Top economists call for recurring stimulus checks
A group of 156 economists published an open letter this week urging the federal government to provide lasting stimulus checks to American households until the nation's economy fully heals from the coronavirus-induced recession.
"Direct cash payments are an essential tool that will boost economic security, drive consumer spending, hasten the recovery, and promote certainty at all levels of government and the economy – for as long as necessary," the economists wrote.
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The letter was published by two advocacy groups: the Economic Security Project, which pushes for universal basic income, and the Justice Collaborative, which fights for reforms to the justice system. Notable signatories include Jason Furman, a former senior economic adviser to President Barack Obama and Claudia Sahm, a former Federal Reserve economist.
If the government sends cash payments to Americans until the crisis recedes, it will help to boost consumer spending, which accounts for roughly two-thirds of the nation's GDP, the broadest measures of goods and services produced in the country.
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Even as businesses begin to gradually reopen from the economic lockdown and jobs start to return -- the Labor Department's jobs report last week showed that employers hired 4.8 million idled workers in June, and the unemployment rate dropped to 11.1 percent -- demand will continue to lag if individuals don't have money to spend, the economists wrote.
"Regular direct stimulus payments tied to economic indicators will help families stay afloat and drive economic activity," they said.
The economists did not specify a cash amount; they suggested that unemployment could be used as an indicator to determine whether the monthly payments are needed or not. Close to 48 million Americans have filed for jobless benefits since the pandemic began.
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"Continuing recurring payments until there is reliable evidence of an economic recovery – such as low and declining unemployment – will promote certainty for all sectors of the economy and for state and local governments and federal agencies," they wrote.
Congress has already approved three massive stimulus packages totaling nearly $3 trillion to offset the economic pain triggered by the outbreak of the virus and subsequent lockdown. That includes the $2.2 trillion CARES Act signed into law at the end of March, which sent one-time payments of up to $1,200 to Americans.
Republicans and Democrats largely agree that another round of aid is needed to help workers and businesses still reeling from the shutdown.
Negotiations between Congress and the Trump administration on another round of virus-related stimulus are set to begin in earnest later this month after lawmakers return to Washington from their two-week Fourth of July break.
Certain measures that are on the table to be included in the next relief package are another stimulus check for individuals earning less than $40,000, payroll tax relief and limited liability protection for businesses.
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President Trump has more than once vocalized his support for a second stimulus check, although it's unclear how much money Americans may receive and when the checks could go out.
“I support actually larger numbers than the Democrats, but it’s got to be done properly,” Trump said during a Wednesday interview with FOX Business' Blake Burman last week. “I want the money getting to people to be larger so they can spend it. I want the money to get there quickly and in a non-complicated fashion.”
The only proposal that’s been passed by either chamber of Congress is the HEROES Act, the massive $3 trillion relief package put forward by House Democrats. Among other things, it includes a second one-time payment of up to $1,200 to some Americans. However, the legislation has stalled in the Republican-controlled Senate.
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