, the economy will do what it always does, regain its footing.
The costs will be assessed and this is where we need to be very careful. Paying for it all will take political skills few in Washington possess. This is going to another thing that the younger generation will have to deal with and it won’t be pretty.
The point of all this rambling might be lost somewhere in there so I will make it simple. This Covid Relief Package is way too large. The economy needs less and less stimulation and more confidence in what will be done to reduce the final cost. What will Americans be looking at as far as tax increases? Will states unleash the restrictions so businesses will hire?
I, for one am done with this pandemic.