Mitt Romney Explains Biden’s Stimulus Bill Is a $1.9 Trillion Clunker

Mish

President Biden is using Covid as an excuse to foster more liberal spending waste. Let's investigate Biden's proposal vs what should be done.

Mitt Romney wrote an accurate Op-Ed for the WSJ explaining why Biden’s Stimulus Bill Is a $1.9 Trillion Clunker. 

Key Clunker Points

  • The Congressional Budget Office’s recent analysis of the plan found that more than a third of the proposed funding—$700 billion—wouldn’t be spent until 2022
  • Sending out checks won’t get consumers back into restaurants, bars, salons, malls, hotels or airplanes.
  • The bill is filled with bad policies and sloppy math. It calls for $350 billion for states and localities. Florida hasn’t even had to dip into its rainy-day fund. California has a multibillion-dollar surplus. Utah’s revenues rose by double digits. JP Morgan found that 21 states had revenue increases in 2020. Other states drew on rainy-day funds—which is what they are there for.
  • Most local tax revenue comes from property taxes, which are far less volatile than sales or income taxes. Sending out hundreds of billions of dollars to states and localities regardless of need is both wasteful and harmful. It would create incentives for the mismanagement that got some states into fiscal trouble in the first place.
  • The Biden stimulus calls for $170 billion for education yet has no realistic plan to reopen K-12 schools. Further, of the $80 billion Congress has already authorized for education, $68 billion hasn’t yet been used by schools and universities. 
  • Stunningly, the CBO says only 4% of the K-12 spending in the Biden bill would occur in 2021 and that some education and labor funds would remain unspent in 2029, after a potential Biden second term.

What Romney Does Support

  • Expanded Covid testing
  • Accelerate vaccine delivery and support health providers. 
  • Robust assistance for those who have been crushed financially by the pandemic, including by losing their jobs. 
  • Aid to students and parents to spend on tuition at schools that are open or on tutors, summer programs or home-school efforts. 

Romney noted that a group of Republican Senators proposed a $618 billion compromise measure that matched President Biden’s proposed health and vaccine funding, extended enhanced federal unemployment benefits, provided economic relief for those with the greatest need, and included nutrition funding, small-business assistance, and resources to get children safely back to school.

"We can’t let unreasonable demands by teachers unions keep schools closed that can safely reopen," said Romney.

Bingo on all accounts.

Kill the Bill

President Biden is using Covid as an excuse to shotgun spending and waste money. 

His real goal is to funnel money to liberal states that have serious policy errors that ought to be rectified. 

I suggest we kill this latest "Cash for Clunkers" fiasco.

For the Record

Mish

Comments (71)
No. 1-17
4IronFan
4IronFan

NY, Washington & Illinois, first COVID hit states experienced extreme loss of revenue via sales, property, unemployment and other increased welfare requirements. They should receive significant federal funds. I agree those states that did not experience shortfalls shouldn’t receive funding but that’s not how the Senate previously chose to allocate state funding.

Quanta
Quanta

At least the money will go to the people regardless of the waste. All the GOP tax cuts were spent on CEO salaries and stock buybacks. And don't even get me started on the Iraq War.

Sechel
Sechel

Sounds like Romney wants a covid relief bill to focus on Covid. Novel idea.
Personally I think some of the Democratic agenda doesn't make a whole lot of sense unless you look at their bigger picture which is delivering for the progressive wing of the party on some items. Aid to state and local economies can be justified on the employment side. It seems Ok to provide funds for airlines and farmers but not the governments. All those shut airlines and restaurants aren't paying taxes. State an local government's don't have the luxury of printing money and running deficits like the Federal government. But items like the increase in minimum wage just don't belong

Quanta
Quanta

The numbers for schools are laughable. $80Billion. How much money do YOU PEOPLE think it takes to run American schools? How about 5 Trillion dollars for schools and nothing else?
Old timers got their education for free , and now complain that millennials can't make ends meet because of financializations of the education industry.
YES - the states governments should run the schools, not private interests.

11 Replies

dbannist
dbannist

You are aware of course that private schools are run far cheaper, produce better results than anything the state governments produce?

Id' argue that the data very much suggests that private interests run schools quite well actually.

Quanta
Quanta

No I'm aware of the opposite - that private schools are much much much worse at educating children than public schools, if you including those children that the school cannot educate because they cannot pay.

Private school data is egregiously biased, because it excludes all those who cannot afford to pay. Duh.

This is the same argument that capitalism makes - capitalism is great for those to whom its profits are distributed. Everyone excluded from the capitalist market can go and die - that's capitalism.

Eddie_T
Eddie_T

I find myself agreeing with your take (Quanta) on the stimulus, for the most part. One thing that I would mention is that a state like mine has next to nothing in common with states like Illinois and Pennsylvania and other states in the Northeast with regards to public school finance.

Public union benefits are not sustainable.I think the criticism on aid to states is justified....with regards to propping up public union states that have already allowed union bennies to put them into bankruptcy.

On the other hand, in Texas, my daughter, who is a teacher, had to pay to equip her own classroom with COVID safety items. It is common here for teachers, who are NOT paid well, to pay for things for their students...like supplies. It’s ridiculous. You have to be a saint to teach here.

Even the first COVID relief money...the PPP part and the EIDL part went in large part to big business and insiders....80% is what I read and I believe it. We waited months, while the fat cats waited a few days to get bailed out. Universities too, got big bucks.

I’m happier to see working stiffs get some money. That is where the need is...but by the time it gets handed out, most of the ones who needed worse......it will be too late for them....or they will have muddled through somehow like working people do....doing without, basically.

Funny I used to criticize Romney because he was a hedge fund manager and LBO specialist who drove American businesses into the ground for fun and profit (KayBee Toys was one such). Now, after having a Trump, he looks like a Boy Scout..

Quanta
Quanta

The fact that teachers get paid poorly is a direct consequence of unbridled capitalism and capitalism short term horizon outlook. Capitalism wants to invest for it's own private benefit ONLY, and only for the short term, e.g. 5-10 years. Educating a person so they become semi-useful in tech industry is 21 years of age minimum, 25+ more typical (because of a failing education system). Who invests during that entire duration of 21 years? No, not the capitalists. The parents and teachers do.
What do capitalists get out of it? Educated workers who generate profit for the capitalist. Is there a direct incentive for the capitalist to invest in my childrens education? no there isn't - the 25 year payout is too long, and they might even go work for a competitor.

Eddie_T
Eddie_T

In general schools in this part of the country have had a great deal of local autonomy....or did until the courts decided that rich districts had to share their property taxes with poorer districts....we have this thing nick-named Robin Hood......where rich districts are forced to partner with some less rich district and give them a part of the revenue.

Back when we spent our local taxes for local schools we had a few real flagship public schools, like the one my kids attended here in affluent west Austin. If a locality wanted great schools they paid higher taxes...people decided where to live in order to get their kids into good schools. I did that, in 1987, when I moved here.

Now that has changed...of course the schools here are still better than many in economically depressed areas and in inner city ghettos...but they are not what they used to be.

I’m not sure you can blame poor teacher pay on capitalism.....maybe it’s part of it, because the state legislature sets the pay....and in Texas, the oil men pay for the politicians they want. It's that simple. Voters mostly vote for anybody who promises not to raise taxes. Which is every Republican.

This is even at the heart of a debacle like last week’s power failures. Interestingly, this week the ERCOT directors fell on their swords and resigned...Governor Abbott isn’t going to do that....no way.

Quanta
Quanta

"I’m not sure you can blame poor teacher pay on capitalism.....maybe it’s part of it, because the state legislature sets the pay....and in Texas, the oil men pay for the politicians they want" - they don't have this problem in France or Sweden. So yes, I blame it on capitalism.

Eddie_T
Eddie_T

Last I checked, capitalism is still ongoing in both Sweden and France. Is that not correct?

I think you get part of what is going on here, but you’re missing part of it too.

Quanta
Quanta

I'm not saying capitalism is bad, I'm just saying that capitalism is not a governance system, and pure capitalism always leads to oligarchy.

The difference between French / Swedish capitalism and American is that here in America many have been brainwashed / sold on the idea that capitalism is the one and only answer, and all that needs to happen is for the government to get out of the way of capitalism. In other words, that a bunch of private interests, accountable-to-nobody have the best interests of society at heart. That is simply false and backwards. It's the government that represents society through elections. Capitalism does not work well for electoral system, education, heathcare access to everyone, long term science investment etc.
The elite capitalist class here in the States has succeeded in permeating the falsohood that capitalism is the only answer, and anything that tries to curb capitalism negative effects is "socialism", "Communism" etc.
There needs to be a healthy balance between capitalism which is generally effective at allowing resources in the short terms, and the government which represents the people, and has more a more stable revenue base (through taxes) to sustain social services and long term investment.

Varth
Varth

I question the statement "You are aware of course that private schools are run far cheaper, produce better results than anything the state governments produce?" Its not an apples to apples comparison. Generally -- private schools have the right to exclude that public schools do not. Public schools must take all kids and provide them appropriate services. Teaching special needs children costs a lot of dollars. Most private schools would not take them.

Quanta
Quanta

Fully agree with you. It's was user "dbannist" who stated what was in the quotes, and I disagree with it.

Quanta
Quanta

Private schools are even more exclusive (rather than inclusive) than kids with special needs. If you don't pay, you don't attend. Private schools would solidify the oligarchy.

Quanta
Quanta

"The package includes $1,400 direct payments to most Americans, a $400 per week jobless benefit supplement and an extension of programs making millions more Americans eligible for unemployment insurance. It also puts $20 billion into Covid-19 vaccinations, $50 billion into testing, and $350 billion into state, local and tribal government relief.

The plan as of now would hike the federal minimum wage to $15 an hour by 2025. "

Makes sense to me. I don't have a problem with anything here.

KidHorn
KidHorn

There's no chance the republican proposal passes. The whole point of the covid relief bill is the added pork. The covid part is just a cover for what they really want.

amigator
amigator

And it will pass nothing the Repubs can do. This is JB using his bringing together with bipartisanship BS. I love this country!

Quanta
Quanta

Trump and the GOP could have used their power to help regular Americans in 2020, and had they done so, they would have won the election. Instead they spent most of 2020 denying science, and didn't do much of anything.
Now Joe & Dems are going to get this major relief through, and get all the credit for it. Good job and way to go JB & Dems.
GOP losers had their chance in 2020, and didn't take advantage of it. How dumb do you have to be, to NOT use a crisis to your political advantage when you're in power?

Doug78
Doug78

Romney is an amalgam of all that is bad in the Republican Party. Anything he says is not worth reading.

numike
numike

when do I get my check??

Sechel
Sechel

When it's what the other guy wants its waste. When its what you want its investment

PecuniaNonOlet
PecuniaNonOlet

Another big box retailer bites the dust. Stimulus or no, retail, like boomers, are becoming extinct over the next decade. Long live Amazon!

Rbm
Rbm

Its all a game. Republicans cut taxes and then complain we cant afford this or that. Dems add programs. Both put us in debt. Everyone complains when someone else is getting a govment hand out. I just want tax money spent wisely but thats never gonna happen.

Casual_Observer
Casual_Observer

Oh those poor Republicans (insurrectionists). They can go GFT.

oee
oee

it is simply replacing lost demand due to the lockdowns due to Corona Virus. if you did not notice, the economy contracted 2.50% is 2020, and the economy has 10 million fewer jobs than at the beginning of the pandemic. the economy does not self-heal. there has been never a situation in which an economy healed by itself.

JoeJohnson
JoeJohnson

I do not take anything seriously said by Romney, the liberal wing of the GOP

purple squish
purple squish

I've never liked Romney, the quintessential corporatist warmonger oligarch. However, his take on this is completely reasonable. Far better than the other crap that has more than a snowball's chance in hell of passing, anyway. Kudos to Mish and some of the commentariat here who can see past both the R or D and the person's name and just evaluate what's being said.


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