No More “How Will You Pay For It?”

Stony Brook University professor of economics Stephanie Kelton wrote about the recently passed $2 trillion coronavirus stimulus for the Intercept:

Congress has ignored millions of people who have existed in a state of crisis for decades. The people of Flint, Michigan, (and elsewhere) still do not have safe drinking water. Millions of kids go hungry each day. Half a million people, before the pandemic, were homeless on any given night. And on it goes. There has been no multitrillion-dollar spending bill to combat these and other domestic emergencies. Instead, lawmakers have deprived communities of critical investments that could have attenuated their emergencies, often hiding behind the excuse that there isn’t enough money in the budget to deal with problems like these.

She would know. Kelton served as the chief economist for the DNC on the U.S. Senate Budget committee (2015/2016). This article elucidates the methods Congress uses to pass a budget that is ‘paid for’. But the stimulus is not paid for.

That is not what Congress is doing today. Instead of writing a bill that would send two sets of instructions to the Fed, Congress is pushing through a $2 trillion spending bill that will send just one set of instructions. No one is bothering to try to offset — i.e. “pay for” — that spending, because the goal is to get lots of money to people (and companies) without subtracting a lot away.

I keep thinking about republicans and liberals hyperventilating about the ‘cost’ of some of the progressive movement’s policies: Medicare for All, cancelling student debt, tuition-free college, etc. Many of these could be ‘paid for’ yes, by raising taxes on the wealthy. Or they could have been wiped away with a stimulus similar to this one. Arguably keeping money in everyday working people’s pockets during a crisis would have eased the trauma.