BIDEN AND ANOTHER STIMULUS CHECK
May 11, 2021 - Douglas Myser
BIden and another stimulus check. As the economy slogs along, moving in fits and starts, struggling with new strains of COVID-19 and increases vaccines getting into the arms of Americans and citizens all over the world, a tough choice has to be made regarding whether to issue another round of stimulus payments. Opponents state that it may lead to increased inflation, while proponents argue that the economy is still fragile enough, that another booster shot would guarantee the solvency going into the summer, when enough Americans would get a vaccine, assuring herd immunity. In between is President Biden and the Congress. Biden and another stimulus check.
In looking for clues as to what President Biden might do, one only has to look at what happened under President Obama, when Biden was the Vice President. After 9/11, and the economic collapse that ensued, Obama was cautious, tried negotiating with the Republicans for too long, and then eventually acted meagerly and the economic recover took much longer than if the stimulus was bigger, according to most economist with a rear view mirror. The number of taxpayers with back tax debts increased, along with the need for Tax Resolution. Of course having the ability to be a Monday Morning Quarterback usually doesn't happen in real life. Yet this moment is akin to such a moment, and Biden may well reflect on the mistakes made then, and act bolder now.
Most economist agree that this is a once in a generation crisis and its no time to waver, but a time for bold initiatives. With interest rates so low, and the fact that Congress has been talking about infrastructure for nearly two decades, the time for both the infrastructure plan and additional spending to prop up the economy is now. The shuttered businesses are a testament to this, and if action is not taken today, then the tax base of tomorrow will be withered and paying down the debt we currently have will take even longer. Biden understand this, the only question is, can he persuade a reluctant Congress to do what the large majority of economist believe is the proper course of action ?