Why Joe Biden’s proposed stimulus is too big

AMERICA’S ECONOMYIMFGDP will recover faster from the pandemic than its rich-world peers, the predicts. Not because it has controlled the spread of disease—it hasn’t—but mostly because of its enormous economic stimulus, which boosted household incomes by more than 6% in 2020 even as the unemployment rate peaked near 15%. Before Joe Biden became president, Congress had already spent $4trn fighting the crisis. Now he proposes $1.9trn more emergency spending, which would take the total to over 25% of in 2019. Republicans think that is too much. A group of the party’s senators has made a counter-offer of a plan worth about $600bn (see ).The right size for the bill is not best judged from the top down. America is not in a normal recession that is best solved by a calibrated slug of government spending. No amount of pump-priming will fully reopen restaurants, nightclubs and offices while the virus remains prevalent—nor would that be desirable. The government must instead fight the crisis from the bottom up.