Is Trump’s ‘Back to Work Bonus’ a Good Idea?
“This idea doesn’t make much sense,” R Street Institute Director of Fiscal and Budget Policy Jonathan Bydlak told me. “It’s important to remember that people were out of work in response to the virus, not because there was anything inherently wrong with the U.S. labor market. Sectors of the economy were forced to shut down in response, but prior to the virus, the fundamentals of the U.S. economy were actually very strong.”
“For this reason, there’s no real need to provide incentive for people to go back to work, and providing a bonus is unlikely to decrease unemployment or rebound the economy,” Bydlak said. “When businesses are able to safely reopen, jobs are likely to be plentiful. To the extent that they want to be involved, policymakers generally should focus on providing relief to get Americans through this exogenous shock, not try to stimulate at a time when the economy has been deliberately shut down.”
“Given our record deficit for this year, we need to be very careful that we do not undertake responses to the virus that undermine our ability to rebound once the virus is controlled,” Bydlak concluded. “Running deficits unnecessarily would only jeopardize the recovery and replace the coronavirus crisis with a fiscal one.”