Forest Lakes, Minnesota, is spending $1.5 million on a new clubhouse for the city-owned golf course. Loma Verde, California, is building a $24 million recreation center with a pool. And San Antonio is spending $15 million on a theme park specifically designed for people with special needs.
What do all of these projects have to do with
COVID-19?
Well, nothing really. Except they are all being funded by
President Joe Biden’s
pandemic stimulus bill, which sent $350 billion to state and city governments with virtually no conditions on how it can be spent.
At least the citizens of Forest Lakes, Loma Verde, and San Antonio fared better than the citizens of West Haven, Connecticut, where two city employees were arrested by the FBI for allegedly funneling more than $636,000 in COVID-19 aid into a shell company they controlled.
The amounts being sent to cities are just staggering. The city of St. Louis has an annual budget of $1.1 billion and will get a one-time Biden-bonus of $498 million. Cleveland has an annual budget of $1.8 billion, and it is slated to get $511 million.
If you are wondering if all this extra cash going to states and cities is adding to inflation, you are not alone. President Barack Obama’s Council of Economic Advisers Chairman Jason Furman specifically pointed to Biden’s gifts to state and local governments as one of the causes of the record-high inflation the economy is suffering from.
“By March of 2021, it looked very likely that the vaccinations were going to be very effective in bringing COVID down and that the economy was repairing rapidly. So, that last round of checks, I thought at the time, was a mistake,” Furman told journalists last November.
“There were also other parts of the rescue plan that were oversized,” Furman continued. “For example, states and localities got a huge amount of money, even though they basically had no fiscal problem by the time the bill passed. It was clear by the time it passed that their tax revenue had recovered and that they’d got enough other aid that they covered their holes. Why does that matter for inflation? Well, you have states across the country cutting taxes now, so you have another round of upward pressure on demand and inflation happening because of that big fiscal relief.”
So the next time
inflation
hits your wallet at the gas pump or grocery store, remember to thank Biden and the Democrats in Congress who shoveled $1.9 trillion out the door for an economy that just needed an end to lockdowns, not more government spending.
But look on the bright side: Maybe your community got a new pool out of it.
