One Enormous Mistake Congress Must Not Repeat If There’s a COVID-19 ‘Second Wave’

In the United States and around the world, concern is mounting over a potential COVID-19 “second wave” as economies reopen and nominal coronavirus case numbers rise. While we don’t yet know how the virus will play out and whether this concern is warranted, one thing is certain—no matter what happens, American taxpayers shouldn’t support a “second wave” of big government bailouts.

Congress failed the first time.

Here’s what happened. After the pandemic began and government-mandated lockdowns stopped the previously strong economy in its tracks, Republicans and Democrats alike came together to pass the $2.2 trillion CARES Act. The bill was a sweeping, behemoth legislative package meant to provide relief to adversely affected Americans, stimulate the economy, and keep businesses afloat.

The cost of this intervention is unprecedented, and the federal government will run an astounding $4 trillion deficit this year, in large part thanks to the CARES Act. Between the stimulus checks sent out to many Americans, government support for businesses, and expanded unemployment benefits, we were promised serious results for a serious price tag. In reality, the CARES Act has failed miserably on all three counts.

The bill expanded eligibility for government unemployment benefits to self-employed business owners, independent contractors such as Uber drivers, and other groups. More significantly, it also augmented the state-level unemployment benefits with an additional $600 a week, creating a large cushion many out-of-work Americans could fall on.

This expansion was a bad idea to begin with, but it even failed on its own terms. It pushed state unemployment bureaucracies to the breaking point, and quickly, they started collapsing. Here’s how it played out:

The Economic Policy Institute found that for every 10 people able to successfully file for unemployment, three to four couldn’t get through the system to make a claim, and one to two chose not to because it was too difficult. In total, the study concludes that 9 million to 14 million eligible people were thwarted from accessing benefits by these systemic failures.

This government incompetence stands in stark contrast to the ability of private charities and individuals to quickly get

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