Evidence is building that the American economy badly needs a jolt close to what President Joe Biden and Democrats seek to give it, which is far more than the limp $600 billion relief plan Republicans are offering up.
It begins with last week’s jobless claims, which dropped less than expected to just shy of 800,000, a sign the labor market is stagnated as COVID-19 cases and deaths continue to bedevil every corner of the country. “The pandemic has led to the largest 12-month decline in labor force participation since at least 1948,” quoth Fed Chairman Jerome Powell.
It continues with the report from JPMorgan Chase finding that enhanced unemployment payments — which will expire in mid-March if Republicans get their way, and go through September under Biden’s push — “played an important role in maintaining household spending and wider macroeconomic stability.” Moreover, the payments “likely played little role in discouraging people from finding work.”
It gets stronger still with an analysis from Morning Consult’s economics team showing that $1,400 stimulus checks “narrowly targeted to low-income adults and parents combined with enhancements to the country’s unemployment benefit system would prevent unnecessary financial hardship and mitigate future economic risks.”
Under the Biden plan, New York state government would get a desperately needed $12.6 billion to help fill the hole COVID blew into state coffers, in no small part by devastating the tourism economy, commuting and more. That could stave off huge cuts to services the vulnerable depend on, not to mention huge tax cuts that risk chasing more wealthier people and companies away.
Just about the only argument against taking bold action now is the fear that spiraling debt, which now exceeds the size of the entire U.S. economy for the first time since World War II, could undercut the country’s underlying fundamentals. But it’s rich indeed for Republicans who leaned on the gas pedal when it suited them politically under President Donald Trump to suddenly demand we slam on the brakes today.
Stimulate now. Pay later, when we’re off our backs.