Once again, the United States finds itself in the middle of a huge economic disaster that can only be addressed by monkeying with fiscal policy, and you know what that means: People who already have lots of money think the government ought to be very careful not to spend too much helping the poor.
The current debate centers on the Biden administration's coronavirus stimulus plan, the centerpiece of which — as far as most Americans have been concerned — is a $2,000 stimulus check for Americans making under $75,000 per year, which Democrats had promised in December if they took control of the Senate after Senate Republicans blocked a bill approving the payments. (A stimulus of $600 got sent out under former President Donald Trump and former Senate Majority Leader Mitch McConnell, R-Ky., as part of a failed effort to retain control of the Senate by winning runoff elections in Georgia.)
Related
Now that check will be $1,400 — Democrats say the $600 from the end of the year counts against the total $2,000 — and Democrats are entertaining the idea of lowering the threshold at which even that paltry one-time sum gets phased out.
Among those now leading the charge to deprive as many Americans as is feasible of their economic stimulus checks — alongside Republicans, of course — is the former head of President Barack Obama's National Economic Council and one of the Biden campaign's own economic advisers, Larry Summers.
That the Democrats have allowed this strain of bad-faith hand-wringing over deficits and inflation to fester in its ranks for so long is frankly a little baffling.
In an op-ed warning about President Joe Biden's plan in the Washington Post on Thursday, Summers fretted that a family of four with one working adult and an annual household income of $52,000 — which is far less than the United States' median household income of $68,703 in 2019 — would end up earning too much money for the economy to bear. Specifically, he posited that the family would end up with almost one-third more take-home pay (once tax credits, which wouldn't be paid out until 2021, were added in), were the working adult to be laid off and eligible for the Biden plan's supplemental unemployment insurance and stimulus check. (The family would still end up with less than the median income during that time.) That, he said, might set off inflation.
It’s a particularly weird stance for Summers to take. In 2018, a group of authors writing at the Brookings Institution proposed raising the target inflation rate, calling current monetary policy inadequate to the task of averting or rescuing the country from a recession. If we don’t adopt some flexibility, warned the lead author, “we will put ourselves at risk of very substantially exacerbating the next recession with grave consequences for lost output and employment and quite possibly matters of political economy as well.” That author was Larry Summers.
Related
Biden was blunt in his dismissal of Summers' Chicken Little act: "The one thing we learned is we can’t do too much here. We can do too little. We can do too little and sputter." (It was a clear reference to Summers' prior advocacy for a smaller stimulus package during the Obama presidency.)
In part because he was known to be taking Summers' advice as a candidate, progressives have been leery of Biden's potential economic policies since it became clear that he would be the Democratic presidential nominee. So it was a great relief to see Biden pointedly reject the advice of Summers, the former president of Harvard, the treasury secretary under President Bill Clinton, the architect of much of Obama’s high-minded fiscal paternalism and someone who believes, despite evidence to the contrary, that women have biological inhibitions preventing them from being great at math.
For the Republicans, at least, it is an easy calculus to deny this money.
But that the Democrats have allowed this strain of bad-faith hand-wringing over deficits and inflation to fester in its ranks for so long is frankly a little baffling. Democratic constituents like robust public works, assistance that isn’t humiliatingly means-tested to make sure people are deeply impoverished enough to really, really need the money and child care programs. But there is still, somehow, a political aversion to really pushing for these programs.
And the counterproposals to the Biden plan don’t allocate more for people who are truly poor, after all — they simply take money away from those deemed not poor enough to really, really need the money.
Related
It is — as New York Times columnist Jamelle Bouie observed on Twitter — almost as though Republicans and some conservative Democrats are less concerned about the efficiency of the stimulus as ideologically opposed to giving money to people who don't have enough of it to make ends meet.
After all, Trump’s tax cuts cost the government trillions in revenue and went to a relatively small few who already had money. But now that Biden wants to spend a smaller — if still staggering — amount on vastly more people to help them pay for vastly more vital resources like food and shelter, somehow it just doesn’t seem as urgent or prudent to the people holding (or grasping at) the purse strings to shell out for it.
The only way to build a working society that isn’t simply a playground for the rich at the expense of the poor is to make public benefits truly public.
For the Republicans, at least, it is an easy calculus to deny this money. The party has fled from any pretense of caring about the working class beyond trying to unite rich and poor around ingrained prejudices against women, people of color, sexual minorities and foreigners and to use those prejudices to cast suspicion on government activity by suggesting that all public programs somehow benefit those other people disproportionately. So whenever Democrats make the government function successfully in service of the broadest swath of people — unlike Trump's tax cuts — they make liars of Republicans' claims about why Democrats want to run the government. Thus, forcing Democrats to break their promises on stimulus checks and provide only miserly payouts to Americans is a completely reasonable part of their dreadful project.
For Democrats to acquiesce to that plan makes less sense. Why does the party countenance people who want to means-test sidewalks?
Related
Unfortunately, in the post-Reagan era, the myth of "Reagan Democrats" has allowed or enticed some Democrats to spend the last decades repeating Reaganomics talking points about who deserves what public assistance and how it ought to be administered. Those talking points are lies designed to make people embarrassed to receive money or services from their government so they will look down on the people who aren’t or who are too poor to care. (Often, those latter people are assumed to be Black and brown; that is part and parcel of the talking points.)
But the only way to build a working society that isn’t simply a playground for the rich at the expense of the poor is to make public benefits truly public; taking stimulus payments or health care should be as boring and rote as mailing a letter. Otherwise we’re all on our way to a new Gilded Age, where instead of a public post office, all we will have is Amazon (quietly surveilling our neighborhoods and selling the footage to the police); where instead of a government taxing us to provide public goods, corporations can and will impose taxes for their benefit; and where, instead of health care for all, private equity owns a controlling interest in all the hospitals and profits off of our poor health. We can have that, or we can have civilization.
We can wring our hands at the idea that someone, somewhere, might get a little too much stimulus and deny many people the money they need, or, as Biden said — and to which we must hold him — we can learn from a past when we did far too little and suffered for it.