Will total cost of stimulus package create a huge burden?
By Tom Tracy | Jamestown
As the coronavirus hopefully comes to a close there are several questions that many people have in regard to how this crisis is being handled at the federal level.
There can be little doubt that it was necessary to help businesses, especially smaller businesses, from going under with a stimulus package. But will the total costs of this stimulus package, $2 trillion, create a huge burden on the U.S. economy in the future, and was all of it necessary?
During the 2009 financial crisis, most of the stimulus money was in the form of loans ... most of which were paid back to the government. In the current package, $1 trillion will not be paid back. More than some of this amount includes money not directly related to the current crisis.
A democracy's biggest challenge arises when it confronts a major crisis during an election. Where both political parties should seriously debate the crisis, it inevitably turns into political posturing.
The current stimulus package increased federal spending by half. The deficit is now 4 times higher than what it was before the crisis.
This is occurring at a time when 23 million people are out of work (and growing every day). Which means 23 million people are no longer paying taxes. Which means 23 million people are receiving federal taxpayer dollars ... a double whammy if ever there was one.
Federal borrowing this year is set to pass 20% of the gross domestic product. I fully agree everybody needs to learn what they can about the coronavirus. But everybody also needs to learn what borrowing up to 20% of our gross domestic product will mean to our future economy!
It is said that we are "at war" concerning this pandemic and I agree. But during a war very tough decisions are made.
It takes statesmen, not politicians, to make these tough decisions. We have had them during past crises. Do we have them today?