In new comments and op-eds, leading economists agree that additional stimulus is urgently needed to rescue our economy and working families bearing the brunt of the economic and public health crisis. More than 120 economists, signed a letter calling on Congress to pass Biden’s American Relief Plan and noted the importance of immediate action. They add their voices to a chorus that includes top economic advisors from the last four presidents:Kevin Hassett, Gene Sperling, R. Glenn Hubbard, and Alan Blinder.
And, their comments were echoed in a column from Nobel-winning economist Paul Krugman who wrote: “The main purpose of the proposed plan isn’t stimulus, it’s disaster relief. The U.S. economy will remain depressed as long as the pandemic is rampant, so the goal is to help those parts of our society hit hard by the constrained economy to make it through with minimum damage. This includes families with unemployed workers, state and local governments that can’t run deficits and are taking a financial hit, and businesses hurt by lockdown.”
Yesterday, Chairman of the Federal Reserve, Jerome Powell,said that additional action from Congress would “help households and businesses weather the downturn as well as limit lasting damage to the economy that could otherwise impede the recovery.”
These comments are belied by a new report from the United States Food and Nutrition Service showing that 8 million more Americans are applying for food assistance than last year. The report notes that 44 million individuals are currently on the Supplemental Nutrition Assistance Program.
Read the full letter from 120 economists below:
“The coronavirus has had a catastrophic impact on America’s economy, families and businesses. Since the crisis began, tens of millions have been forced to file for unemployment insurance, nearly 8 million have fallen into poverty, hundreds of thousands of businesses have shuttered, our nation’s industrial production has been severely damaged, and the inability of millions to make their rent and mortgage payments is threatening to plunge this nation into a housing emergency.
“Unfortunately, the steps taken by the previous administration and Congress were not enough to help families and businesses weather the storm, nor for our nation’s economy to fully recover. While the COVID relief package passed at the end of 2020 was better than nothing, it was too little and too late to address the enormity of the deteriorating situation. The modest increase in unemployment insurance, paltry direct stimulus checks to families, minimal rental assistance, and absence of aid to state and local governments have severely blunted the impact of the legislation.
“That’s why it’s critical for Congress to immediately pass a new coronavirus relief package that will provide additional assistance to families and businesses struggling through a hard winter, and to provide the economic boost required to promote growth and prosperity. This includes substantial unemployment benefits and stimulus checks, help for struggling renters and homeowners, and significant state and local aid that will pay for essential workers, as laid out by the Biden administration’s robust rescue package.
“There are some who suggest America cannot afford more relief at this time. They are simply wrong. Such thinking helped exacerbate and prolong the damage caused by the 2008 financial crisis. History shows that what our nation cannot afford is inaction or timidity in the face of what many consider to be the greatest economic disaster since the Great Depression.
“For this reason, we urge Congress to put partisanship aside and show bold leadership during this time of crisis by passing a coronavirus relief package that meets the urgency of this moment.”