THE STIMULUS

Well, it took a global pandemic, but it happened.  Yesterday the US Senate passed President Joe Biden's stimulus plan. It should be ready for him to sign in a few days. While it doesn't have everything he wanted (most notably an increase in the minimum wage), it's still an openly progressive plan.

At a cost of of just under two trillion dollars, it includes an increase in the child tax credit, an extension in unemployment insurance, and lots of money to help schools and hard hit businesses reopen in the coming  months.  It spends about a trillion dollars more than the stimulus plan that Barack Obama passed back in two thousand and eight, and it may be the most broadly progressive aid given to the poor and the middle class that this country has seen since the days of the New Deal in the nineteen thirties.  Oh sure, Lyndon Johnson passing Medicaid in the sixties and Barack Obama's Affordable Care Act in two thousand and nine were also about aiding the poor and the middle class, but they focused on health care.  This bill broadly provides aid to the millions of Americans who have lost ground not only under the pandemic, but that have had trouble keeping up with the economy for decades now.  (Columbia University’s Center on Poverty and Social Policy says that it may reduce child poverty in this country by half. ) Whether these gains will be long term remain to be seen, but it's certainly an admirable goal to try and balance the huge gulf that has grown in this country between the well off and the rest of us.  Especially because, even as the pandemic has raged in this country, the super rich have actually increased their wealth in the past year due to an inflated stock market.

Unfortunately, the bill's passage  also shows the deep divide our nation is stuck in politically: not one Republican in congress supported this bill, and their half hearted attempts at negotiation attempted to reduce the spending in the bill to such a low amount that it would have lost Democratic support.  In some ways it compares to the tax cuts that Donald Trump and the Republicans pushed through congress back in twenty seventeen.  It too had a cost of just under two trillion dollars, and it passed without a single vote from the other party.  But there is a huge fundamental difference in which Americans benefit the most: the Trump tax cut's main feature was a reduction in the corporate tax rate, which mostly benefited the wealthy CEOs and stockholders at those corporations.  While the Biden plan, as I've already stated, puts money in the hands of the poor and the middle class.

As a progressive, it should come as no surprise as to which kind of economic plan I prefer, but it's not just because of my bleeding heart.  There's a fundamental reason why spending on poor stokes the economy better than tax cuts for the rich: poor people are more likely to spend that money faster.  You see, whenever conservatives defend tax cuts for the rich, they say that the beneficiaries of those cuts are the captains of industry, the people most likely to invest in new businesses or expand existing ones which leads to an improved economy that benefits everyone.  The problem with this argument is that when you are talking about the wealthiest of Americans, you are talking about people who already have plenty of money to invest and expand.  It's kind of ridiculous to consider that people like Jeff Bezos and Bill Gates are waiting for their tax cut to kick in  before they start spending!  The poor and the middle class are far more likely to spend that extra money on themselves and their families right away.  Honestly, I think the real reason that Republicans pass tax cuts for the rich has more to do with the huge campaign donations that those rich people make then any notion of economic growth.

It may be that the pandemic, as terrible as it is, may bring about an economic shift in our nation's priorities: if the Biden relief bill brings strong economic growth (as most economists think it will), the public may start believing in the wisdom of government spending as a positive thing, which could lead to things like universal health care and day care.  (And Elizabeth Edwards's wealth tax plan to help pay for them). Perhaps I'm just dreaming, but the Trump tax cut was not popular with the American public and the Biden bill is, so the country's getting there, even if the politicians are taking their time.   A terrible crisis can really change a country, and the end result of the coronavirus could be a push in the right direction.