Michael R. Strain, Columnist

How Stimulus Could Backfire Against Low-Wage Workers

Don't trust assurances that the Fed won't panic over bursts of inflation and cut short the recovery before it starts to help the households who need it most.

March 10, 2021 at 2:30 PM UTC

By Michael R. Strain

Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and Arthur F. Burns Scholar in Political Economy at the American Enterprise Institute. He is the author of “The American Dream Is Not Dead: (But Populism Could Kill It).”

Beware of the backlash.
Photographer: Samuel Corum/Bloomberg

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

President Joe Biden’s $1.9 trillion economic relief plan is on the verge of becoming law. With so much uncertainty about the likely course of output, employment and prices, its effect on the economy is unusually hard to predict. But it’s a fact that Congress is providing much more stimulus than any reasonable dollar estimate of the economy’s underlying need.

That’s provoked a debate among policymakers and economists about the risk of sustained, runaway inflation, with warnings of the dangers posed by widening deficits countered by assurances that the government possesses the tools to keep prices and wages under control.