The economic policy response to COVID is to suppress the virus. Libertarian claims that mitigation measures were the only reason that the pandemic caused economic destruction are obviously wrong; from Sweden to Florida libertarian responses to the pandemic did not actually avoid economic calamity.
Among the vast majority of countries that failed to suppress the virus, though, the American economic response was probably the best:
Under President Biden, the government passed yet another bill, with one-time $1,400-per-person checks, another bonus unemployment measure, and hundreds of billions in relief money for state and local governments.
The result? The poverty rate in the US fell in early 2020. The government did so much to assist its citizens that many people were left financially better off than before the pandemic.
The comparison seemed even more favorable as I looked to Europe, which botched the virus on a public health level in a manner similar to the US, and offered less extraordinary support to its citizens. Most European countries have stronger safety nets to start with, but they largely didn’t use the pandemic as an occasion to strengthen them. The US did.
No country handled the economic shock of Covid-19 perfectly. Every country, the US included, made mistakes, sometimes grave mistakes. But a detailed comparison suggests that the US had the strongest economic response to the pandemic, in terms of providing income to its citizens during lockdown and ensuring a strong, rapid recovery as the economy began to reopen.
“The US will come out of this economically better than any country that was similarly affected by the virus,” Jason Furman, an economist at Harvard and former chair of Obama’s Council of Economic Advisers, says.
Matthews goes into a lot of detail, but both in terms of assistance to the unemployed and direct cash payments the American response was unusually generous. The comparisons are striking.
In retrospect, the unprecedentedly generous (by American standards) UI benefits in the CARES Act were a key turning point in American politics. It’s not just that Democrats were able to keep them in the bill despite substantial Republican opposition, but that one of the key drivers behind them was James Bennet, who had just finished being one of the interchangeable Moderate White Guys who ran for the Dem nomination for no particular reason. It was the death knell for the austerity mindset which had been a huge influence on the Democratic Party since Carter.