Lost in the melodrama of Rose Garden superspreading, West Wing outbreaks, “Evita/Covita” balcony moments, vice presidential fly sightings and claims of miracle therapies was Federal Reserve Chairman Jerome Powell’s desperate call for Congress to pass a “robust” stimulus package and not fret about “overdoing it.”
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” he said Tuesday in prepared remarks to a meeting of business economists. The bottom line? Failing to invest sufficiently right now would lead to a rash of “household insolvencies and business bankruptcies” that would further stagger the economy and hold back growth.
One of the things Congress got right this year (and considering the brevity of that list, one would think everyone involved would remember this quite clearly) was to approve on a bipartisan basis trillions of dollars in COVID-related relief in March, which was still relatively early in the pandemic. The Coronavirus Aid, Relief, and Economic Security, or CARES, Act was big and broad; one might even call it incautious as it included $1,200 checks to individuals with qualifying incomes and expanded unemployment insurance benefits. It was as if Washington had turned on a fire hose and just spread money across the landscape, and that was exactly the point. The pandemic, the shutdown and job losses were so devastating that this was the best way available to spare the country from full economic collapse.
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