Its done: President Biden signed the American Rescue Plan Act, the $1.9 trillion Covid relief bill, into law last week. But this doesnt mean Uncle Sam is coming to the rescue. Instead, taxpayers are again getting fleeced to fund Democrats allies. The ARPA isnt about economics. Its about politics.
The law has little to do with the pandemic. Bailouts for long-insolvent pensions and fiscally irresponsible local governments wont help combat the virus. Instead, the law is a left-wing wish list, rammed through under the pretext of boosting the economy.
As an economist, I cant let stand the claim that we need the ARPAs spending injection for the economy to recover. Contrary to its defenders, our current economic problems have little to do with anemic spending.
The performance of the economy depends on both the supply side and the demand side. The supply side has to do with the availability of labor, capital and natural resources, as well as the technology we use to transform those inputs into valuable outputs.