Oh, The Struggle To Survive On $120K A Year
Politicians typically have cracked ideas about the lives of regular people. If they were out of touch and not very much in touch with the federal pocketbook, this would matter less. But now we've got Joe Biden doing his best to help people who could use a little extra money to buy another boat and calling it help for those who are "hurting."

Peter Suderman writes at Reason about Biden's plan to help families making $120K a year with stimulus dollars, calling Biden's recovery plan a "poorly targeted effort that would make the economy worse off in the long run":

In pressing his case for a deficit-funded $1.9 trillion legislative response to the COVID-19 pandemic and its effects on the economy, President Joe Biden has consistently argued for bigness as a virtue. After a meeting with a group of Senate Democrats yesterday he tweeted: "One thing is clear: we all agree that now is the time for big, bold action to change the course of the pandemic and begin economic recovery." The real risk, he said, "isn't that we do too much--it's that we don't do enough."

..Biden isn't totally averse to compromise, he told House Democrats on a call. But, he said, "We have to take care of the people who are hurting."

Whatever it is you think of when you hear the words "people who are hurting," I suspect it does not include two-earner families with stable jobs making $120,000 a year. Yet that's who Biden's plan would help.

That is not just speculation or extrapolation based on an outline of his plan. That is the explicit position staked out for Biden by his press secretary, Jen Psaki.

...The juxtaposition between families who do not have enough food as a category of people that Biden wants his stimulus to help and a two-earner family with a solid six-figure income is more than a little jarring. It is certainly possible to be in a precarious financial position, to feel financially strapped and stretched, with six figures in earnings, and COVID-19 has exacerbated some challenges for families, particularly where schooling is concerned. But Psaki's hypothetical $120,000 family is not struggling to afford enough food.

Indeed, families with incomes like Psaki describes have, by some measures, done relatively well during the pandemic. Personal savings rates have hit record highs, and job losses have largely been concentrated in a few industries, and a few categories of workers, most of whom ordinarily make quite a bit less than Psaki's imaginary stimulus beneficiaries.

As the U.S. Chamber of Commerce recently pointed out in a letter to Biden, Census Bureau data show that "a majority of households with less than $50,000 in income have experienced a loss of employment income, a majority of household with more than $50,000 in income-including those between $50,000 and $150,000-have not experienced any loss in earned income."

The COVID-19 recession, in other words, has not hit everyone equally. As an analysis of Biden's relief package by the University of Pennsylvania team behind the Penn Wharton Budget Model (PWBM) notes, "Unemployment has been disproportionately concentrated among lower wage and young workers in specific sectors, e.g., retail and leisure and hospitality."

Meanwhile, Biden's plan to go big would come with long-term macroeconomic costs. The Congressional Budget Office often notes that, all else being equal, larger debt burdens drag down economic growth. The PWBM analysis published this week attempted to put a price tag on the long-term cost of Biden's $1.9 trillion plan: While it would increase gross domestic product (GDP) by 0.6 percent in 2021, the model projects that "the additional public debt resulting from the Biden plan would decrease GDP by 0.2 percent in 2022 and 0.3 percent in 2040."

...Biden has said he might be willing to negotiate the household income thresholds for the checks he plans to send out, though he is not willing to budge on the amount of those checks. But the fact that this is where he started shows the flaw in Democrats' insistence on going big for the sake of bigness.