Democrats Have Forgotten the First Lesson of Pandemic Economics

Democrats used to understand pandemic economics. Donald Trump would complain that “the cure is worse than the disease,” or that Americans must be free to get back to work to improve the grim economic picture. Democrats would reply that the economic crisis was inseparable from the public health crisis. The idea was simple: The government could indeed mitigate some of the ongoing damage to household incomes. But a full economic revival required first containing the virus.

What was true in 2020 is true now. Yet Democrats have seemingly forgotten this insight, just as an unrelenting focus on speeding up vaccinations could end the pandemic more quickly. Instead, with control of Congress and the White House, the party is exhausting time and energy on a $1.9 trillion “stimulus” package that contains a raft of superfluous demands and offers up far more spending on economic relief than necessary.

Speaking at the White House on Friday, President Joe Biden presented the package as doing two things: providing additional funding for America’s direct pandemic response and offering American households support to bridge their finances until the pandemic ends. That sounds consistent with Biden’s 2020 “the economic crisis is a public health crisis” rhetoric. Unfortunately, it is at odds with the proposal’s substance. 

Democrats have sought to include a gradual federal minimum wage hike to $15-per-hour by 2025, for example. This long-standing party ambition has nothing to do with ending the pandemic. In fact, with restaurants, entertainment, and hospitality being battered by depressed demand, lockdowns, and safety protocols that hamper efficiency, now is possibly the worst possible time to raise mandated wage floors. (Biden, for his part, has acknowledged the minimum wage increase could not be included in any package that passes the Senate via reconciliation.)