We Still Need Stimulus
President Biden’s stimulus and economic relief plan may be
nearing a reconciliation
vote in the coming weeks—not a moment
too soon, and not a dollar less than
necessary, as progressive leaders
agree.
Among Democrats, there is
“universal agreement we must go big and bold,” Senate Majority Leader
Chuck Schumer said on Wednesday.
“We need to act big,” Treasury
Secretary Janet Yellen told Good Morning America. “We need to make sure that we provide a
bridge so that people aren’t scarred indefinitely by this
crisis.”
“. . . the danger now is not doing
too much; it's doing too little,” Biden economic advisor Jared
Bernstein reiterated on NPR.
As economic think tank leaders,
including Roosevelt President & CEO Felicia Wong, wrote in a
letter
to Congress
this week, the “$1.9 trillion American Rescue Plan—with its critical
public health investments to beat COVID-19, its aid to help struggling
families, and its assistance to states, localities, tribes, and
territories—is an appropriate scale of new spending under current
conditions.”
Roosevelt Chief Economist Joseph
Stiglitz agrees: As he writes for Project
Syndicate, “. . . where there should be no disagreement is that large
amounts of money are needed urgently, and that opposition to it is
both heartless and dangerously
short-sighted.”
We Can Avoid Years of
Hardship
Reinforcing the urgent need for
significant stimulus are underlying findings from the Congressional
Budget Office’s latest 10-year economic projections, Roosevelt Director of Progressive Thought
Mike Konczal and Roosevelt Fellow J.W. Mason explain in a blog
post.
Though the CBO projects a
smaller-than-expected output gap (the difference between actual GDP
and potential), Konczal and Mason’s analysis flags three
problems—which together bolster the case for stimulus.
- The CBO
is too optimistic about short-term growth.
- The CBO
is too pessimistic about long-term growth.
- The CBO
is too complacent about the economy not reaching full employment and
potential output until 2025.
“There is no reason we should
accept an additional four years of depressed incomes and elevated
unemployment. So even taken at face value, the CBO’s numbers imply
that the economy is still in need of major stimulus,” they write.
Read
more.
Cancel Student Debt,
Reduce the Racial Wealth Gap
“One of the quickest ways that
President Biden could begin to fulfill his promise to Black America,
without needing to wait for Congress, is to cancel all federal student
debt through executive action,” Roosevelt Fellows Naomi Zewde and
Darrick Hamilton write in a New York Times
op-ed.
“ . . . a full cancellation would
provide the best outcome of all, and would protect young Black people
who sought to use education as a tool for social mobility rather than
punish them for pursuing the very credentials they need just to obtain
the income of less-educated white people.” Read
on.
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