Thread by @joshbivens_DC

This WaPo story is infuriating. Sounds like Senate republicans want to go cheap (and cruel) on by far the most-important bits of the economic response to Covid – enhanced UI benefits and aid to state/local governments. 1
washingtonpost.com/us-policy/2020…

Job growth will be 100% determined by the shortfall of aggregate demand relative to potential GDP for the next year. This shortfall will remain enormous if the enhanced UI benefits and the aid to S/L govts are both ignored – these combined constitute a huge “fiscal cliff”. 2

On UI, the extra $600 weekly payment by itself added $840 billion at an annualized rate to U.S. personal income in May. If it goes to zero, we’ll end up a year from now with about 5 million fewer jobs than we’d have if we kept this money flowing. 3
epi.org/blog/cutting-o…

On S/L aid, budget shortfalls given the current economic crisis look to be in the neighborhood of $1 trillion between now and the end of 2021. Anything less than this will see these govts drag on growth like they did after the Great Recession of 2008. 4
epi.org/blog/a-prolong…

S/L spending austerity by itself after 2010 delayed a full recovery to pre-recession unemployment rates by around 4 years. 5

This $1 trillion estimated shortfall assumes January 2020 is the implicit baseline for what S/L govts will need to spend in coming years. But this could be a big understatement of what S/L govts will need. 6
epi.org/blog/as-econom…

These govts are on the front lines of virus response, and, they’re responsible for figuring out how to open schools safely and maintain educational quality in the face of an epidemic. This means they’ll be needing to spend more in coming years than usual. 7

If no S/L aid is forthcoming, we’ll end 2021 with 5 million jobs fewer than we’d have if we fully filled in the $1 trillion (over 18 months) shortfall. 8
epi.org/blog/without-f…

In short, whether or not the economy is severely depressed a year from now – even if the virus is well-managed (big “if”) - depends entirely on what Senate republicans decide to do with the UI benefits and S/L aid. 9

Finally, the WaPo story indicates that as bad as Senate republicans are being, Trump admin is worse – wanting to even throttle back spending on virus management. 10

But managing the virus is the most important precondition for fixing the economy, and you can’t sweep this under the rug by stopping testing – people really will notice mass death and overrun hospitals. 11

Hard not see all of this as Republicans in the Senate and admin having given up trying to fix problems and shifting to attempts to hobble the political prospects of the next Congress and admin. We deserve a lot better than this. 12