Haven’t the millennials suffered enough already?
That question should weigh on Congress as it considers another round of economic stimulus in response to the coronavirus pandemic. Yes, the economy needs a boost. Although businesses are starting to reopen, many are operating at reduced capacity while others remain closed. Many workers are on reduced hours, if back to work at all. Businesses also must invest in safety equipment and new processes and configurations to guard against the virus.
But Congress should be prudent in determining what aid to give and how much. To provide money, the government will have to borrow — borrow from the future of the millennials and following generations.
At issue is legislation to deliver direct payments, loans, grants and subsidies to help individuals and businesses cope with the impact of the coronavirus. Taxpayers should demand that the Senate to be wiser than the House, which last month passed its version: a $3 trillion monument to fiscal irresponsibility piled on top of $2.7 trillion in earlier coronavirus bills. The entire federal budget for 2019 was $4.4 trillion.
The Democratic-controlled House used the 1,800-page bill as an opportunity to insert favorite spending programs, whether related to the coronavirus crisis or not. The bill includes such partisan extras as a $25-billion bailout for the U.S. Postal Service and a requirement that states implement early voting. The bill even repeals the limit on state and local tax deductions, giving a break to wealthy taxpayers in high-tax states, which tend to vote Democratic.
All that spending must be covered by borrowing. The Treasury will sell bonds, to be paid off over time with annual interest. Although the Federal Reserve Bank will buy some bonds and return the interest to the Treasury, the added debt, from money created by the Fed, will increase the risk of inflation and force higher taxes and/or cuts in services and social programs. Those costs will fall heavily on the millennial generation and its descendants.
Millennials, born between 1981 and 1996, have already taken hits to their careers and retirement savings, as well as plans for homes and families, from not only the coronavirus but also the financial crisis of 2008-09. To burden them with more federal debt beyond what’s necessary is reckless.
The Senate should hold the cost to half the House version. The focus should be on grants and loans to small- and mid-sized businesses to keep workers employed. U.S. Sen. Ron Johnson, R-Oshkosh, has published ideas on business aid that deserve discussion, including how to make the aid easier for businesses to use and limit it to businesses in need.
Direct payments to individuals also deserve discussion. But the House plan to deliver another round of $1,200 payments, while expanding them to higher income people and including $1,200 payments for up to three dependents, is excessive. So is the House plan to extend the extra $600 being added to weekly unemployment benefits. Those added payments have proved a disincentive to return to work because two-thirds of unemployed workers make more on unemployment benefits than at their old jobs.