In America’s Virus Economy, Government Is the Last Spender Left
- Congress is writing big checks and is pressed to go further
- ‘We can’t afford it’ vanishes from a debate it once dominated
The scariest words in the English language, President Ronald Reagan once said, are: “I’m from the government and I’m here to help.”
The opposite fear is stalking America right now. The coronavirus has turned almost every corner of the economy into a bailout candidate, and forced policy makers to spray cash around on an unprecedented scale -- and the chief worry is that it won’t be enough.
Congress is set to pass an emergency package worth about 10% of America’s economic output. That’s likely the biggest ever in peacetime -- and will push the budget deficit toward levels reached in World War II, above 20% of GDP. Meanwhile, the Federal Reserve has rolled out a credit lifeline worth trillions, exceeding even the measures it took during the 2008 financial crisis.
There’s strikingly little pushback against all this intervention -- in an economy where the free-market mantra has reigned supreme, especially since the Reagan days. Democrats and Republicans have haggled over details of where virus relief should go, but there’s no dispute on the principle that huge amounts of money are needed.
In fact, many analysts -- including on fiscally conservative Wall Street -- say authorities will have to go further.