Looking Out: There is No Deficit Vaccine

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Last week, I got my second dose of the Pfizer vaccine. It got me thinking about where we were at this time last year and where things are heading now.

At this time last year, COVID-19 cases were sharply rising. Many states were imposing tough restrictions on businesses, social gatherings, travel, and schools. The economy was plunging into a sharp recession and the unemployment rate spiked to about 14 percent from 3.5 percent a month earlier.

Today, new cases have plateaued, albeit at a much higher level than a year ago. Many states are lifting restrictions, some schools have opened for in-person classes, vaccines are being injected at over 2 million per day, the economy seems to be growing again, with most forecasters predicting an economic boom by this summer, and the unemployment rate has dropped to 6.2 percent.

Make no mistake. The pandemic is still with us. It remains a threat to our health and an impediment to our economy. Perhaps there is a bit too much optimism about the near-term prospects, but there is no doubt that there are signs of hope. The end is in sight and we have a clear path for getting there; such as wearing masks, frequently washing our hands, and maintaining social distance — all buying time for the vaccines to take effect.

On the fiscal front, however, it’s a very different picture. A year ago, as the pandemic was first hitting us, the budget was on an unsustainable path. It still is. There is no end in sight and there is no clear path for solving the problem. We can’t wash our hands of it. Wearing a mask won’t protect us from it and, unfortunately, there is no deficit vaccine.

President Biden and Congress should keep all this in mind as they turn their attention from COVID relief to the regular budget and the post-pandemic economy.

For the past year, we’ve lived with a “deficits don’t matter” mindset. But as the pandemic winds down, that mindset must change, particularly as we hear of major new spending proposals of up to $3 trillion for infrastructure, climate change, health care and more.

If we want new or expanded programs, we should find a way to pay for them. In fact, with trillion dollar deficits projected for as far as the eye can see — long after the pandemic ends — we should find a way to pay for the programs we already have, or bite the bullet and find some meaningful spending cuts.

The time for deficit-financed emergency spending is at an end. “Going big” to fight the pandemic made sense. Now, it’s time to start making some hard choices about the future.

-Bob Bixby, Executive Director of the Concord Coalition

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