St. Clair Today

While President Donald Trump and Congressional leadership contend over the terms of another federal bailout that could range anywhere from $200 billion to $1 trillion, providing state and local governments with additional COVID-19 relief funds, critics argue that there shouldn't be another bailout at all.

According to an opinion piece published by Mackinac Center for Public Policy, Michael D. LaFaive, senior director of the Morey Fiscal Policy Initiative, and Joseph Coletti, director of Health and Fiscal Policy Studies at the John Locke Foundation, argue that the country can’t sustain the added debt.

The U.S. annual gross domestic product is currently $21.44 trillion, according to Investopedia. In comparison, Worldometer's U.S. debt clock had the national debt at over $27 trillion in mid-October.

LaFaive and Coletti pointed out that the federal debt hasn’t exceeded the size of the economy since World War II.

“That debt -- made larger by more bailout money -- will have to be serviced with interest, which will crowd out other necessary spending and likely require either higher, growth-killing taxes or cuts to core government services,” LaFaive and Coletti said, according to the Mackinac Center's website. “For the sake of the country, it is time to say no to more federal debt.”

One-third of states received enough from COVID-19 relief to cover 20% of their annual general fund budget, they said. And some states haven’t even appropriated what they received yet.

The existing COVID-19 relief programs have also already invited some questionable uses by local governments, they claim.

“The state and local assistance came with restrictions that it could be used only for new expenses directly related to the pandemic, but states and cities found they could call any variety of spending pandemic-related,” LaFaive and Coletti wrote on the Mackinac Center's website. “For example, Idaho cut property taxes for the year. Detroit used some of its federal dollars to hire a lobbyist.”