Friday, March 27, 2020

Yea Bipartisanship! Oh wait?

The US will allocate 2 trillion dollars to stimulate the economy ...

Fear can lead us to do some strange things. I believe fear just led us for the first time in many years to have a wonderful bipartisan moment. One where party's united from both sides of the isle to pass one of the worst pieces of legislation in our history. Another rare bipartisan moment came when not only did both sides of the isle pass this bill but they joined in on spewing hate to anyone who dare speak against it. Stopping the bill from moving forward at break neck speed was tantamount to wanting to kill Grandma and the economy, as we saw when Congressman Massie looked like he might stand in the way by asking Congress to follow procedure.

The obvious reasons to be opposed to this bill all seemed to fade into dust behind the bandwagon. What happened to the anger that fueled the Republican party when they didn't have time to debate or even read the massive Obamacare bill. My guess is if we clocked time to pass versus size, this bill would take the cake. What happened to the mocking conversations of "How will you pay for that?" when Bernie Sanders spoke of Medicare for all. I remember when at least one party used to care about that question, before they bowed and rolled over as soon as it might impact their fearless leaders reelection chances.

But put aside the fact that with this bill Trump will likely exceed Obama's record deficit of $1.4 Trillion by two to three times this year, even if we could afford it, this bill would be a bad idea and here is why.

1. Bad bills lead to windfalls-
We all feel badly for people and companies that have lost jobs and revenue due to the Corona virus situation. We would love it if no one lost any money, but do we want to pass a bill that gives people or a company windfalls? Should any of us walk away from this situation with more money than we would have had if this virus never come because congress passes a bill that hands out tax dollars? I hope we can all answer, a resounding, NO! But that is exactly what will happen with this current bill. This bill contains 3 separate windfalls that are likely to occur.
  •  500 Billion in this bill is for large corporations. While it is not very unclear how the 500 billion put in for large corporations will be distributed you can bet that if there is one group of people who know how to show a loss in order to get a gain big corporations will figure out how. I will never forget when President Obama came out dismayed when he found out that large banks they had bailed out used some of the money for big bonuses for it's executives. Well, if you think something similar this time won't happen you greatly underestimate corporations ability to out lawyer, and out maneuver our politicians. Not to mention when Senator Bernie Sanders threatened to add an amendment that would stop any of the money going to corporations that lay off workers, cut wages or benefits, ship jobs overseas, or pay workers poverty wages, it failed. There is zero doubt in my mind some corporations will end up ahead in this one. This will be a windfall for some of them.
  • Another provision adds an extra $600 dollars for unemployment benefits above the benefit that would extend unemployment to full salary for many workers. Meaning that there are many Americans currently laid off that will make more on unemployment than they did working.  (To who does that sound like a good plan?) There were several Republican Senators that tried to add an amendment that you could not make more on unemployment than when you were fully employed, it failed. That is a windfall.
  • But the biggest windfall is the checks to every American. While many lost their jobs the majority of Americans are like myself, and fortunate enough to be working during this time. I have lost 0 salary or benefits during this crisis, my wife lost 0 and my kids don't cost more, or need more money during this crisis. And many of those who did loose work will get 100% of their pay through the new unemployment benefits. So why do we need to send out checks? It's simply a windfall from this poorly crafted bill.
2. This bill punishes those who did the right things. We want people and companies to make wise and prudent decisions. Yet many provisions in this bill punish those who did the right thing.
  • Save for a rainy day- We want to encourage people to save for events like the one we just had, yet when the government increases the money supply by $2 Trillion dollars in one swoop it dilutes the currency. You can't run these type of deficits without causing inflation and inflation lowers and thereby punishes those with savings. If everytime there is a crisis we try to solve it by passing out money and diluting our currency people will learn that only a sucker saves for a rainy day.
  • Try to hold onto your employees through the hard times- Many businesses try to hold onto employees through hard times because they feel it is the right thing to do. They look like suckers today now that this bill passed. If they would have quickly laid people off or sent them home, they would have held onto more money and the taxpayers would have foot the bill for the time their staff was off.
3. This bill encourages bad behavior.
  • Do I as a business want to rush out and rehire my staff, when I know they are making full benefits and pay at home not on my cost? I don't want to risk bringing them back until I absolutely know they will bring me more profits by being in the office than at home. This will slow rehiring.
  • Do I want to go out and find a new job when I am making full salary, plus even more sitting on the couch? It will lead to the mentality of, "I want my old job to call me back and rehire me, just not quite yet." This is bad, bad for productivity, the economy, and bad for developing people. 
  • This bill furthers the lie that we can have our cake and eat it to. We all want to beat Corona virus. We made a decision that it was worth the sacrifice to slow the economy to beat it and save lives. This bill is trying to say we can stop our economy and have zero sacrifice, maybe even get a little ahead. It's a lie.  It will perpetuate the idea that every inconvenience we face in life should be solved by congressional vote and a presidents signature. 
I am sure there are parts of this bill that are good. I am supportive of breaking the piggy bank to fight this virus. Testing, drug trials, vaccine research, cutting red tape to get these things even faster. That is a good idea, hang the costs. But bailouts with little to no strings, free checks to every American for doing...nothing, 100%+ pay for unemployment, these are all horrible ideas and that makes up the bulk of this bill.

So, what am I going to do about it? For one, I will not be accepting my windfall. I am torn between giving it back to the treasury through my taxes or giving it to a charity of some kind. I know it is mostly a symbolic gesture but I hope you will join me in it. And even more importantly, I hope you will not be rushed away with this bandwagon that somehow all the things we know are a bad idea in our personal lives is somehow good policy because someone like Trump or Pelosi peddle it. 

Here is a rebuttal on this from my Brother (click here).

And here is my Father's view (click here).

1 comment:

  1. The give away windfall will indeed weaken the character of everyone who gets it as well as the backbone of the country.

    ReplyDelete