From the WSJ Editorial, 16 January 2021:
…“With interest rates at historic lows, we can not afford inaction,” President-elect Joe Biden declared Thursday night. He wasn’t kidding as he outlined a $1.9 trillion Covid spending plan, which comes on top of the $900 billion Congress appropriated last month, and the $2.9 trillion in the spring. And this is only Mr. Biden’s “first installment,” as Sen. Bernie Sanders put it.
…this blowout has nothing to do with economic stimulus. Nearly all of the money is for income redistribution—some to people in genuine need, but most to advance long-term Democratic social policies, and to massage con-stituencies like teachers unions and state politicians.
… Mr. Biden proposes $70 billion for vaccines, therapies and testing in addition to the $42 billion that Congress passed last month.
Most of the rest of the Biden plan is a repeat of the 2009 Obama plan—doubled. State and local governments will get $350 billion, though many have more revenue than before the pandemic thanks to buoyant equity and housing markets…
Mr. Biden also wants to raise [both unemployment benefits and] the minimum wage … It’s hard to imagine a more destructive policy for small businesses struggling to survive, especially in rural areas and mid-America states with lower wage levels than New York City. The strange economic logic seems to be to make it more expensive for businesses to rehire workers while giving those workers less incentive to return to work.
He also wants to expand the earned-income tax credit for childless adults, a …child tax credit …a larger ObamaCare premium tax credit and a $4,000 child-care tax credit. This is Democratic social policy traveling as temporary Covid relief. Don’t be surprised if the tax credits all become permanent features of the tax code—and a disincentive to earn more at the risk of losing the credits as they phase out.