By Dallin Overstreet

Congress will soon be passing a new Covid-19 stimulus package worth nearly $900 billion. This new package provides relief for individuals that are unemployed by extending federal unemployment insurance programs as well as providing an additional $300 per week benefit. It also includes loans for businesses, testing and vaccine funds, as well as funding for schools. The stimulus deal also includes $600 checks that will be paid to individuals who earn under a certain amount per year. As most know, the passage of this stimulus bill has been plagued by partisan bickering, with both Democrats and Republicans fighting to include provisions that the other side disagrees with. But will this stimulus package even do what legislators say it will?

Cost Breakdown

The various parts of this bill all will have their individual price tags. Below is a breakdown of the costs by provision:

  • Food Assistance: $13 billion
  • Rental Assistance and extension of eviction moratorium: $25 billion
  • Testing and Vaccine distribution funds: $69 billion
  • Funding for Colleges and Schools: $82 billion
  • Stimulus Checks (Assuming every US citizen receives one): ~ $200 billion
  • Additional Unemployment Insurance Compensation: ~ $230 billion
  • Loans for businesses struggling to pay rent and workers: $284 billion

I’ve included estimates of the total cost of stimulus checks and Unemployment Compensation in this breakdown. Their individual costs may be slightly higher or lower than what is shown here.


Will this new stimulus package really accomplish what lawmakers think it will? Most likely not. Economists agree that the downturn we are experiencing is due to a decrease in demand as well as a consequence of the many lockdowns instituted by states and cities due to the spread of the Coronavirus. People are still scared to go out to stores and restaurants, worried that they might contract the virus. Until the pandemic is brought under control, either by limiting its spread or minimizing its negative effects through treatments and the vaccine, demand probably won’t recover quickly. And as long as governments continue to impose lockdowns, many shops and restaurants won’t have a chance to sell their goods and services.

The $600 payments most likely will not provide much stimulus to the economy and it will do very little to help the average American. Considering the fact that the average monthly rent in United States is around $1,300 – $1,400, the average US family of about 2.5 individuals would only receive enough to pay about a month’s worth of rent. Congress isn’t doing much of a favor to anyone by returning $600 worth of their prior earned income they paid to the government in taxes.

The additional funding to extend and increase Unemployment Insurance compensation may help to offset some of the lost earnings in the economy. But it is important to remember that unemployment spiked in the U.S. due to the Coronavirus and government lockdowns that have prevented many businesses from operating. Only “essential” businesses, a very subjective regulation, have been allowed to operate at times across the states, depriving many business owners and employees their livelihood. Government intervention has largely been responsible for the economic downturn as these lockdowns have occurred. The national debt has increased so dramatically since the start of the pandemic because of bad management by the government and overreaching regulatory interventions in the economy. Had governments merely instituted mask mandates to limit the spread of Covid-19, many businesses most likely would not be in the position they are in, unable to pay employees and keep them employed. With these additional Unemployment Insurance provisions, Congress is merely addressing the symptoms of the disease plaguing the economy.

The same argument can be made against the funds available in loans for businesses affected by shutdowns and the economic downturn. Government’s intervention in the economy is causing huge distortions in markets, causing businesses to fail and increasing unemployment. By implementing less intrusive regulations, such as a mask mandate, the U.S. economy may have been spared from much of the economic downturn that has occurred.

The funding provided for additional testing and vaccination distribution obviously could help the economy return to normal faster, helping to manage the spread of the virus. But again, the other smaller cost provisions in the bill are addressing the symptoms, not the actual issue causing so much economic distress in America.


Congress should really consider what they intend to accomplish with such a massive stimulus package. The government spending $900 billion to address many issues government caused in the first place seems rather redundant and makes you consider the additional effects that this stimulus package will have in the long-run. With Senator Schumer saying that this is “A good start”, this may not be the last badly designed stimulus package we will see.

Featured Image Credit: By Becker1999 from Grove City, OH – IMG_0144, CC BY 2.0,

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