February 8, 2021
$1.9 Trillion Is Too Much Stimulus
The United States entered the COVID-19 pandemic with a federal budget that was on an unsustainable trajectory, and it will exit the pandemic with the highest level of debt in its history. Yet the Biden Administration claims the economy needs another $1.9 trillion in federal spending. In an op-ed for Barron’s, AAF President Douglas Holtz-Eakin examines whether the pandemic-related spending so far has been justified and explains why this latest proposal exceeds the economic need.
The upshot is that the $1.9 trillion request violates the rule that additional deficits make sense only if the spending genuinely addresses the economy’s problems. Any additional pandemic-related spending must be scaled appropriately and target the areas of greatest need. Pretending that any amount of federal spending is justified at this moment is short-sighted and aggravates the hard political realities of controlling spending and raising revenue in the future.