Relief So Good, It Hurts
After weeks of semi-official statewide quarantine, personal and business finances are dangerously strained. Current projections for COVID-19’s peak transmission nationwide are still about five weeks away, so this economic downturn may get far worse before it gets better. The household stimulus check in the works will take some of the sting away, but it is too little too late, and may prove to be more harm than help.
As government has encouraged – if not outright demanded – that the workforce “shelter in place,” the resulting statistics look grim. Anne D’Innocenzio of AP News cites that 50% of all retail showroom space nationwide has been closed due to COVID-19. Forbes’ Senior Contributor Pamela Danziger observes that household debt has surged to $1.4 trillion over its peak in 2008 just before the last major recession. Contrast these facts to the proposal for a household one-time stimulus check of $1200. When long-standing jobs and businesses will be closed for good after this mandated shutdown, having one month’s rent/mortgage will be little consolation.
Supply-side stimulus will also hurt us in other predictable ways. The Taking Responsibility for Workers and Families Act (H.R. 6379) injects $2.5 trillion – unprecedented in all legislative history – into politically connected industries and institutions. The main problem is that government does not actually have this money, so it prints the money into existence. This is like rubbing a lamp and rousing a mischievous genie. Sure, he grants your wish for a million bucks… but you awake in the morning to discover that overnight the genie also granted a million bucks to everyone else, so suddenly your million buys far less!
COVID-19 has caused a worldwide crisis, and we Libertarians are not unsympathetic because after all we’re all in the same boat. Instead of federal slush funding the demand and supply sides of our economy, imagine the relief of having your federal income taxes waived for the rest of FY2020. For some of us that amounts to another $1000 kept in pocket for every month. Imagine significantly raising the tax threshold to exempt our poorest citizens whom the economic downturn has hit hardest.Imagine foregoing the capital gains tax so that businesses can better afford not to furlough employees.You may think these proposals crazy, but you’re guaranteed to remember them when your stimulus check finally arrives… with taxes accordingly pre-deducted!
“Liberty Minded with Dan Donnelly”
April 6th, 2020, published in The Mountain Eagle distributed in Schoharie and Greene counties
