There’s debate among economists about how the American economy will respond to the injection of $1.9 trillion from the new pandemic relief package.

Creighton University’s Ernie Goss predicts it will spur inflation.

“It’s the wrong package at the wrong time,” Goss said.

Iowa State University’s David Swenson disagrees.

“This bill was important and it’s needed,” Swenson said.

Swenson and Goss debated the so-called American Rescue Plan during a joint appearance on this weekend’s “Iowa Press” program on Iowa PBS. Goss said sending more federal money to state and local governments is a mistake.

“I’ll use a good economic term: crazy,” Goss said. “It’s allocated according to the unemployment rate at the end of the year. Now, could that make sense to anyone other than a state that’s been in lockdown, making bad decisions?”

Swenson said there should have been a formula that took into account several factors, not just unemployment rates, for distributing that $350 billion to states and local governments. Swenson said the package, overall, covers a wide range of categories that weren’t adequately addressed in the first two pandemic-relief packages.

“Businesses that are stressed — restaurants, dining and drinking establishments especially – (get) another big chunk of money,” Swenson said. “…A lot assistance has also been…targeted especially for back rent.”

The plan did not include an increase in the minimum wage. Swenson said the minimum wage should be “much above” the current $7.25 per hour and future increases should be tied to the inflation rate, to get the politics out of it.

“We create a lot of either misery or underperformance with regard to the labor force as a consequence of an artificially low minimum wage,” Swenson said. “Yes, we have businesses out there that the market wage is higher, but we still have a substantial fraction of people that have to work at that minimum wage.”

Goss agreed the minimum wage is too low, but he said raising the wage at this time would hammer the hospitality industry.

“For businesses, manufacturers and the small businesses that we survey, the big issue is finding highly qualified workers,” Goss said, “so they’re bidding up the wage right now, well above the minimum wage for manufacturers.”

There is $10.4 billion for agriculture in the pandemic relief package President Biden approved last week. Both economists say with expanding exports and rising commodity prices, there won’t be a need to match the extra $46 billion in payments the Trump Administration sent farmers in 2020.