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The necessary public health measures that the nation is taking to reduce the spread of COVID-19, coupled with high levels of uncertainty about how long these measures — or even more serious ones — will need to remain in effect, are making a sharp economic decline very likely, with many economists noting that the economy is almost surely already in recession.
Given the sharp rise in unemployment we will likely see in coming weeks, there is an enormous risk that our fiscal policy response will be too small to cushion the blow to individuals and families or to significantly affect the downward trajectory of the economy.
The risk of an inadequate response — resulting in significant hardship to families that can’t make ends meet and a considerably deeper and longer recession — vastly exceeds the risk of doing “too much.”
A new paper presents CBPP’s policy recommendations for combatting the crisis we’re facing. These include:
- Helping more people access health care and providing states with fiscal relief to help them meet increased demand
- Assisting struggling individuals and families
- Issuing broad-based payments to bolster households’ finances and consumer demand
- Improving the new paid leave provisions of the Families First Act
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