Economists Believe These 7 Things Can Help the US Economy Recover
Econofact, a nonpartisan economic publication, belives these 7 things can help the US pull itself out of the recession, according to CNBC.
These 7 things should be prioritized by Congress in the next stimulus package so that the US can get the coronavirus under control and back to business as usual.
1. A Consistent Example from the Government
The government needs to consistently show citizens examples of how they can combat the pandemic. This means not pressuring states and cities to faster than planned and encouraging the use of face masks and social distancing until the virus is under control. One of the biggest issues during the coronavirus crisis has been inconsistent messages about the severity of the coronavirus.
“There’s been such mixed messaging, it’s really affecting people’s understanding and willingness to take actions to control the virus more,” said Michael Klein, executive editor of Econofact and professor of International Economic Affairs at The Fletcher School at Tufts University. “If you didn’t tend to believe in the importance of face masks, there were politicians pushing that view so you might be listening to them.”
2. Extend Enhanced Unemployment Benefits
Extending the federal unemployment boost is crucial to getting the economy back on track, and is more effective than single payments. These unemployment benefits help those who need it most during the coronavirus crisis. On Monday, Senate Republicans proposed a plan to extend unemployment benefits at $200 per week through September, replacing the $600 per week.
“It’s not that people don’t want to work, the jobs just aren’t there,” says Klein. “The complaint that UI was too generous and therefore preventing people from going to work seems to me to be quite overblown.”
“The profound impact of the economic fallout is truly hurting many working Americans, and it is imperative to provide financial support and workable solutions commensurate with their financial obligations,” says R.A. Farrokhnia, professor of finance at Columbia Business School.
3. Increased funding and expanded eligibility for SNAP
In June, 26 percent of Americans had gone without meals or received assistance from a charity or government program for groceries due to the coronavirus pandemic. The Supplemental Nutrition Assistance Program, or SNAP, helps provide food benefits to low income people so they afford groceries. Klein believes this is the biggest safety net for unemployed persons right now.
“You have to help people, especially in the most vulnerable sectors,” says Klein. “Otherwise, there’s going to be a huge amount of human economic hardship in addition to the health crisis.”
Furthermore, SNAP is “one of the fastest, most effective forms of economic stimulus because [recipients] quickly inject money into the economy — and a SNAP benefit increase can be implemented virtually immediately,” writes the Center on Budget and Policy Priorities. Every “SNAP dollar that a low-income family receives enables the family to spend an additional dollar on food or other items.”
4. Support state and local governments
Support for state and local governments is imperative because of the inability to run a deficit. Unlike the federal government, when the money dries up there is no I-O-Us. Without additional funding, “you’re going to have teachers and firefighters and police officers laid off because of the deep deficits,” said Klein.
5. Subsidize COBRA payments
Millions of Americans lost their health insurance coverage and their jobs because of the coronavirus crisis. This requires these individuals to pay for health insurance out of their own pockets, which is quite expensive. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which allows the unemployed to keep their previous job's health insurance plan for a certain amount of time.
6. Provide renter assistance
There are many risks in the housing market. The federal government may need to provide “renter assistance for people who cannot afford their rent due to Covid-related decline in income,” said Stijn Van Nieuwerburgh, a professor of finance and real estate at Columbia Business School. . “Especially if they should receive unemployment insurance but are still waiting for some or all of their payments.”
Those familiar with the industry have asked the federal government to set aside $100 billion for rental assistance and a nationwide eviction moratorium. On Friday, the eviction moratorium from the CARES Act will expire.
7. Increase child-care funding
With kids in online classes, parents won't be able to return to work unless someone can watch the kids. Child-care advocates believe $50 billion in funding is needed for child-care centers and schools to improve their facilities, hire more staff, and afford the equipment to meet local, state, and federal health standards.