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The cost of an untargeted stimulus

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For many Americans, the coronavirus recession has hardly hurt their finances. They still have their jobs and their expenses have gone down when they mostly stayed at home. Their homes have not lost value, unlike the financial crisis of 2007-2009. If they are lucky enough to own stocks, their portfolio is probably worth more than a year ago.

Of course, millions of other Americans are in trouble. Nine million fewer people are employed than a year ago. Others face big medical bills. Many small businesses have closed or may soon. State and local governments are planning deep cuts.

The $ 900 billion stimulus bill that Congress passed last night will provide significant help to the economy. But many economists believe that it also has major flaws. Among them: It is not specifically targeted to those parts of the economy that need help.

A central part of the stimulus is the one-off checks that the government will send to people. Any household with an income of less than $ 150,000 will likely receive at least $ 1,200. Families with children will receive more.

Much of that money will go to Americans who are doing very well and saving the money they get, which in turn will do nothing to keep struggling businesses afloat or keep workers employed. Already, the personal savings rate had risen to around 14% this fall, from 8% at the start of the year.

At the same time, the bill only provides for 11 weeks of extended unemployment insurance. “This is not enough to bring us closer to the moment when a vaccine is widely distributed”, Ernie Tedeschi, a former Treasury Department economist wrote yesterday. In all, the invoice spend less on extended unemployment benefits than on stimulus checks.

An even bigger problem is the lack of support for state and local governments. Mitch McConnell, the Senate majority leader, insisted on ruling out such aid, saying it would be a bailout for financially irresponsible states. Many economists disagree and point to the pandemic’s toll on state budgets.

“Economists are particularly concerned that the final deal cut new funding for states and local governments, which is likely to lead to more job cuts and higher taxes in parts of the country “Wrote Heather Long of the Washington Post. Larry Johnson, a county commissioner in the Atlanta area, said, “The Congress that leaves out local aid is like the Grinch who stole Christmas.”

And Tracy Gordon of the Urban-Brookings Tax Policy Center told Bloomberg CityLab: “I am in disbelief that they do not provide public and local assistance.” Among the areas likely to suffer the cuts the state and local government will have to make: public transport, police and firefighters, schools and health care programs.

The bottom line: The stimulus package looks big enough to keep the economy from sliding into another recession early next year. But a different plan could have avoided more economic hardship than this one.

Learn more about the bill:

  • It includes a ban on surprise medical bills from doctors that people didn’t know were outside of their insurance networks. “The legislation overcame strong opposition from doctors and hospitals, who feared new rules would reduce their profits,” says Sarah Kliff of The Times.

  • David roberts, author of the Volts newsletter, said reporters downplayed Democrats’ support for a larger bill that would have helped the economy more while Republicans insisted on a smaller one.

  • The Kilauea volcano on the Big Island of Hawaii, one of the most active in the world, erupted on Sunday. Authorities have warned residents to take shelter from the blown ash.

  • Russian hackers who broke into U.S. government agencies broke into the messaging system used by top Treasury Department officials. This is the first detail of the depth of hacking in the networks of the Trump administration.

  • The Justice Department indicted a former Libyan intelligence agent in the 1988 Pan Am flight explosion over Lockerbie, Scotland – an attack that killed 270 people.

  • The US Military Academy at West Point is facing its biggest academic scandal in almost 50 years over allegations that more than 70 cadets cheated on a calculus exam.

  • Workers removed a statue of Confederate General Robert E. Lee from the Capitol. A statue of civil rights leader Barbara Johns will take its place.

The future of shopping: When Eden Chen wants new sneakers, he pulls out his smartphone and points it to his feet. He is one of the growing number of consumers who buy in augmented reality.

“Finding love with Martin was a great joy”: These were among the words that the old one Bloomberg Journalist Christie Smythe wrote to a judge about Martin Shkreli, the vilified former pharmaceutical executive whose case she had covered. Smythe revealed she was in a relationship with Shkreli, who is in prison, in an article by Elle.

From the review: Many Liberals do not speak honestly about the small risks they take to protect their mental health, says Michelle Goldberg.

Lives lived: The post of head of the White House was open. Henry Haller, a versatile chef of Swiss origin, got the role and would go on to become the country’s longest-serving executive chef. It has hosted five presidents of varying political, temperament and palate. He died at the age of 97.

Support from subscribers makes Times journalism possible. If you haven’t already subscribed, consider becoming one today.

The pandemic has caused a sharp drop in sales for much of the fashion industry. Yet the company owned by Telfar Clemens, a Liberian-American designer, is having its best year. He did so largely by abandoning the old fashion system, as Times fashion critic Vanessa Friedman writes in a profile of him.

Clemens launched its unisex line in 2005, years before the genderless bandage concept took off. The brand’s slogan – “Not for you, for everyone” – and relatively affordable prices have taken a more inclusive approach to fashion.

The company has eschewed other industry traditions as well, selling the majority of its products direct to consumers through its website, rather than relying on wholesale orders. These decisions have enabled the company to better endure the pandemic. “When Covid came, rather than knocking us out like everyone else, we just rode this wave,” Clemens told The Times.

The brand has also achieved high level improvements this year. Oprah Winfrey chose her signature shopping bag, also known as Bushwick Birkin, as one of her ‘favorite things’. Alexandria Ocasio-Cortez praised the bag on Instagram.

Everything Clemens has always stood for, writes Friedman, is everything the fashion world “desperately wants to embrace.”

If you’re looking for something sweet, try these peanut butter blossoms.

The first “Wonder Woman” movie, directed by Patty Jenkins, proved that female superheroes can anchor a successful franchise. Prior to the release of “Wonder Woman 1984” on December 25, The Times interviewed Jenkins about the making of the sequel.

From “Wind of Change” to “My Year in Mensa,” this list contains the best podcasts of the year.

With the help of Celine Dion’s music, comfort food like a salty tourtière, and a virtual tour of a local gallery, you can pretend to be in Quebec City.

We look back on the past year on late night television.

Yesterday’s Spelling Bee pangram was captivity. Today’s puzzle is above – or you can play it online if you have a Games membership.

Here are today’s mini crosswords and a hint: default on a phone screen (five letters).

Thanks for spending part of your morning with The Times. See you tomorrow. – David

PS “Time” – a film about a mother struggling to keep her family together while fighting for the release of her incarcerated husband – was named best non-fiction film by the New York Film Critics Circle and also made Barack Obama’s list of his favorite 2020 movies.

You can see the first printed page of the day here.

Today’s episode of “The Daily” examines the lives of four complex and dynamic people we have lost this year. On the last episode of “Sway,” a conversation with Nicholas Kristof of The Times.

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