Funny Money

Senator John Cornyn (R-Texas), commenting on the proposal brought to the Senate today to consider H.R. 9051, said:

“This is all funny money, borrowed money at this point, and that’s another consideration…I mean, [we’re] being just frivolous about the way we spend money and rack up debt. I think people are willing to do what we need to do if they feel like it’s an immediate need and it’s an emergency, which we have already done and we’ll probably continue to do.”

Washington Post, 29 December 2020

Now That You Mention It…

Let’s consider the Senator’s  points:

Borrowed Money is Funny Money?

Congress has for many years hidden the cost of programs by borrowing the funds required so that Congress could safely pass cuts to personal and corporate taxes. Consider the ratio of our debt against our General Domestic Product (GDP): Currently, our GDP–Debt ratio is 136%. This trend cannot be laid on any particular President of political party.

Has Congress Been Frivolous?

I guess the answer lies in how each of us views frivolity and how we want Congress to pay for the things we want and need. If we want great public expenditure for national defense and social programs—such as unemployment, transportation, utilities, education, and nutrition—but we also want our taxes cut, then we support ever increasing borrowing to pay for these things. So, if borrowed money is funny money and borrowing to pay for government is frivolous, then…

Is The Senate Willing To Do What’s Needed?

The Congress did not hesitate to pass the CARES Act in March 2020, when it was apparent that the pandemic could result in major losses to businesses and serious unemployment. When it became apparent that the personal and economic effects of the pandemic would extend beyond the sunset provisions of the CARES Act, however, the U.S. Senate opposed extensions of those CARES Act programs and funding.

Is There An Immediate Need?

A recent report states that:

“The unemployment rate is very high and millions report that their households did not get enough to eat or are not caught up on rent payments.”

Center on Budget and Policy Priorities

Whether this describes your situation is a matter only individuals can address. The latest U.S. unemployment rate—6.7%—was published by the Bureau of Labor Statistics on November 4, 2020. According to Forbes, the poverty rate in the U.S. increased from 9.3% in June 2020 to 11.7% in November 2020.

It seems that, for many of us and our fellow citizens, there is an immediate need for assistance.

Is This An Emergency?

If someone cannot feed himself, herself, or those for whom she or he is responsible, there’s an emergency. If someone is being evicted and has no place to live, even temporarily, there’s an emergency. If someone has no job and no likelihood of obtaining a job, there’s an emergency.

Whether any of these conditions apply to you is not known to me; I have faced each before and may soon face them again.

References

  1. H.R.9051To amend the Internal Revenue Code of 1986 to increase recovery rebate amounts to $2,000 for individuals, and for other purposes.
  2. H.R.133Consolidated Appropriations Act, 2021
  3. PLAW 116-136Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
  4. CBPP: COVID Hardship Watch

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