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Old 03-25-2020, 07:33 PM
Anny Middon is offline
Join Date: Oct 2012
Posts: 1,325

Impact on deficit if no coronavirus relief bill?

Certainly the coronavirus relief bill will cost a lot of money which will increase the federal deficit. What would happen to the deficit if no bill is passed?

If people are left to manage as best they can with no income or greatly reduced income for some weeks, won't their federal income tax liability go down? Won't some qualify for Earned Income Credit, which will further reduce tax revenues and thus increase the deficit?

I'm thinking that how this is supposed to work is that people will have the money to pay their bills, and perhaps even buy some nonessentials (such as restaurant meals). This will increase the taxable income of other people and eventually the economy will go back (or nearly so) to what it is now and the federal deficit (or actually I guess the growth in it) will be what it was before COVID-19 knocked us for a loop.

I'm sure some people are bemoaning what the relief bill will do to the federal deficit, but I suspect they are ignoring what will likely happen to the deficit without the bill.

So I'm asking -- What is likely to happen to the deficit?

(Apologies in advance if this doesn't make a lot of sense. It's amazing what martinis do to my ability to communicare clearly.)


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