National Review Online
Saturday, March 14, 2020
Congress is acting fast to respond to the coronavirus
epidemic — faster, indeed, than Congress can think. President Trump and Nancy
Pelosi agreed on a spending bill that the House passed before anyone knows its
cost or has had time to review its provisions. The Senate seems likely to
follow suit.
It is important to remember, in evaluating the bill, that
it should not be considered as a typical “stimulus” measure to combat a
recession. Congress should be focused on four tasks: slowing the spread of the
virus, aiding the treatment of those infected, providing relief for those
adversely affected by both the virus and the efforts to fight it, and
supporting the overall economy. These tasks sometimes overlap and sometimes
conflict. In a normal recession, we would want to make sure that legislation
does not discourage people from working. This time, at least for the short term
and in many instances, we actively desire people not to go to work.
The bipartisan deal includes a provision to fund sick
leave, the logic being that people who have the coronavirus should not feel
pressure to go to work, and infect others, because they need the money. That
logic may be too limited. Quick cash payments to a broader population may prove
both easier to administer and more effective, since we do not want people to
show symptoms and know they are sick before isolating themselves. They would
also do more to compensate those who are going to face hardship as a result of
the epidemic.
Increased payments to state health systems are also
included. The details matter: We ought not heighten the post-Obamacare Medicaid
program’s incentives for states to concentrate on able-bodied people above the
poverty line. But in this area too, the basic imperative is clear.
Halting the spread of the virus and providing for
treatment are ways to support the economy, albeit indirect ones. The Federal
Reserve has more-direct responsibilities. Those should include additional
reductions in interest rates, as President Trump has repeatedly urged. Rapidly
declining inflation expectations are a sign that economic weakness has gone
well beyond supply-chain disruptions. Among the many inversions of the moment
is that the legislature is being a bit too hasty while the central bank is too
slow.
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