Congress passes a $900 billion stimulus bill that economists call important — and flawed.
Louisville, Ky., has an estimated $115 million budget shortfall for the next fiscal year.Luke Sharrett for The New York Times
The cost of an unfocused stimulus

For many Americans, the coronavirus recession has done almost no damage to their finances. They still have their jobs, and their expenses have gone down while they’ve been stuck mostly at home. Their homes have not lost value, unlike during the financial crisis of 2007-9. If they are fortunate enough to own stocks, their portfolio is probably worth more than a year ago.

Of course, millions of other Americans are struggling mightily. Nine million fewer people are employed than a year ago. Others are coping with big medical bills. Many small businesses have closed or may soon. State and local governments are planning deep cuts.

The $900 billion stimulus bill that Congress passed last night will provide a lot of help to the economy. But many economists believe that it also has major flaws. Among them: It isn’t especially targeted at the parts of the economy that need help.

A central part of the stimulus are one-time checks that the government will mail to people. Any household with income below $150,000 will likely receive at least $1,200. Families with children will receive more.

Much of that money will go to Americans who are doing just fine and who will save the money they receive, which in turn will do nothing to keep struggling businesses afloat or keep workers employed. Already, the personal savings rate had risen to about 14 percent this fall, from 8 percent at the start of the year.

At the same time, the bill provides only 11 weeks of expanded unemployment insurance. “That’s not enough to bridge us to when a vaccine is widely distributed,” Ernie Tedeschi, a former Treasury Department economist, wrote yesterday. In all, the bill spends less on the expanded jobless benefits than on the stimulus checks.
The New York Times