President Biden urged Senate Democrats to go big on coronavirus relief, making an aggressive case in favour of his $1.9 trn rescue package as Democrats took the first steps to advance the legislation.
President Biden is facing a crossroads as he decides whether to work with Republicans on a coronavirus relief compromise or go for a larger package that likely won't garner any GOP support.Biden has repeatedly said he wants the COVID-19 bill to be bipartisan - underscored by his campaign and post-election push for unity - but is also adamant that a stimulus bill must pass, with or without GOP lawmakers.Democratic leaders in Congress started.
This is wrong on several fronts.
First, the stimulus spending that took place in the wake of the Great Recession was ineffective at creating jobs, and in some ways slowed the economy by creating perverse incentives and crowding out private activity.
Second, despite the difficulties associated with the pandemic, the economy is currently in much better shape than it was during the last recession.
The national unemployment rate hit 10% in October 2009 and stayed above 8% through August 2012. In contrast, the COVID-19 recession caused unemployment to spike to 14.8% in April 2020, but it fell below 7% by October.
Third, Congress has already approved over $4 trillion in response to the pandemic, much of which is still available or in the process of being distributed. The idea that Congress has been “undershooting” the response is ridiculous.