We anticipate [in April] the largest one-month spike in the unemployment rate in history, which underscores the critical importance of extending support to working families and those who have recently lost their jobs. The CARES Act passed by Congress last week, which broadened UI eligibility and increased weekly unemployment benefits by $600, along with providing direct cash payments to Americans, was a good and needed first step. But given the scale and scope of the current crisis, much more is needed to give relief to struggling families.To struggling families, yeah. And to the economy. If they throw enough money at people, they can keep economic forces from compounding the sharp decline created by our response to Covid-19.
If they don't, we're in a world of shit.
4 comments:
Art wrote:
"sharp decline created by our response to Covid-19"
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Sounds like you are saying the response to the virus is worse than the virus. You could be right but who has the guts to test that theory?
Hi Jim. Nah, not saying the response to the virus is worse than the virus.
I think it is pretty clear that the response to the virus is creating a recession. Quick glances at the Weekly Economic Index and recent Initial Claims data is enough to show two things:
1. The economy's reaction to our response is sudden and severe; and
2. That reaction had not occurred as of March 7th.
I have in mind (among other things) the people who have been saying for 8 years now that "we're gonna have a recession any day now". Those people were NOT right. The economy was in good shape -- good for the "new normal" anyway -- and was not preparing to go into recession. The recession is the direct result of shutting down the economy to deal with the virus. Anyone who says otherwise is wrong.
I also think that our response was necessary. (I said as much in one of my posts, but it looks like I didn't post that one yet.)
I also think that this exact same response, if it had been applied a month or more earlier, would have been MORE effective against the virus while doing LESS harm to the economy.
The first thing I heard about a covid-19 economic stimulus sounded great: It sounded like a temporary Guaranteed Income program big enough to prevent economic forces from compounding the covid shutdown and creating a "world of shit". Unfortunately, that idea seems to have been immediately scrapped. What we ended up with struck me as being largely driven by politics, on both sides. If there was ever an event that should have remained above the political fray, the pandemic is it.
Finally, the TCF quote seems to be focused on taking care of people. Even the name of the "CARES Act" appears to be focused on people. I believe it is necessary to respond on a macroeconomic level and to focus on the economy. If we make the economy work right, the economy takes care of the people, or, same thing, the people are able to improve their own condition.
We don't fix the economy that way, of course.
It seems that it is really hard to know how to respond to this virus. Sweden claims they are doing well by just isolating the vulnerable people and letting everybody else carry on as usual.
Doctors also don't know how to respond. Some doctors are saying that ventilators may be killing more people than are saved.
https://time.com/5818547/ventilators-coronavirus/
Yeah I saw that about Sweden. A seriously different approach.
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