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Sunday, March 15, 2020

Biden Promises 'Major, Major, Major Bailouts' in Response to Coronavirus

By Eric Boehm - March 15, 2020 at 10:05PM

During the opening moments of Sunday's one-on-one Democratic primary debate, both former Vice President Joe Biden and Sen. Bernie Sanders (I–Vt.) promised massive coronavirus bailouts that would cover a huge range of potential economic losses.

"We are going to have to have a major, major, major bailout package that—we do not reward corporations, we reward individuals who, in fact, are really put to the test here," Biden said. Moments later, he offered a few specifics: The funding would include everything from covering missed rent and mortgage payments, child care costs, medical bills, and more. "We are going to have to go beyond that," he said. "Like we did during the financial crisis."

Sanders made an even more far-fetched promise. "Our job right now is to tell every working person in this country, 'no matter what your income is, you are not going to suffer as a result of this crisis,'" he said, before adding that all Americans would "be made whole" for losses suffered because of the coronavirus.

A few points here.

First, yes, the country appears to be teetering on the edge of a crisis unlike any that it has faced in a long time. Many are facing or will face illness. Millions of people are likely to be at least temporarily out of work as a result of the measures being taken to slow the spread of COVID-19. It is understandable—and maybe even electorally prudent—for these two men to promise that they will do everything they can to fix this mess.

Second, there is an absolute limit to what the government is able to do in response to a pandemic. Biden says this is "like what we did during the financial crisis," but what he's proposing goes far beyond what was done to bail out banks, automobile manufacturers, and other businesses affected by the mortgage crisis and the subsequent economic downturn. And those bailouts were bad deals for taxpayers. A bailout that prioritizes individuals might be marginally better than a cronyist deal, but until Biden puts a price tag on his proposal, it's simply unbelievable.

What Sanders is proposing is more difficult to ascertain, but seems more unhinged. How, exactly, would the federal government go about the process of determining how much money is owed to every person who suffers some kind of financial loss due to the coronavirus? Would he extend that same protection to investors—perhaps even to his much-reviled class of "millionaires and billionaires"—who have surely lost a lot in the stock market over the past week?

Third, it's easy for both Biden and Sanders to promise all kinds of things in response to the coronavirus when they both know that they won't be president until January, nearly a year from now. They may have to address the long-term consequences of whatever happens over the next few months, but they will not have to confront the issue directly. Indeed, they get to spend the next few months promising that, no matter what the Trump administration does, they would have done "more" or "better."

And that's true despite the fact that Trump is currently pushing for a massive spending package (perhaps as much as $50 billion) that is likely to include paid sick leave for workers, expanded welfare programs, and a bailout for travel industries.

In that regard, it makes perfect sense that both spent tonight's debate promising vague and wide-reaching fixes. They both know they won't have to implement them.


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