Updated: February 25, 2021
Support continues to grow for President Biden’s American Rescue Plan, including among leading economists who recognize the need for urgent action to combat the economic damage being wrought by COVID-19, get relief and support to the families and communities who have been hit hardest by the pandemic, and ramp up vaccinations, testing, and public health capacity so we can get the virus under control.
In an interview with CNN on Thursday, Kevin Hassett, a former top economic advisor to President Trump, expressed support for the American Rescue Plan and cautioned against the risks of failing to act, saying “I think we need to be risk averse … There are so many businesses treading water, barely hanging on. Now they are getting hit by another shock.”
Hassett’s support was echoed by dozens of economists surveyed by Reuters, which found that over 90% of them believed that the American Rescue Plan would “would boost the economy significantly.” Moody’s Analytics, in an independent analysis, similarly found that the Rescue Plan would help create 7.5 million jobs in 2021, double economic growth, and return the U.S. to full employment a full year faster.
The urgency to act was underscored this week with new figures from the Department of Labor showing that nearly 900,000 workers for filed for unemployment benefits, and coming on the heels of previous economic data showing that the United States lost jobs in December.
“They’ve thrown a lot of stimulus at it,” Hassett told CNN Business on Thursday, referring to Biden’s $1.9 trillion rescue package as a way to keep the coronavirus-ravaged economy afloat. “but I think we need to be risk averse.”
CNN said the former Trump administration official fears that without more aid from Washington, the worsening pandemic will cause the US economy to suffer a repeat of the first quarter of last year, when GDP shrank by 5%
“There are so many businesses treading water, barely hanging on. Now they are getting hit by another shock,” said Hassett, who served as Trump’s top economic adviser from 2017 to 2019 before returning in a voluntary role in March of last year. “You could end up in a negative spiral for the economy.”
[read_more id="2" more="Read full article" less="Read less"]
Reuters cited a majority of economists in its poll as saying that Biden’s proposed fiscal package will boost the coronavirus-hit economy significantly, and they expect it to return to its pre-COVID-19 size within a year.
“There are crosswinds to begin 2021 as fiscal stimulus helps to offset the virus and targeted lockdowns. The vaccine rollout will neutralize the latter over the course of the year,” Reuters quoted Michelle Meyer, U.S. economist at Bank of America Securities, as saying.