I’ve spent nearly my entire adult life working in Britain, but Uncle Sam never forgets about Americans abroad. We can vote in elections. We still file tax returns. And we also, it seems, benefit from Joe Biden’s spending binges. His latest instalment slipped through my letterbox last week: a cheque for $1,400. It’s a stimulus; intended, of course, to rebuild the US economy, but in practice a giveaway for the world.
When the first cheque arrived at the start of this year, I thought it must be a rare glitch in the system: why would the US Treasury want to boost the restaurants of south London? Maybe it was a fake. Donald Trump’s name was stamped at the bottom, which made it resemble Monopoly money. Then last week the second cheque arrived — signed by Vona, the ‘regional distributing officer’ — and I knew something had gone terribly wrong.
It turns out the system works fine: it’s comprehensive enough to find me in London. The flaw is in America’s undiscerning definition of emergency spending. This cash was supposed to be a lifeline to the tens of millions of Americans losing their jobs overnight, who had nothing like the UK’s generous furlough scheme to protect livelihoods. Unemployment peaked at nearly 15 per cent in America last April. In the UK, so far, it’s steadied at around 5 per cent.
I was lucky enough to remain employed. Yet it appears my social security number still qualifies me for free money. Now President Biden continues to top up my income. The same goes for my expat friends, some of whom have never worked or paid tax in the States. We’ve hit the jackpot, sponsored by the Federal Reserve.
Make no mistake: Americans are paying for this. The pandemic response has increased national debt by $4.7 trillion, which works out at an extra $14,000 per head. But Biden doesn’t seem to mind this any more than Trump did. The US recovery is strong — it is expected to outpace China’s — yet still Biden is spending money as fast as he can borrow (or print) it.
No one knows what effect Biden’s trillions will have on the economy. Economists have been warning for months that the $3.6 trillion printed over the past year should come with an inflation warning: that the latest $1.9 trillion stimulus package is landing on an economy already well on its way to heating up. Warnings have not been heeded and Biden is taking the risk. A fourth stimulus bill is on the cards. Rishi Sunak designed his Budget last month with America’s gamble in mind, to make Britain’s finances Biden-proof.
The arrival of these cheques hasn’t just raised economic concerns, but ethical dilemmas as well. What should I do with my Biden money? ‘Cash the cheque, buy us booze,’ says nearly everyone I’ve consulted. Perhaps they’re right. These stimulus bills are no longer about targeting support to the pandemic’s economic victims, but more akin to political bribes; opportunities to bail out debts of Democrat-run states, to ramp up all sorts of non-Covid-related spending in the short time Democrats are guaranteed to control Congress. Who knows when the printing party will end? Might as well enjoy it while it lasts.
But I can’t shake this uneasy feeling. It’s like a legal version of being handed a wad of cash in a crumpled envelope — exciting, significant, but with the knowledge that the money has reached me at the expense of someone else.
Alongside economic crashes, you can always find examples of financial insanity which, amid the craziness of the time, seemed to make sense. Banks offering 110 per cent mortgages, for example, or huge loans that recipients had no plausible means of repaying. Are the signs there now? Are the contents of my overseas letterbox one of them?
I remain torn. For now, my Biden cheque remains pinned to my fridge: a memento of an unbelievable phase of economic history.