Few things seem as gratifying to so many as letting loose over social media on whoever has been judged and found popularly wanting. Over the last week, one of those so lacking individuals has been Larry Summers, currently a professor at Harvard’s Kennedy School of Government and formerly a resume running through Harvard University’s presidency, the World Bank, the Clinton and Obama administrations, and lord knows what else.
The thoughtcrime that Summers committed was to say out loud on Bloomberg TV, “I don’t think the $2,000 checks make much sense.”
Outrageous at first glance. People are badly hurting. Millions have been out of work for many months, there was no additional aid from July through December, and a good number of them face potential eviction. Except not until after January because the Covid-19 relief bill that finally got passed and signed after nine months of effective inactivity by Congress and the Trump administration. The new law includes a one-month extension. Now, instead of having to move out into the cold in January, affected people can wait until February. Almost a Valentine’s Day gift.
Summers is quite capable of placing both feet in his mouth. It’s a significant part of why he received a vote of no confidence by Harvard’s faculty.
But this case is different. He may have explained himself badly and even unfeelingly, but Summers was right.
He was talking about general stimulus checks sent to pretty much every adult citizen. Discussing the economy during a pandemic, he said that much of the fiscal woe “is from the fact not that people don’t want to spend but that they can’t spend. They can’t take a flight, or they can’t go to a restaurant. I don’t necessarily think that the priority should be on promoting consumer spending beyond where we are now.”
Summers meant people who still had jobs and incomes, and in that sense, he is absolutely correct. People with money still have it. That’s not what’s stopping them from spending. It’s that they feel endangered going out and mixing with others. Well, except for those people who run around without masks and claim that there is no disease.
“I would like to see more assistance to state and local governments,” Summers further said. “I would like to see more money put into testing, more money put into accelerating vaccines.”
There can be no argument that the stimulus bill Congress passed should be implemented immediately, even though it is too late and too little. As I have observed, it fails to support the states and localities as they try to rehire teachers and health-care workers. It does too little to accelerate the availability of the testing necessary to put Covid-19 in the rearview mirror. And its one-month extension of the eviction moratorium and 11-week extension of unemployment insurance are clearly far too short-term.
Exactly. Concentrate the money on those who need it most—the people who are still unemployed or otherwise in dire straits. For example, with maybe 10 million still getting unemployment, forget the stimulus checks. Instead, retroactively resume the $600 a week federal payments that supplemented state unemployment. That would be 26 weeks’ worth, or $15,600. Then keep it going for a few months more, rounding the amount up to $22,800.
That’s enough to help people stay in their homes or apartments, catch up on bills, afford food, and such other things that, yes, do stimulate the economy. And mean the difference between life and desperation. The $600 stimulus payments—or $2,000 payments if anyone could get them past Mitch McConnell in the Senate—are piddling in comparison. Plus, the total price tag of $228 billion would still be a lot less than the $464 billion the Washington Post estimates that a round of $2,000 stimulus payments would run.
That’s why Summers is right. And the Post editorial board, by the way, agrees with Summers that the general distribution of new stimulus payments “short-shrifted the neediest and showered billions on people who suffered little or no lasting hardship from the pandemic.”
Give real help to those who need it and let’s not pretend that a single stimulus payment was ever going to do the job.