The Unintended Consequences Of The Kitchen Sink

Ryan BourneAs the $2.2 trillion CARES Act sailed through Congress, the general mood was that money had to get out the door as quickly as possible to provide relief for households and businesses.Details were of second ‐​order importance – lawmakers simply wanted dollars flowing to businesses through loans and payroll support, to households through checks, and to those laid off because of COVID-19 through more generous unemployment insurance benefits. One might say Congress threw everything but the kitchen s ink at the relief effort, in the hope that at least one program would cover everyone suffering.Well, it turns out there are unintended consequences of throwing dollars through programs with different aims simultaneously. One obvious example is how the more generous benefits for unemployment insurance and the small business ‐​focused Paycheck Protection Program come into conflict.The CARES Act ’s Pandemic Unemployment Assistance waived job‐​search requirements for unemployment insurance and hugely expanded eligibility for those affected by the pandemic. Most importantly, the federal government agreed to pay anybody eligible $600 per week on top of their state unemployment insurance benefits.As a result, many workers would now be better off out of work than in work, even more so given going to work brought greater risk of contracting the virus. Senator Lindsey Graham, andseveral commentators, pointed this out as a problem at the time. But his concern...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs