President Biden has presented his $1.9 trillion stimulus plan as the way to get the country out of the pandemic-induced recession. In fact, its provisions show he fundamentally misunderstands the nature of the trouble we’re in.

The plan seems to presume that the recession is being caused by insufficient purchasing power and consumer spending. That’s the only rationale for including his signature element, the additional $1,400 checks he proposes to send to most Americans. Two other provisions — increasing the minimum wage to $15 an hour and increasing the child tax credit to $3,000 a kid and making that amount fully available to all families regardless of how much they owe in federal income tax — would also only make sense if our recession were caused by insufficient consumer demand. None of these provisions are tied to loss of jobs or income as a result of the pandemic; they are simply ways to raise consumer demand and re-float the economy according to traditional Keynesian nostrums.

Such an approach is misguided. Consumer spending is down from pre-pandemic highs, but not because most people have too little money. Thanks to prior stimulus plans, personal income is higher now than it was pre-pandemic. Consumer spending is down by only a few percent from pre-pandemic levels; personal saving soared in 2020 because many people saved the stimulus money they received from the government. Sending those people more money will only increase savings again, not stimulate the economy.

Biden’s plan won’t increase employment much either. High unemployment is mainly concentrated in sectors that are either prevented from operating at normal levels by government restrictions or by fears of contracting the virus. According to the December employment report, the United States has 9.8 million fewer jobs than in February, the last month before the pandemic struck. Almost 4 million — or roughly 40 percent — of those jobs are in the leisure and hospitality sector, which includes restaurants, amusements and other industries that are mostly prevented from operating at full capacity. Another roughly 1.5 million lost jobs are in education, a direct result of government closing schools and universities. More stimulus checks and increased child tax credits won’t open the schools any faster. Bring these people back to work, and consumer spending will naturally increase, further boosting employment and spending in the sectors those returning employees can now patronize.

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Biden should be focusing on these areas of the economy rather than engaging in fruitless and misdirected spending. That should involve a number of novel initiatives. Businesses subject to government-imposed capacity controls or shutdowns should be given direct grants to make them whole. That means sending checks to owners of the hair salons, restaurants and small retail shops that have been devastated. Keeping them afloat during this crisis will preserve their ability to bounce back once mass vaccination allows us to begin to inch back to normal life.

A proper relief package should also include paying businesses who have been indirectly harmed by people’s inability to pay bills. Landlords missing rent, whether from individuals or commercial owners renting to businesses, should be paid for their losses rather than simply being forced to provide moratoriums on repayment. They need cash too, and paying them for their losses makes as much sense as paying extended unemployment benefits or the Paycheck Protection Program. If society thinks the individuals and businesses affected should have to ultimately repay these debts, they should repay the government rather than the landlords. The U.S. government is in a much better position to efficiently recapture this money through the tax code than thousands of private sector entities, which would have to rely on the courts, could ever be.

Biden should also withdraw his effort to raise the federal minimum wage to $15 for all workers, including restaurant employees. It’s one thing to push large, profitable companies such as Walmart to favor their workers over their shareholders; it’s quite another to push thinly capitalized and marginally profitable small businesses to do so. That would be true in any economic environment, but it is especially true for restaurant owners and the like who are barely hanging on. It makes no sense to allow businesses to reopen only to make it economically impossible for them to do so.

Biden is right that the federal government should step in to provide help during this historic pandemic. His plan too often misdiagnoses our economic ills and prescribes medicine that either won’t help or will make the patient sick. If he won’t change his plan, Congress should.

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