Let’s be clear: We need to provide relief to families and small- and medium-sized businesses hit hard by the closures caused by the pandemic. We must ensure relief goes to communities of color hit so hard by this crisis. The way to do this is to borrow at today's low rates 1/18
Unemployment remains in double-digits. & the official rate a likely under-estimate. “True” unemp rate for July closer to 13.8% than the reported 10.2% b/c of misclassification due to pandemic, while rates remain very high for Black & Latino workers
Yet, the Administration is asleep at the wheel. Enhanced unemployment benefits expired in late July. The amount of benefits workers are receiving have fallen off a cliff:
(And, let’s remember that the weight of the evidence is that the high UI replacement WAS NOT discouraging people from going back to work. Here’s one data point:
We have high unemployment **b/c the Administration has failed to do its job.** The USA has over 170K dead and over 5M cases – an outbreak that’s far worse than other countries in terms of total numbers (& still bad per capita) 6/18
The recent “fixes” aren’t a fix. So far, only one state has been able to put the new benefits in Trump’s Executive Orders in place – and it’s AUGUST 22! washingtonpost.com/us-policy/2020… 7/18
And, oof, there’s more crises to come. Families in serious mortgage distress (more than 90 days late on payments) are at highs not seen since the Great Recession, which, pls recall, was caused by the collapses of a housing bubble. washingtonpost.com/business/2020/… 8/18
American business gets it: ~30 industry groups—incl the Chamber of Commerce—told the WH that they WON’T implement Trump’s payroll tax cut b/c it’s “UNWORKABLE” cnn.com/2020/08/19/pol… 9/18
(And, don't forget: Trump’s payroll tax cut is a cut to revenue for SOCIAL SECURITY with no plan for how to refund it. AND: He said he’ll make those cuts permanent if he can. Yikes. Super bad idea! 10/18)
America needs relief. Now. We can (& should) borrow to make this happen. That’s the right economic plan. Interest rates are at historic lows, which means that it’s cheap to borrow. 11/18
Not only is it cost-effective to borrow now to save lives, family homes, family farms, family businesses, and our economy, but there’s plenty of people with $$ who are ready and willing to finance necessary public investment (i.e, they're still buying t-bills!) 12/18
Low interest rates mean that there’s lots of $$ chasing too few opportunities. Textbook would say we should worry about gov't investment “crowding out” private as the gov’t competes with private firms for capital. But low interest rates mean that’s so NOT the case now. 13/18
A big part of the problem is that we have too many rich people w/ too much $$ --> saving glut. Check out @profsufi thread on this:
Not acting isn’t an option. As EG grantee @thesugar says, “The few green shoots of improved economic data belie the fact that the health and economic crises are far from over. In fact, we are in danger of sleepwalking into economic depression.” equitablegrowth.org/sleepwalking-i… 16/18
While we’re at it taking action, let’s make these recession policies trigger on and off as the economy falls in and out of recession. @JayCShambaugh@RyanDNunn and I put together a whole book on this:
Finally, when the time comes to do big things to get us out of this mess, low interest rates not only mean we can borrow, they also mean that it’s time to tax the rich. A topic for a future Saturday morning thread ... 18/18
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I talked to @kairyssdal@Marketplace about misplaced concern over #austerity—and why handwringing about deficits now will prolong the economic suffering of millions of Americans.
The risk of doing too little to support families & businesses will far outweigh the risk of doing too much
We need to continue to pump money into the economy if we are going to avoid a coronavirus recession that makes the Great Recession a fond memory heatherboushey.medium.com/beware-of-aust… 2/
The premature pullback in government support during the Great Recession is why it took a full decade to return to pre-crisis unemployment rates.
As the past decade has shown, austerity was not the answer then, and it surely is not now. epi.org/publication/wh… 3/
Our economy is in trouble. Why? The virus has roared back. With COVID-19 cases again overwhelming hospitals, leaders across the country are, for the sake of us all, limiting large gatherings and activities that cause the disease to spread – like indoor dining. 1/8
The fact that the United States has failed to contain the virus means that millions of esp small biz & workers will (again) see their incomes fall & livelihoods potentially destroyed. Congress must put together a robust relief plan to support communities through this crisis. 2/8
New employment data -- some quick reactions ... 1/n
From the BLS Commissioner's Report: "Employment in public- and private-sector education declined in September [relative to August]. In the public sector, employment in education fell by 49,000 in state government and by 231,000 in local government." bls.gov/news.release/j…
Ah ... I should start w/the headline: The economy added 661,000 jobs in September, and the unemployment rate fell to 7.9 percent. We are still down 10.7 million jobs relative to February, before the pandemic hit the USA. 3/n
I kick off my book Unbound with one of the slogans of the labor movement: For the Many, Not The Few. I was able to get the good education that enabled me to write this because my father was a member of @IAM751@MachinistsUnion, who fought like hell for their members. 2/10
In the 2000s, I was honored to serve as president of @NonprofitUnion, where we organized think-tank workers. That local now represents @EGLaborUnion. We recognized the union by card check, so staff would not be subjected to Trump’s anti-worker NLRB. epi.org/blog/the-trump… 3/10
As the Hutchins Center Fiscal Impact Measure @BrookingsInst shows, the #coronavirus recession has wiped out years of growth, and were it not for government fiscal stimulus, its effects would have been even worse. brookings.edu/interactives/h… 2/
We are perilously close to something akin to the Depression, and austerity would be catastrophic
Policymakers need to continue to pump money into the economy if we are going to avoid a collapse that makes the Great Recession of 2007–2009 a fond memory prospect.org/economy/beware… 3/
This Friday, BLS will release new data showing how many jobs were gained—or lost—in July. This data is critical for understanding whether the economy is in recovery or if it’s stalling.
The forecasts are mixed.
1/
We expect weak data on the jobs front because of the rise in covid cases across the country, which has led consumers to stay home and policymakers to enforce more social distancing and closures. nytimes.com/interactive/20…
2/
As @ernietedeschi explains in this thread, forecasters looking at new data predict BLS data will show that the economy has either added or shed about 1 million jobs in July