The Unassuming Economist

From an article by Chye-Ching Huang and Chad Stone (both at Center on Budget and Policy Priorities):

“The COVID-19 pandemic demands an aggressive direct public health response to contain and treat the virus and strengthen health system capacity. Once policymakers enact legislation that House leaders are now negotiating with the Administration, Congress should move quickly to take further bold steps to achieve the dual and related aims of lessening the threat of a major recession and cushioning the financial blow for millions of Americans, including measures to shore up consumer purchasing power by addressing the loss of income that millions of workers likely will face in the period ahead.

With events involving large numbers of people being canceled and people increasingly avoiding travel, hotels, restaurants, and much more — and with the stock market’s rapid descent — recession looks extremely likely. Indeed, some economists have said that we likely are entering into recession now, and that substantial layoffs and business closures lie ahead. This makes it essential that policymakers act rapidly to take strong fiscal measures to lessen the damage, both to millions of Americans and to the overall economy.

The fiscal policy response should be both aggressive and quick-acting. Since even the fastestacting fiscal stimulus can still take some time to work its way into the economy, policymakers should act very swiftly. There is far more danger in doing too little, too late than too much, too soon.

Among the key sets of measures to institute are measures that can get resources into the hands of tens of millions of low and middle-income households, many of whom will be hit financially by the economic fallout of the pandemic. Doing that is one of the most effective and efficient ways to bolster the economy, as these households spend virtually all income they receive. But it’s only one of a number of steps that should be taken.”

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