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Here’s why the US can afford its high-priced pandemic rescue

AP Photo/Manuel Balce Ceneta
Fed Chair Jay Powell has his game face on.
  • Tim Fernholz
By Tim Fernholz

Senior reporter

Published Last updated on

The US Congress is doing what it does best: Throwing money at a problem.

In the last month, US lawmakers have approved some $2 trillion in relief. The money has gone to workers and businesses, to airlines and hospitals, to buy healthcare equipment and to launch a long-overdue national coronavirus testing program.

The cost of this effort dwarfs the combined cost of the rescue programs that followed the 2008 financial crisis. The 2008 bank bailouts and the 2009 stimulus act together cost about $1.5 trillion on paper, though final outlays were significantly less thanks to repayments from the financial sector. Yesterday, the Congressional Budget Office forecast the 2020 deficit to be $3.7 trillion; as a share of the US economy, it’s the highest since 1945, the peak of World War II.

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