Experts agree more federal action must be taken to save the economy. Yesterday, the Wall Street Journal reported that the recovery is expected to be a “swoosh.”
“Named after the Nike logo, it predicts a large drop followed by a painfully slow recovery, with many Western economies, including the U.S. and Europe, not back to 2019 levels of output until late next year—or beyond.
“The sobering new view reflects the depth of the contraction now being recorded for the spring, as well as more evidence that soaring joblessness and months or years of social distancing—particularly in the West—will depress economic activity well into next year.”
That’s why over 100 organizations are urging the creation of America’s Recovery Fund to help businesses across the country reopen and stay open. If you’d like to learn more about America’s Recovery Fund Coalition, the Recovery Fund, or how it will support businesses, employees, and state and local governments, please don’t hesitate to reach out.
Below are calls from experts around the country calling on Congress to take more action.
What They Are Saying: The Country Is United – More Is Needed to Save the Economy
“‘It’s entirely possible, though not a given, that by this summer, we’re going to see 30 percent unemployment,’ said Claudia Sahm, director of macroeconomic policy at the Washington Center for Equitable Growth and a former Fed official. ‘At that point, we’re not talking about a bounceback. We’re not even talking about a Great Recession-style recovery. We’re talking about a really serious problem.’” (Politico, 5/11/20)
“Chairman Jerome Powell on Wednesday predicted the economy will contract ‘at an unprecedented rate in the second quarter,’ warning of ‘double-digit unemployment’ in the month of April and issuing a thinly veiled call on lawmakers to pass additional stimulus measures to support American workers and businesses. ‘The severity of the downturn will depend on the policy actions taken at all levels of government to cushion the blow and support recovery when the crisis passes,’ Powell said during a news conference on Wednesday. ‘It may well be the case that the economy will need more support from all of us, if the recovery is to be a robust one.’” (U.S. News, 4/29/20)
“‘Yesterday morning was the first time in my career that I saw a data release that just made me start shaking.’ The data in question was the report that showed 10 million Americans had filed for unemployment in just the first two weeks of the coronavirus shutdown. [Heidi] Shierholz, who started at [the Economic Policy Institute] one year before the Great Recession of 2008, said these new numbers eclipse anything she’s ever seen. ‘We are really on a whole different scale,’ she said. Shierholz warns that ultimately, the CARES Act ‘is not going to be big enough,’ and that Congress will have to pass a lot more money into the hands of everyday Americans before this is over.” (Business Insider, 4/16/20)
“‘We have consistently argued from the beginning that the $2T CARES Act is nothing like big enough; these data, and the numbers which will follow, make another huge package inevitable,’ said Ian Shepherdson, chief economist at Pantheon Macroeconomics. Gregory Daco, chief U.S. economist at Oxford Economics. (CNBC, 4/2/20)
“The $2 trillion stimulus plan signed by the president likely won’t be adequate to save the US economy from collapse, according to University of Rochester economics professor Narayana Kocherlakota, a former president of the Federal Reserve Bank of Minneapolis. ‘I think the package has been written with the idea that we’re going to be largely out of the woods by the end of June,’ Kocherlakota says. ‘My own forecast of the economy is less optimistic. Congress will have to come back to do more. We will have to go higher than 2 trillion.’” (University of Rochester, 3/31/20)
Notes Paul Krugman, “… In other words, it may be a long time before the economy starts getting the life support it needs right away. And even when workers and businesses finally get the promised aid, the CARES Act doesn’t provide remotely enough money to state and local governments, which are seeing revenues plunge and expenses soar. This is likely to force big cuts in government services precisely when they’re needed most. So what do we need right now? First, we need an all-hands-on-deck effort to resolve the bottlenecks that are holding up unemployment benefits and small-business loans.” (The New York Times, 4/2/20)