Darrell Berkheimer: Is stimulus plan skimpy, off target? | TheUnion.com

Darrell Berkheimer: Is stimulus plan skimpy, off target?

Congress members are raising questions about President Joe Biden’s $1.9 trillion stimulus package, suggesting it’s too big, too much, and will give money to wealthy Americans who don’t need it.

But when Biden’s plan is compared with the stimulus spending plans of more than a dozen other modern, industrialized nations, the question really is whether the U.S. will be doing enough to keep our economy from collapsing.

The other countries are emphasizing more continuous support with monthly payments to workers rather than one, two or three sporadic payments to households. They range from as little as $257 a month in China to Sweden’s 90% of wages lost and Japan’s most generous package that provides 100% of furloughed workers’ wages.

(The stimulus allocations for another 11 countries are listed below.)

A bipartisan group of 16 senators raised their questions and objections during a conference call with President Biden. During that call, two centrist Republican senators — Susan Collins of Maine and Mitt Romney of Utah — were joined by Democrat Sen. Joe Manchin of West Virginia in saying they think the proposed $1,400 direct payments should be reserved for low-income Americans.

Collins specifically questioned why families making $300,000 could be eligible for the payments, Politico reported.

Also participating in the call was Sen. Angus King, Maine independent, who expressed concern about the overall cost. King said, “This isn’t Monopoly money,” Politico noted.

President Biden responded by citing his willingness to negotiate on those issues. He said, “Well, there’s legitimate reason for people to say, ‘Do you have the lines drawn the exact right way? Should it go to anybody making over X-number of dollars, or why?'”

His willingness to negotiate is an indication of how Biden recognizes the need to move quickly to bolster our faltering economy.

The targeting questions are most appropriate. Why should households with six-digit incomes, to as much as a quarter of a million or more, receive payments of $1,400? How much of that money will be banked or invested rather than immediately spent to bolster the economy?

In contrast, households below or near the poverty level will be spending all of that money immediately, and most likely on food and other necessities.

It is the immediate spending of the stimulus money that is most important, because the more that money circulates from one hand to the next is how it will best buttress and strengthen our economy.

And it is the unemployment supplements that are needed the most — again because that money will be spent immediately. That is why the other countries are concentrating their economic packages in that area.

Canada is providing up to 75% of wages lost by furloughed employees in small- and medium-sized businesses, in addition to boosting child benefit payments.

UK is paying 80% of lost wages up to $3,175 per month, plus grants up to $9,500 for out-of-work freelancers.

On the lower end, South Africa, which has had one of the strictest lockdowns, is providing up to 60% of wages, but the cap is set low at only $400 per month.

In Europe, Italy — one of the countries most affected by the pandemic — is providing up to $900 per month to support 12.6 million furloughed workers. Meanwhile, Spain is paying up to $1,150 per month per household.

In New Zealand, laid-off employees and out-of-action freelancers are receiving up to $1,520 per month. And Australia is providing Job-Keeper payments up to $1,040 every two weeks.

Back in Europe, Denmark has been paying up to $4,540 monthly to those who lost salaries. In addition, freelancers and small-business owners are eligible for up to 75% of lost revenue. And France is providing up to 84% of net salary, plus 100% to workers receiving minimum wage.

Germany is paying households up to $7,900 per month, which is going to more than 10 million workers. And The Netherlands is among the most generous with payments up to $10,780 per month, plus open-handed financial support to struggling freelancers.

The source for these payments by each of the countries is a Money magazine article by Daniel Coughlin, who also listed figures for a number of smaller nations.

Going back through the list, it’s obvious many of the other countries are treating their unemployed workers much better than the United States despite our nation’s reputation as the richest country in the world. Unfortunately, 90% of those riches are concentrated in the top 5% to 10% of our population.

The figures show that most of the other nations are doing a better job of targeting continuing support rather than sending flat payments to households, some of which may have workers who are still fully employed.

So our senators are raising some very valid points about targeting. But they need to complete their negotiations quickly as the delay poses a mounting threat to our economy.

A number of our nation’s top economists are warning that providing too little can create worse problems than approving a bigger than necessary stimulus package. A bigger package can be cut back a little if warranted.

Darrell Berkheimer, who lives in Grass Valley, is a frequent contributor to The Union. He has eight books available through Amazon. His sixth, Essays from The Golden Throne, includes 60 columns published by The Union, plus a dozen western travel and photo essays. Contact him at mtmrnut@yahoo.com


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