This Bloomberg article about COVID-19 shows how traditional concerns and mannerisms over deficit spending are going to get more people sick than otherwise could be (boldface mine):
The White House said late Monday it had asked Congress for $2.5 billion to battle the disease. Half of that money is new, while the rest is being reallocated from other spending, including $535 million from funds to combat Ebola, an official familiar with the proposal said. The total includes $1 billion for development of a coronavirus vaccine, the official added.
Senate Democratic Leader Chuck Schumer on Monday night called the administration’s request “too little too late.”
“That President Trump is trying to steal funds dedicated to fight Ebola — which is still considered an epidemic in the Democratic Republic of the Congo — is indicative of his towering incompetence and further proof that he and his administration aren’t taking the coronavirus crisis as seriously as they need to be,” Schumer said in a statement.
Trump dismissed Schumer’s criticism. “If I gave more, they would say it should be less,” he said in New Delhi. “It’s automatic with these characters. They’re just not good for the country.”
The Trump administration is asking for $2.5 billion, half of which would be new spending, half pulled from existing public health efforts. Mind you, we’re talking about a non-negligible chance of an outbreak that kills thousands of U.S.-ians alone (many, many thousand), so why aren’t we just deficit spending the additional $1.25 billion? It’s not $125 billion, it’s $1.25 billion. There’s no macroeconomic effect ($1.25 billion of extra spending won’t cause inflation). and we’re faced w/the significant possibility of a very serious emergency. In fact, one could argue deficit spending would help limit an economic slowdown.
While the $1.25 billion would be a drop in the bucket regarding deficits and so forth, it would have a serious effect on existing programs. The last thing we want right now is to have a newly-neglected problem flare up while preparing for or dealing with COVID-19.
It’s just bonkers. Look, you don’t have to be a hardcore MMTer or Functional Financier–though it helps!–to realize that this is when you break the glass and spend the fucking money. This amount is essentially a rounding error. It doesn’t help that the Trump administration is using the threat of a pandemic as an excuse to cut funding for low-income home heating assistance (LIHEAP*). Never let a crisis go to waste I suppose?
*For those who want an accurate reckoning of U.S. political history before November 2014 (many don’t really), the Obama administration also tried to do this. The collapse of the Democratic Party didn’t start in 2016.