Pres­ident Donald Trump and Speaker of the House Nancy Pelosi (DoD photo by U.S. Air Force Staff Sgt. Mar­i­anique Santos) | Courtesy Wikipedia

While sitting in front of the muted TV, which was turned to the news, I sat and read a section of Slavisa Tasic’s paper “Are Reg­u­lators Rational?” for my Behav­ioral Eco­nomics class. The title of the section my pro­fessor assigned is called “Illu­sions of com­pe­tence.” It argues that reg­u­lators — and people in general — over­es­timate their under­standing of complex things like the market economy when making policy. 

“Reg­u­lators over­con­fi­dently believe that they under­stand how markets exactly work,” Tasic wrote, “and that their under­standing of markets is… suf­fi­cient to enable them to com­pe­tently con­ceive the policies that would improve the working of the market or lead it toward some desired out­comes.” 

I looked up from Tasic’s paper every few minutes, only to see talking heads arguing for or against some part of the stimulus bill Con­gress was scram­bling to put together to address the coro­n­avirus crisis. 

Late Wednesday night, the Senate approved a $2 trillion stimulus bill to help fam­ilies and busi­nesses during this time of uncer­tainty and upheaval brought on by COVID-19. This is the largest emer­gency relief bill in the history of the United States. 

But the current iter­ation of the bill has some major flaws — even beyond its ungodly price tag. Members of Con­gress are con­fident they can accu­rately address a problem that even the best medical experts and econ­o­mists are strug­gling to grapple with, if only they had enough money. 

It’s an unprece­dented amount of spending for an unprece­dented crisis. 

Everybody — including some lib­er­tarians — is advo­cating for some type of payment for fam­ilies to survive and business to stay solvent. Even Gary Wolfram, pro­fessor of Eco­nomics at Hillsdale College, said that Con­gress should do some­thing to help the country:

“I truly think this relief effort could be bipar­tisan,” Wolfram said in an email. “If the author of ‘A Cap­i­talist Man­i­festo’ who has been at Hillsdale College for more than 30 years can support this gov­ernment inter­vention, then both sides of the aisle should be able to.” 

He said gov­ernment closing busi­nesses is the main cause of eco­nomic dis­tress.

“Most of the eco­nomic problems are being caused by gov­ernment action shutting down busi­nesses of all kinds. This may be nec­essary to slow the spread of the disease, I obvi­ously am not an epi­demi­ol­ogist…”  Wolfram said. 

The financial pain many American fam­ilies and busi­nesses are feeling is no joke — the unex­pected shut­downs caused a record 3.28 million people to file for unem­ployment last week, Sarah Chaney, John Hilsenrath, and Eric Morath reported in The Wall Street Journal. 

The bill will undoubtedly help many busi­nesses and fam­ilies to survive in the next few weeks.

Indi­viduals whose gross income is less than $75,000 and couples who make less than $150,000 will receive a one-time check of $1,200. The check will be trimmed for those with higher incomes, and indi­viduals making $99,000 and couples making $198,000 will not be eli­gible for the check

The bill allo­cates $350 billion for loans to small busi­nesses and $500 billion in cor­porate aid. It’s important to keep our busi­nesses of all sizes alive so that, once released from quar­antine, people have some­where to go back to work, and our economy can (hope­fully) return to normal. 

The bill seeks to combat some shortages of medical sup­plies by allo­cating $100 billion to healthcare providers and $16 billion to stockpile medical sup­plies. It also allows dis­til­leries to make hand san­i­tizer to combat shortages

But the bill has some major down­sides. 

For one, it will raise this year’s deficit by $2 trillion. By the end of this fiscal year, our national debt will be more than $25 trillion dollars. The Gov­ernment Account­ability Office called our government’s current spending pat­terns — even before the threat of a global pan­demic — unsus­tainable. 

The stimulus bill includes allo­ca­tions to groups that are entirely irrel­evant in this crisis. Speaker of the House Nancy Pelosi has lan­guage in the bill allo­cating $25 million to Washington’s Kennedy Center for the Per­forming Arts. There’s also $75 million for the Cor­po­ration for Public Broad­casting, $75 million each for the National Endowment for the Arts and National Endowment for the Human­ities, and $250 million for the Internal Revenue Service.  

The most out­ra­geous and unnec­essary expen­diture is an addi­tional $25 million for salaries and expenses for the House of Rep­re­sen­ta­tives — as if they weren’t already getting paid to politic while many of their con­stituents are left at home without a job or income to feed their fam­ilies. This is dis­graceful. 

The bill also raises unem­ployment ben­efits to a level higher than what many would receive in wages. This could incen­tivize those who filed for unem­ployment to remain unem­ployed, as the check from Uncle Sam would be larger than the one signed by their employer

And it includes a subsidy for student loans — undoubtedly a small step toward student loan for­giveness, which Democrats have wanted for some time now. 

COVID-19 pre­sented the United States and the world with a problem that nobody really knows how to solve. Con­gress is no exception.

Alex Nester is a senior studying eco­nomics. She is the opinions editor for The Col­legian.