The CARES Act (Coronavirus Aid, Relief, and Economic Securities Act) passed in late march was the largest stimulus package passed in modern US history. This complex bill’s allocations can be simplified in the following chart:
While this is certainly a good start, there are many shortcomings to this plan. One of which is the unnecessary excess funding given to big businesses (through backing up a new federal reserve program) that are much more capable of fending for themselves during this time than are small businesses. The strategy here is that the functionality of our economy relies on big businesses, but the reality is that small businesses are at a much higher risk of going bankrupt during this recession, and they too serve an important role in keeping the economy running smoothly. Additionally, the downfall of small businesses is much more likely to hit individuals hard because they are often owned by individual families, who rely on this income to survive. The CARES act also includes tax breaks that could save wealthy real estate investors $170 billion over ten years. Overall, there was not nearly enough allocated to the healthcare sector in order to fight the origin of the recession: the virus. Another major criticism of the CARES act is that the benefits accrued to states and local governments are not nearly enough to effectively tackle the crisis.
A more recent $480 billion stimulus package was passed by the senate, and its aims are geared more towards granting relief to the small business loan fund, as well as directing more funding to hospitals and corona virus testing. Specifically, this bill includes 75 billion in relief for hospitals and 25 billion directed to coronavirus testing. This is a major improvement from the initial CARES act, where only 9% of the 2 trillion dollar bill went to healthcare, but this is still only 20% of the current stimulus plan. Additionally, millions of dollars are continuing to go to large corporations because the loophole of the original bill was not further addressed. State and local governments are also continuing to suffer because their financial needs have been omitted from this subsequent stimulus.
I think the way in which these financial stimulus packages have been allocated are very telling of how our president views this pandemic; he selfishly believes it is most important to keep the economy running rather than directly tackle the issue at hand. Of course, the freezing of the economy calls for financial help that must be directed towards families suffering the most, but there needs to be much more of a focus on tackling the virus itself. If we do not start to focus more of the financial aid towards manufacturing ventilators, paying for the healthcare of COVID patients, adopting a coordinated medical effort against the virus, making testing accessible, and vaccine research (to name a few), we will never dig ourselves out of this deep recession.