by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Like it or not, this is a time when borrowing money makes sense. We are facing a severe but temporary economic disaster, and we can smooth out the damage by having the federal government offset the losses of businesses, workers, and even lower levels of government (which don’t have the feds’ capacity to take on debt and usually can’t do so legally anyway). Especially with interest rates so low, it will be less painful to pay off the debt in future years than it would be to absorb the losses all at once.
But once the feeding trough is open, everyone lines up, and Congress has to choose who gets what. Here are three of the big questions that the Republican-led Senate faces as it considers adding another round of funding to the trillions of dollars we’ve already spent. Democrats in the House, you may have heard, have already picked their $3 trillions’ worth of winners.
1. How much money should the states get?
This is the big one. COVID-19 has torpedoed tax revenues and increased reliance on safety-net programs, wreaking havoc on state finances. “Rainy day” funds are running dry, and previous relief bills didn’t give much to states. It doesn’t help that so many states dug themselves into a hole long before the virus attacked by mismanaging their pension funds. …
… 2. What the heck do we do with the Postal Service?
Like the urban blue states, USPS faced a dire situation even before COVID-19 struck and then suffered a severe blow from the virus itself. It’s reporting a one-third decline in mail volume (though there are some questions about the exact revenue impact). …
… 3. What should the safety net look like while we reopen?
Follow Carolina Journal Online’s continuing coverage of the COVID-19 pandemic here.