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Bernie and Kamala Want to Open the Bank Vault

It has been a tough year for everybody. Thousands have died from COVID-19. Millions have lost jobs. Kids are out of school, and adults are working from home.

We all react in different ways. If you lose a family member, you may grieve. If you lose your job, you may take up a hobby. If you lose school for your kids, you may try out homeschooling.

If you lose a race for president, you may try to spend trillions of dollars of other people’s money.

Yep, it’s time to hand out the cash. Former presidential candidates Kamala Harris and Bernie Sanders (and also Senator Ed Markey) have proposed the “Monthly Economic Crisis Support Act.”

The legislation would send a monthly $2,000 check to people who make less than $120,000. It would expand to $4,000 to married couples who file taxes jointly and also provide $2,000 for each child up to three. Harris said the bill is a reflection that Congress’s efforts so far were not “nearly enough to meet the needs of this historic crisis” and Markey called the massive cash infusion “the most direct and efficient mechanism for delivering economic relief to those most vulnerable.”

“Congress has a responsibility to make sure that every working-class household in America receives a $2,000 emergency payment a month for each family member,” Sanders said.

The payments would stop three months after the public health emergency officially ends. Given the predicted length of the pandemic, this proposal could wind up providing over two years of monthly payments. Yes, that means a family of 5 could wind up getting $120,000 a year. Great news! I can finally afford that boat that I’ve always wanted.

But at what cost? The potential on-the-ground ramifications are significant enough. Businesses are already struggling to compete with generous unemployment benefits to hire workers, and with those workers receiving large cash payments, wages will have to rise significantly to compete. That will be coupled, however, with a rapid rise in prices as pandemic-related supply chain disruptions (now exacerbated by the inability of manufacturers and suppliers to hire workers) inflict significant scarcity on the marketplace. The inflation would be so astronomical that somewhere Tom Brady just broke into a cold sweat.

And the raw price tag for this proposal is staggering: $600 billion every month. Over two years this proposal alone could balloon the national debt from $25 trillion to $40 trillion, even in the implausible scenario in which all other spending is revenue neutral. That’s a colossal number, one guaranteed to grab attention even from an electorate and political class that is usually inured to complaints about the national debt.

And this is where the cold grip of reality sets in: There is no way this gets past Mitch McConnell.

McConnell has already expressed skepticism about further economic stimulus, saying that it’s “time to begin to think about the amount of debt we’re adding to our country and the future impact of that.” While the worst economic crisis since the Great Depression might seem a politically difficult time to get serious about the debt, an initiative this fantastical will take little effort to dismiss.

Harris, Sanders, and Markey are aware of this, of course. This proposal, instead, serves as an opening salvo in the political debate that grows as the economic crisis worsens in coming weeks. Josh Hawley’s proposal to subsidize employer payrolls is a similar effort from the populist right, demonstrating a bipartisan belief in the need to “do something.” With this week’s grim job numbers, the pressure to act will only increase. The window is already closing for many businesses and workers, and there is a growing consensus that the initial tranches of stimulus were inadequate.

So, something needs to happen, but the question of “what” is completely unsettled. The coming debate will be spectacular, as partisans struggle to find new levels of demagoguery to add to a national dialogue that already invokes concepts like murder (“you are LITERALLY KILLING PEOPLE“) to describe policies that people disagree with. The result will be anger, polarization, and, probably, a stimulus package that nobody likes.

The question is, how much money, and where does it go?


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