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It’s fine dead people got $1.4 billion in coronavirus stimulus checks

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  • According to a new report from a federal watchdog, the government sent out $1.4 billion in coronavirus stimulus checks to dead people.
  • People are very mad about this “waste.”
  • These people are very wrong. In fact, it’s more worrying that the amount of overpayment was too low.
  • People are dying, people are unemployed. We should be more worried that the government isn’t doing enough, not that the government accidentally overpaid slightly in a rush to save the economy.
  • This is an opinion column. The thoughts expressed are those of the author.
  • Visit Business Insider’s homepage for more stories.

A report from an independent congressional watchdog released on Thursday led with a very disturbing statistic: $1.4 billion worth of coronavirus stimulus checks authorized by Congress’ relief bill — the CARES Act — and sent out by the federal government went to more than 1 million dead Americans.

News reports flowed after the release of the report and online commentators were aghast. How could the Treasury Department blow so much of the taxpayers’ money on dead people? What a flagrant example of bureaucratic failure and government waste.

But I am here to tell you that not only is that $1.4 billion in payments actually not a problem, it’s actually pretty good. Heck if there’s a problem here, it’s because that amount of overpayment was too low.

“But Bob!” you may be exclaiming. “Look at all the waste, the government shall surely go bankrupt blowing money like this. How sloppy! How corrupt!”

First off, calm down, no need for all the exclamation points. Second, let me explain why this is not a big deal:

  1. It’s better for us to accidentally overspend in this instance than underspend. It was necessary to rush out the $1,200 checks to households because the economic crisis caused by the coronavirus pandemic was acute and sudden. Most people got their checks within a few weeks of the CARES Act passing, which is much faster than stimulus checks in past crises. Trying to administer the stimulus perfectly — especially given the hurdles already facing the Treasury — would have slowed down the process even more. When a pandemic stops the global economy in its tracks, time is of the essence, even if it comes with a little bit of overflow.
  2. It’s actually a pretty small amount of overspending. In total, the US government sent out around $269 billion worth of stimulus checks to American households. $1.4 billion sent to dead people makes up right around 0.5% of that. By comparison, that’s like accidentally paying a waiter $20.10 instead of a round $20. For such a massive government program put together in just a few weeks — one that helped cushion the economic hardships for millions of Americans — that doesn’t seem like a huge price to pay, does it?
  3. The government is not your household budget. So this is the biggest point. I know I made a whole waiter analogy above, but that’s also a terrible analogy and I disavow it. That’s because the federal government doesn’t operate anything like your finances, a business’ finances, or even a state government’s finances. It prints its own currency, therefore it can’t run out of said currency. It doesn’t need to cut back on spending elsewhere to send these checks and just because it accidentally sent some to dead people. It’s not as if these stimulus checks came out of a pool of tax funds which is slowly running dry, the cash was allocated by Congress and then the money was deposited into people’s accounts. Simple as that.

Well actually there’s a whole lot of technical stuff to this I don’t have time for (you can read economist Stephanie Kelton’s new book “The Deficit Myth” if you want to get all the way into this). But let’s just say that, despite what politicians want you to believe, we can send these stimulus checks, automatically send another round or two of checks, extend the boosted unemployment benefits, and increase food security programs if we want to without cutting a dime from programs that currently exist. All it takes is for Congress to have the political will to do it.

Given the realities of how federal government finances operate and the size of the pandemic economic crunch, the fact that we’ve only given out $267 billion — and wasted $1.4 billion of that on dead people — is actually more of a problem because it’s too little.

For one thing, the small percentage that accidentally went out means that the requirements to get the checks were probably too onerous, if anything, as Bloomberg’s Joe Weisenthal pointed out. To that point, a new report from the Center of Budget and Policy Priorities, based on Census Bureau data, estimated that as many as 12 million Americans may never receive a stimulus checks because of clerical difficulties unless states work hard to get those checks to people.

I don’t know about you, but that seems like a bigger deal that 12 million Americans who need help won’t get it than a fraction of that number of dead people got checks.

In fact, it’s clear that we need to send more checks out now — even if they flow to these same dead people.

Millions of Americans are out of work, millions of families are worrying about where their next meal is going to come from, and millions of Americans are worried about making the next payment on the roof over their head. These are the actual crises about which we should demand the government do something.

Many economists and some politicians have suggested that the checks should be dispersed regularly until we get clear signs that the economy is recovering. This would prevent political fights like we’re seeing now, where one good jobs report is causing Congress to curtail expectations for another round of stimulus despite the fact that the unemployment rate is still higher than at any point since the Great Depression and coronavirus cases are still soaring in many states.

But this idea that we are supposed to be aghast at some slight technical error that led to a relatively minor payment to dead people in the process of trying to save the US economy from a devastating collapse reveals a long-held, broken mindset that has been conditioned into the American public. 

We should be inclined towards generosity in this moment, as my colleague Linette Lopez wrote in a column a couple of months ago. Instead of pointing fingers at each other (living and dead) who got too much, we should be pointing the finger at the government for doing too little.

The human and economic toll of this pandemic due to a too-cautious federal response is far more of a scandal, far more of a failure than these extra checks.

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