The fantasy of unlimited money

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Tuesday, House Speaker Nancy Pelosi unveiled her vision for the next round of congressional action to respond to the COVID-19 pandemic, and it is a vision of mountains of cash.


Pelosi’s plan would spend $3 trillion, which would make it far and away the largest coronavirus relief spending package to date from Congress. For context, federal receipts in the 2019 fiscal year were $3.46 trillion.


A full $1 trillion in the proposal is earmarked for states, cities and tribal governments, and is intended to plug budget gaps and prevent public employee layoffs.


In addition, it would offer another round of cash payments to individuals, once again at $1,200 for individuals as well as $6,000 per household.


It creates a $175 billion fund to pay people’s rent and mortgages.


The bill would spend $200 billion on “hazard pay” for those workers deemed essential who have been working throughout the crisis.


It maintains the additional $600 per week payments to unemployed workers through January 2021.


It creates an employee retention tax credit, hikes payments for food stamps, spends $75 billion on more virus testing, creates new subsidies for workers who have lost their jobs, and so many other things I’m not even going to bother listing. There’s even $25 million in the bill for the Postal Service.


If you find yourself wondering what kind of universe the speaker is inhabiting that would convince her that these actions are either prudent, or that the federal government can even come close to affording them, don’t bother. There is no trans-dimensional gateway that will bring you to a place where any of her ideas would be rational.


But rational or not, there are those who will try to make them happen.


On May 6, Gov. Janet Mills announced that she was forming an “expert committee” of individuals who would come together to develop “recommendations to mitigate the damage to Maine’s economy caused by the ongoing COVID-19 pandemic.”


One member of this committee is James Myall, a policy analyst for the Maine Center for Economic Policy, a liberal think tank. On Tuesday, Myall tweeted his thoughts on the current state of the world. “We’re in a weird stalemate right now,” he said. “Governors are trying to do a lot with very little money; Washington has almost unlimited money and is trying hard to do very little with it.”


To Myall, and fellow members of the increasingly strident hard-left of American politics, money is a plaything. Government funding is Monopoly money, and the bank never runs dry.


This fiscal year — before the COVID-19 crisis — the federal government was on track for a $1 trillion deficit. On top of that, we have now spent $2.2 trillion on the first round of relief programs, including the now famous Paycheck Protection Program. On top of that is the $484 billion that was added in the second round. So we are already on the hook for a deficit of nearly $4 trillion in a single year, which is itself not even accounting for the revenue drop that will inevitably be occurring in the last months of the fiscal year.


Myall will unquestionably advocate for higher taxes in Maine while serving on this committee. He would likely do the same if he was serving in the federal government.


Yet no amount of class warfare and heavy-handed taxation of the supposedly “rich” can even pay for programs like Medicare of All, let alone the litany of other massive spending proposals featured in left-wing circles. Certainly, it won’t pay for $7 trillion of new debt. It won’t pay for the more than $1 billion hole in the Maine budget next year.


The COVID-19 crisis has had a catastrophic impact on all sectors of American society. It is a serious problem. Serious problems deserve serious answers, and proposals like Pelosi’s, which bear no resemblance to the real constraints and difficult decision making necessary in government, deserve to be dismissed out of hand.


Matthew Gagnon of Yarmouth is the chief executive officer of the Maine Policy Institute, a free market policy think tank based in Portland. A Hampden native, he previously served as a senior strategist for the Republican Governors Association in Washington, D.C.

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