Some of the so-called moderates in the U.S. Senate have come up with a new stimulus bill.  The price tag is a mere $908 billion. In 2020, this doesn’t seem that big.

If you divide it by the number of households in the United States, this will put a different spin on the whole thing.  908 billion divided by 128 million (approximate households) is just over $7,000 per household.

But before you get too excited, don’t expect a check for your household in the amount of $7,000. In fact, if you are not unemployed or a business owner, your portion should equal approximately zero. Or maybe more accurate, your portion will be -$7,000, since you’ll still have to pay for it in some way.

When people talk about “moderate” politicians, it usually just means they favor big government on all of the issues.  In the case of domestic spending, it is no surprise that Mitt Romney would favor massive spending that largely goes to corporate interests and other governments.

Here is a list of the breakdown of the $908 billion proposal.

Notice that there is no direct “stimulus” check.  While I abhor the idea of a universal basic income (UBI), at least I derive some benefit out of it.  I get some of my own money back.

If this legislation goes through, I will get no benefit out of it whatsoever.  Most other Americans can make the same claim. Instead, it is just more massive spending that will be mostly paid for through Federal Reserve monetary inflation.

Perhaps the worst thing about this legislation is that it is the ultimate moral hazard.  It will only encourage more lockdowns and restrictions coming from state and local governments

The Lockdown Bailout and Federalism

Take a close look at everything in this bill.  Virtually every piece of it will disproportionately go to states with heavier lockdowns.

The bailouts for state and local governments is the obvious piece.  This will just bail out governments that have vastly overspent and find themselves in a major hole.  This is an obvious moral hazard.  It will allow these state and local governments to continue on, at least for a while, with reckless spending.

But look at the other 2 major pieces of this legislation.  There are major supplements for unemployment benefits, and there are handouts for businesses.

These will disproportionately favor the lockdown states.  These are the states that have put more small businesses under or on the brink of being under.  These are the states that have put more people out of work.

So if state and local governments can lock down and not feel the fiscal consequences of doing so, they are likely to do more of it.

The state of California is locking down hard again.  Like almost everywhere else, the state budget and the local government budgets will be pinched.  They will have a reduction of tax collections while at the same time having more welfare to hand out.  But if the governments are being bailed out, and their victims are being partially bailed out, it gives California a pass to continue the lockdowns and restrictions.

Meanwhile, in a state like South Dakota that has stayed mostly open, it will have to help fund the bailout of California.  South Dakota isn’t going to have as high of a percentage of unemployed people and failing businesses.  The people of South Dakota will have to help pay for the lockdowns in other states.

There aren’t many positive things in 2020, at least politically speaking.  One positive though is that we have seen a certain degree of federalism.  Even though the federal government has promoted the hysteria and recommended lockdowns, it was left up to state and local governments to impose them. I am happy to live in Florida, which is one of the few states open for business now.

This bailout legislation helps to destroy some of that federalism.  While I will continue to be happy to be in Florida, it is rather disgusting that I will have to pay for the actions of the tyrants in places like California and New York.

This is why the issue of states’ rights is so important.  It isn’t really the states that have rights.  It is the people residing in those states who should have the right to not have to pay for the idiotic policies endorsed by the people in California and New York. 

I fully understand that there are many people in California and New York who don’t endorse these lockdowns, but it is up to them to work to change the policies or to move out of those tyrannical states.  The people of Florida and South Dakota should not have to support this tyranny.

I can only hope that some politicians who call themselves conservative Republicans will stand up to this.  There were barely any standing up to the enormous spending back in March and April.It is important to oppose these bailouts not just for fiscal reasons, but also because it is a form of moral hazard.  These bailouts will just encourage and enable more lockdowns in the future.