Were the pandemic-era aid programs worth it?
Image: Anton Petrus | Getty
Nearly 50 people in Minnesota have been charged with laundering ~$250 million in pandemic relief aid – which was supposed to go towards providing meals to children from lower-income families – the DOJ announced this week. It marks the largest fraud scheme to take advantage of federal pandemic programs, the agency said.
🤔 A deeper dive… When it comes to government spending, fraud is expected – in the real world, nothing is 100%. But the driving idea behind these programs was that the risk of fraud, as well as other trade-offs or unintended consequences, were outweighed by the benefits. And that idea is what we’ll be exploring today.
📸 Big picture: Congress enacted five bills in 2020 that provided ~$4 trillion worth of Covid-related aid, including the $800 billion Paycheck Protection Program. The American Rescue Plan of 2021 added another $1.9 trillion, bringing the overall spending to $5.9 trillion.
- Of that total, $5.2 trillion was ultimately added to the federal deficit, per the nonpartisan Committee for a Responsible Federal Budget.
👍 Good news: Census Bureau data published last fall showed federal aid programs enacted early in the pandemic kept 11.7 million Americans from falling into poverty. The US unemployment rate – which peaked at 14.8% in April 2020 – fell below 4% by the end of 2021, roughly in line with pre-pandemic levels. Also, the Covid-induced economic recession in early 2020 stands as the shortest in US history (two months).
👎 Bad news: Criminals targeting Covid relief programs stole an estimated 10% of all PPP funds (~$80 billion), per NBC News. And that’s on top of the $90 billion–$400 billion thought to have been stolen from the Covid unemployment relief program (between 10% and 44% of its overall funds), and another $80 billion stolen from a separate Covid disaster relief program.
📊 Flash poll: Overall, do you think Congress’ pandemic-era spending was worth it?
See a 360° view of what the media is saying →
Sprinkles from the Left
- Some commentators on the left argue that pandemic-era aid programs provided a much-needed decline in child poverty across America.
- Others contend that pandemic-era aid programs supported small businesses during the height of the pandemic, helping to bolster the stagnant US economy.
- “ The stunning drop in child poverty is a huge story” –Paul Waldman and Greg Sargent, WaPo
- “Pretending the Pandemic Is Over Will Not Make It So” –NY Times Editorial Board
- “How Much Covid Relief Was Stolen? No One Really Knows” –Bloomberg Editorial Board
Sprinkles from the Right
- Some commentators on the right argue that pandemic-aid programs dug the US deeper into a pit of inflation detrimental to the economy, increasing financial hardship and taxation on Americans.
- Others contend that the pandemic-era aid programs have given the government unprecedented power over the people through dependency on stimulus checks.
- “Biden’s Outrageous Attack on PPP Loan Recipients” –Michael Faulkender, WSJ
- “After $100 billion in pandemic fraud, is government distrust justified” –Jay Evensen, Deseret News
- “Biden’s Spending Spree Has Supercharged Washington’s Power Over The American People” –Jason Smith, Daily Caller
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