Free Money: New Push to Make 'Stimulus' Programs Permanent

The coronavirus pandemic has brought a slew of government stimulus programs during the past year, from stimulus checks, to expanded unemployment benefits, to refundable child tax credits. Now, as the pandemic wanes and the economy continues to reopen and recover, many politicians aren't so eager to pull away the punch bowl of "freebies," even while employers struggle to find workers. In fact, Democrats are now proposing making expanded unemployment benefits and refundable child tax credits permanent.

It's not just Democrats, either. Sen. Mitt Romney (R-Utah) has released his own proposal for making the refundable child tax credit permanent. When most people hear or read tax credit, they think of a write-off at the end of the year, but that's not what this program is. "The principle of a child tax credit is to provide direct cash payments to parents of children...full stop, that's just what it is," says Benjamin Priday, Texas-based economist. "What happened with the (child tax credit in the) most recent coronavirus relief package was that it was a direct cash payment, independent of the tax system."

Politicians in both parties have fallen prey to the political popularity of free money policy. Aside from Sen. Romney, President Donald Trump championed $2,000 stimulus checks before leaving office, and the Trump administration regularly touted the expansion of child tax credits while in office. "There are conservative and liberal champions for this kind of policy on both sides, increasingly so," says Priday.

However, Priday also cautions that it's not fair to lump all of these so-called "free money" programs together. "A universal basic income is not going to be the same as a child tax credit, and that's going to be different than a stimulus payment," he tells KTRH. "These are all going to have different economic effects, they're all going to affect people differently, and affect their behavior differently."

"Not every cash payment or direct cash transfer from the government to the American people is the same...they're not all created equal."

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