Economists’ Public Letter on Recovery Policy: State Aid, SNAP, UI

Public Letter on Recovery Policy (from Scholar’s Strategy Network), released today:

Dear National Lawmakers,

As you consider a new package of aid to support the nation during the ongoing COVID-19 pandemic, now is an appropriate time for the federal government to consider economic research carefully in order to provide well-targeted, significant relief to state governments and to individuals experiencing economic hardship. Support for state budgets, and for safety net programs, most notably funding for the Supplemental Nutrition Assistance Program (SNAP) and for Unemployment Insurance, are wise ways to do this.

Unlike the federal government, most states cannot issue debt to support operating expenses. Economic theory and history show that significant state and local government spending cuts can exacerbate recessions and weaken recoveries. Facing dramatically reduced tax revenues, states and localities will be forced to cut budgets for essential programs that support health, education, public safety, and public transportation, and that reduce poverty and hardship — unless federal support is provided.

Cutting state budgets is pro-cyclical, that is to say, it removes spending from the economy at a time when private sector demand is already reduced, making a robust recovery more difficult. Providing funds to states is a wise investment to hasten recovery.

SNAP and Unemployment Insurance provide food and funds to individuals and families in need. This funding, too, can contribute to a more rapid recovery, since low-income individuals are likely to spend new resources immediately, fostering economic activity. And, of course, these programs directly help individuals in need. State Unemployment Insurance funds have been dramatically depleted, while SNAP benefits have never been high enough to fully address food insecurity, and are especially inadequate in the current context.

Evidence indicates that the effects of COVID-19 fall hardest on Black and Latinx communities, and other people of color, as well as people with pre-existing health conditions, and people in poverty. These measures would provide some important relief.

A robust recovery package should address these issues with significant funds.


Henry Aaron
Bruce and Virginia MacLaury Senior Fellow
The Brookings Institution

Daron Acemoglu
Institute Professor, Dept. of Economics

Jacqueline Agesa
Marshall University

Randy Albelda
Professor of Economics
University of Massachusetts Boston

Elizabeth Oltmans Ananat
Associate Professor of Economics
Barnard College, Columbia University

Michael Ash
Professor of Economics & Public Policy
University of Massachusetts Amherst

Nahid Aslanbeigui
Professor of Economics
Monmouth University

Ron Baiman
Associate Professor of Economics
Benedictine University

Radhika Balakrishnan
Rutgers University

Nina Banks
Associate Professor of Economics
Bucknell University

Christopher B. Barrett
Stephen B. & Janice G. Ashley Professor of Applied Economics and Management
Cornell University

Jacob Bastian
Assistant Professor of Economics
Rutgers University

Swati Bhatt
Princeton University

Alan Blinder
Professor of Economics and Public Affairs
Princeton University

Barry A. Bluestone
Professor Emeritus of Public Policy and Urban Affairs
Northeastern University

Peter Bohmer
Faculty Emeritus in Economics and Political Economy
The Evergreen State College

Leah Boustan
Professor of Economics
Princeton University

Elissa Braunstein
Professor and Chair of the Department of Economics
Colorado State University

Nancy Brooks
Visiting Associate Professor
Cornell University

Clair Brown
UC Berkeley

Christopher Brown
Professor of Economics
Arkansas State University

John Philip Burkett
Professor of Economics
University of Rhode Island

Gary Burtless
Senior Fellow, Economic Studies
Brookings Institution

Oriol Carbonell-Nicolau
Rutgers University

Christopher Carpenter
E. Bronson Ingram Professor of Economics
Vanderbilt University

Howard Chernick
Professor of Economics Emeritus
Hunter College and the Graduate Center, City University of NY

Menzie D. Chinn
Professor of Public Affairs and Economics
University of Wisconsin, Madison

Kimberly E. Christensen
Economics Professor
Sarah Lawrence College

Nathaniel Cline
Associate Professor
University of Redlands

Dorothy Sue Cobble
Distinguished Professor of History and Labor Studies
Rutgers, State University of New Jersey

Richard D. Coe
Professor of Economics
New College of Florida

Sean P. Corcoran
Associate Professor of Public Policy and Education
Vanderbilt University

Janet Currie
Professor of Economics and Public Affairs
Princeton University

Sheldon Danziger
Distinguished University Professor of Public Policy Emeritus
University of Michigan

Willard Delavan
Associate Professor of Economics
Lebanon Valley College

J. Bradford DeLong
U.C. Berkeley

Peter Diamond
Institute Professor Emeritus
Massachusetts Institute of Technology

William Theodore Dickens
University Distinguished Professor

Ranjit S. Dighe
State University of New York at Oswego

Peter Doeringer
Professor of Economics Emeritus
Boston University

Laura Dresser
Associate Director, COWS, Assistant Clinical Professor, Social Work
UW Madison

Matthew Kraft
Associate Professor of Education and Economics
Brown University

Amitava Krishna Dutt
University of Notre Dame

Steven Fazzari
Bert A. and Jeanette L. Lynch Professor of Economics and Sociology
Washington University in St. Louis

Deborah M. Figart
Distinguished Professor of Economics
Stockton University

Robert Forrant
Distinguished University Professor of History
University of Massachusetts Lowell

Ellen Frank
Senior Lecturer
University of Massachusetts-Boston

Gerald Friedman
Professor of Economics
University of Massachusetts at Amherst

James Galbraith
Lloyd M . Bentsen Jr. Chair in Government/Business Relations
LBJ School of Public Affairs, The University of Texas at Austin

John Gallup
Associate Professor of Economics
Portland State University

Irwin Garfinkel
School of Social Work Columbia University

Teresa Ghilarducci
The New School

Lonnie Golden
Professor Economics and Labor-Human Resources
Penn State University (Abington)

John Golden
Associate Professor of Economics
Allegheny College

Michael Goodman
Professor of Public Policy
UMass Dartmouth

Neva Goodwin
Distinguished Fellow
Economics in Context Initiative, Boston University

Gene Grossman
Jacob Viner Professor of Economics and International Affairs
Princeton University

Darrick Hamilton
Executive Director of the Kirwan Institute for the Study of Race and Ethnicity
Ohio State University

Douglas Harris
Professor and Chair of Economics
Tulane University

Oliver Hart
Lewis P. and Linda L. Geyser University Professor
Harvard University

Carolyn Heinrich
Patricia and Rodes Hart Professor of Public Policy, Education and Economics
Vanderbilt University

Harry J. Holzer
LaFarge SJ Professor of Public Policy
Georgetown University

Saul H. Hymans
Professor of Economics & Statistics, Emeritus, Dept of Economics
University of Michigan, Ann Arbor, MI

Kenneth Jameson
Professor Emeritus
University of Utah

Paul Andrew Jargowsky
Professor and Director, Center for Urban Research and Education
Rutgers University – Camden

William G. Johnson
Professor Emeritus, Founder Center for Health Information & Policy
Arizona State University

Harry Katz
Jack Sheinkman Professor
ILR School, Cornell University

Lawrence Katz
Elisabeth Allison Professor of Economics
Harvard University

Haider A. Khan
Distinguished University Professor
University of Denver

Mary C. King
Professor of Economics Emerita
Portland State University

Marieka Klawitter
Professor of Public Policy and Governance
University of Washington

Michael Klein
William L. Clayton Professor of International Economic Affairs
Fletcher School, Tufts University

James Knickman
Retired. Formerly Robert Derzon Chair of Health and Public Affairs
New York University

Yolanda K. Kodrzycki
VP and Director, New England Public Policy Center (retired)
Federal Reserve Bank of Boston

Timothy Koechlin
Director, International Studies Program
Vassar College

Ebru Kongar
Professor of Economics
Dickinson College

Laurence Kotlikoff
Professor of Economics
Boston University

Kate Krause
Emerita Professor
University of New Mexico

Adriana Kugler
Professor of Public Policy and Economics
Georgetown University

Edith Kuiper
Associate Professor
State University of New York at New Paltz

Kevin Lang
Professor of Economics
Boston University

Ronald Lee
Professor of Demography and Economics, Emeritus
University of California, Berkeley

Paul Leigh
Health Economics Professor Emeritus
UC Davis

Victor D. Lippit
Professor of Economics Emeritus
University of California, Riverside

David B. Lipsky
Anne Evans Estabrook Professor of Dispute Resolution Emeritus
School of Industrial and Labor Relations, Cornell University

Mark Long
Professor of Public Policy and Governance
University of Washington

Catherine Lynde
Associate Professor, Retired
University of Massachusetts Boston

Arthur MacEwan
Professor Emeritus of Economics
University of Massachusetts Boston

Bernard Malamud
Emeritus Professor of Economics
University of Nevada, Las Vegas

Julie Matthaei
Professor Emeritus of Economics
Wellesley College

Daniel McFadden
Presidential Professor
USC Schaeffer Center for Health Economics and Policy

Brandon McKoy
New Jersey Policy Perspective

Alicia Sasser Modestino
Associate Professor of Economics and Public Policy
Northeastern University

Alan Monheit
Professor of Health Economics
Rutgers University School of Public Health

Katherine A. Moos
Assistant Professor of Economics
University of Massachusetts Amherst

Julie A. Nelson
Emeritus Professor of Economics
University of Massachusetts Boston

Robert Noland
Distinguished Professor
Rutgers University

Jennifer Olmsted
Professor of Economics and Director of the Social Entrepreneurship Semester
Drew University

Paul Osterman
Massachusetts Institute of Technology

Amanda Page-Hoongrajok
Assistant Professor
Saint Peter’s University

Prasannan Parthasarathi
Boston College

Karl Petrick
Associate Professor of Economics
Western New England University

Karen Pfeifer
Professor Emerita of Economics
Smith College

Lynda Pickbourn
Associate Professor of Economics
Hampshire College

Anne Morrison Piehl
James Cullen Professor of Economics
Rutgers University

Frank Popper
Rutgers (Emeritus) and Princeton Universities

Andrew Reschovsky
Professor Emeritus of Public Affairs and Applied Economics
University of Wisconsin-Madison

Richard Roberts
Professor of Economics
Monmouth University

Yana Rodgers
Rutgers University

Barkley Rosser
Professor of Economics and Kirby L. Cramer, Jr. Professor of Business Administration
James Madison University

Katheryn Russ
Associate Professor of Economics
University of California, Davis

Julia Sass Rubin
Associate Professor
Bloustein School of Planning and Public Policy, Rutgers University

Richard Schmalensee
Professor Emeritus of Economics & Management
Massachusetts Institute of Technology

Tobias Schulze-Cleven
Associate Professor of Labor Studies and Employment Relations
Rutgers University-New Brunswick

Robert J. Shiller
Sterling Professor of Economics
Yale University

Tim Smeeding
Lee Rainwater Professor of Public Affairs and Economics
University of Wisconsin- Madison

Robert M. Solow
Institute Professor Emeritus

Lynn Tang
Professor of Economics and International Business
The College of New Jersey

Robert Tannenwald
Vice President (Retired)
Federal Reserve Bank of Boston

David Terkla
Dean, College of Liberal Arts and Professor of Economics
University of Massachusetts Boston

Robert Triest
Professor and Chair, Department of Economics
Northeastern University

Meredeth Turshen
Professor Emerita
Rutgers University

Paul N. Van de Water
Senior Fellow
Center on Budget and Policy Priorities

Paula B. Voos
Professor, School of Management & Labor Relations
Rutgers University

Geoffrey L. Wallace
Associate Professor of Economics and Public Affairs
University of Wisconsin – Madison

George Waters
Illinois State University

Mark Watson
Howard Harrison and Gabrielle Snyder Beck Professor of Economics and Public Affairs
Princeton University

Eugene White
Distinguished Professor of Economics
Rutgers University

Noé M. Wiener
Lecturer in Economics
University of Massachusetts Amherst

Barbara Wolfe
Richard A Easterlin Professor of Economics and Public Affairs
University of Wisconsin-Madison

Owen Zidar
Professor of Economics and Public Affairs
Princeton University

Many macroeconomists share the view that assistance to the states is essential. From the fourth round survey of the IGM/Fivethirtyeight Covid-19 panel:

Fivethirtyeight discussion in this article. As the graphic highlights, austerity measures imposed upon states due to the collapse in revenue and the inability to borrow is a widely held concern.

CBPP documents the impending shortfalls in state budgets here.

We now project that the state budget shortfalls expected from COVID-19’s economic fallout will total a cumulative $555 billion over state fiscal years 2020-2022. This figure is for state shortfalls only and does not include the additional shortfalls that local and tribal governments and the U.S. territories face.

CBPP estimates here:

Already, state and local employment has declined precipitously. Many of the employment reductions will become permanent if no aid from the federal government is forthcoming in the next rescue package.

On SNAP, see today’s NYT article on popular reliance on this program that the Administration has attempted to cut.

21 thoughts on “Economists’ Public Letter on Recovery Policy: State Aid, SNAP, UI

  1. macroduck

    That’s a pretty decent list of signatories. Unfortunately, your target audience may not recognize that fact. Or care.

    1. pgl

      Menzie put this letter up before with a few notable signatures. There are now a lot more including:

      Barkley Rosser
      Professor of Economics and Kirby L. Cramer, Jr. Professor of Business Administration
      James Madison University

      Not to pick on my Econospeak colleague but his name does add weight to this. Whose name was not on this? Kudlow, Luskin, Moore, and the other 3 stooges. Which means the logic of this letter must be sold.

  2. Moses Herzog

    I want to make clear that this is not a criticism of economists or the profession. People cannot control how others react to their advice anymore than a semi truck driver can necessarily control a car wanting to drive into the blindside of his trailer. But I think these letters do nearly nothing in terms of changing or effecting policy. I think corporate lobbyists are the ones pulling the strings, and have been since at least 1981, and easily arguably before that. But I do applaud economists for getting their opinion out there and on the record, to make transparent the lie legislators often make that “economists say” or “economists tell us”, and then fill in lawmakers’ own selfish propaganda in the blanks. I hope no matter how “moot” these letters are in terms of effecting policy, economists of moral valor will keep making and writing and disseminating these letters like the ones above, to “call out” the legislators for the pathological liars they are.

  3. sammy

    Unemployment currently pays about $1000 per week, or $25/hr,. for not working. When it was $400 per week, or $10 per hour, it was a kind of holy grail for restaurant workers. They would beg to be let go for reasons that would qualify for Unemployment. Even if they were fired for cause they would appeal and always won. I would place ads for workers and 50% would not show up for the interview. At first this confused me, until I learned that recipients were required to look for work and go to interviews. They were afraid they would be offered the job and be ineligible for Unemployment thereafter. If someone’s resume stated they were laid off from their previous job, I would count on a no show interview. I could only imagine the situation when their fallback is $1,000 per week or $25 per hour for sitting at home.

    1. pgl

      “At first this confused me”

      Among other things that confuse poor Sammy. Counting backwards from 100 by 7 and of course summing 2 plus 2.

    2. baffling

      sammy, if you could not hire workers it is because the market is telling you something that you seemed to be too thick to understand. you were not paying enough money to work under current conditions at your establishment. many other restaurants easily employ people. so the only thing that comes to mind is that sammy was a lousy boss that most folks were reluctant to work for. time to face reality sammy, rather than find excuses for why people did not like to work for you. improve your personality, quit thinking of workers as disposable commodities, and you probably can hire a good workforce.

      1. Willie

        Free markets only work when the peasants grovel for their gruel, doncha know? If the peasants’ labor suddenly is worth more, then the free market isn’t working properly as far as people like Sammy are concernet.

    3. macroduck

      “If someone’s resume stated they were laid off from their previous job, I would count on a no show (sic) interview>” Well, among the many hundreds of resumes I reviewed, I’ve never seen one that explicitly indicated someone had been laid off. And when I hired, I never found much difference between people I hired away from another job and those I hired off the jobless roles. I think sammy does not have much real experience with resumes or hiring. But then, most of what sammy has written here is bunk.

      Many businesses which hire minimum wage workers don’t want resumes. They have an application form which includes former employment and job references.

      That $1000 figure sammy cited? How many states pay $1000 a week? New York, which is among the most generous, is right there. Alabama pays a maximum of $265 per week, so even with the federal supplement of $600, that’s only $865, and not all of that ends up in the recipient’s pocket. Alabama’s minimum is $45 – add that to $600 and you get…sammy?…sammy? OK, let me help. $45 + $600 = (sammy?…no?) $645. Not $1000. New Mexico’s minimum? $169. Indiana? $50. And so on.

      sammy, can you use the equation I provided to find the weekly benefit for those who receive the minimum state allotments for New Mexico and Indiana? sammy…?

      Finally, sammy seems unfamiliar with the limits on unemployment benefits. A job, even at minimum wage, can last a long time. Unemployment benefits typically last a few months, and don’t lead to eventual higher pay the way a job can. In most states, unemployment benefits are only available if one paid into the state unemployment fund a year ago. Going for long periods on unemployment, even with brief interruptions for work to re-establish the right to a benefit, is a practical impossibility.

      1. macroduck

        I’m sure everyone here except sammy knows this, but for sammy’s sake, I’ll just point out the obvious. The maximum benefit, which in some but far from all cases amounts to around $1000 per week, goes to those who earned well while employed. They will mostly be eager to get back to jobs which pay more than $1000 per week plus benefits. Minimum wage workers, on the other hand, earn the minimum benefit.

        sammy has asked us to believe that minimum wage workers are receiving $1000 per week in jobless benefits. There are two possible explanations for such an outrageous error – ignorance and dishonesty. sammy?…

        1. sammy


          sammy has asked us to believe that minimum wage workers are receiving $1000 per week in jobless benefits.

          I agree that it is unbelievable that minimum wage workers are getting $1000 per week. Here is how it works:

          Your weekly benefit amount is 1.25% of your total base year wages. Oregon law sets the minimum and maximum amounts you can receive.

          Oregon minimum wage for 2019 was $13.25. so $13.25 x 40 hours = $530 x 52 weeks = $27560 X 1.25% benefit rate =$344/ week unemployment benefits + $600 =$944. The market had driven the hourly rate over $13.25 anyway, here in Portland, which is why most are getting around $1000-$1040 per week

          1. baffling

            “Oregon minimum wage for 2019 was $13.25.”
            that is not the oregon minimum wage, that is specific to portland area only.

            by the way sammy, you never answered the question. did it ever occur to you that you could not hire people because you did not offer enough money for them to deal with a turd for a boss? its a free market. you are free to offer any legal wage you want. workers are free to tell you to go piss into the wind. a boss who continues to offer wages that are refuted by workers is not a very good manager. probably while you had so much turnover to begin with.

  4. Moses Herzog

    People need to get ready, because this is on its way, and if people aren’t willing to take to the streets in mid-November, and possibly even consider the use of physical force if donald trump denies the legitimacy of democratic elections, people need to be willing to “go there”:

    If he has federal agents in unmarked cars (similar to Putin in Crimea) willing to enact violence on regular citizens in Portland, and military generals are willing to escort him with the command of thugs to physically attack protesters in Washington DC, that physical force has to be matched “in kind”.

  5. Moses Herzog

    These are the 4 women on Biden’s short list if I am understanding it correctly. I am happy to be corrected or set straight if this list is somehow incomplete:
    Susan Rice
    Stacey Abrams
    Val Demings
    and (puke) Kamala Harris.

    I see only two on the list of 4 that I consider qualified for the job. Susan Rice and Demings. And as I have stated before Susan Rice FAR outshines any of the others. I just don’t see how you choose anyone other than Rice, when you’re talking about filling in or substituting as “leader of the free world” and you have the oldest candidate to ever take office. I think Demings is sharp of mind and can handle the job, but outside of picking Susan Rice, the other three women are a total crapshoot on what your direction looks like when these women are heads of state, and anyone outside of Rice becomes President in a war situation—do you wanna see what equity markets look like on that day?? Because I sure as hell don’t. You can wave around all the “BLM” signs you want and markets are going to tank quicker than you can say “market panic” if Stacey Abrams is leading this nation in war time.

    1. Barkley Rosser

      Those are the four black women on his list, Moses. I gather Warren is still on it and also maybe Duckworth. The pressure is strong to pick one of those four, but that remains not a done deal.

      1. pgl

        MSNBC had a list of 12 women up for VP nomination. 12 is not a short list. We need a program to sort this out.

        1. Barkley Rosser

          Moulitsa over at Daily Kos claims that the shortlist is down to six, and no longer has Warren on it, no white women at all, which may not be accurate. I have long thought Warren would be good, but also Harris or Rice would be good. According to a recent poll on DK before the possible disappearance of Warren, those who answer polls at DK, whno long favored Warren and Bernie for the presidency, it was Harris on top for VP with 37%, followed by Warren with 25%, and then Rice with 15%, and the rest all trailing in low single digit.

          I think Biden wants somebody who has had serious national level experience or credibility, including some executive experience, which means that Abrams is also not on that DK short list. The list of six according to Moulitsas is Harris, Rice, Demings, Bottoms of Atlanta (the “four black women”), then Duckworth, and Lujan, the gov of New Mexico. So, if that is correct,. no Warren and no Abrans, with probably it getting down to Harris versus Rice as the ones with real serious experience.

          I note that both have “baggage.” Harris’s is both some bad decisions made in the past as DA and AG, as well as her sharp criticism of Biden during the first prez debate, although there is evidence that she has been forgiven for that. For Rice, aside from never having run for office, an issue for sure, there is, wait for it, the ultimate bs item, but the GOP will hammer it to death if she is the VP nominee, BENGHAZI!!!

          BTW, at one point the Biden people made noises about wanting somebody who had also actually run for prez and thus having faced that level of vetting. That means that if Warren is really gone, Harris is the only one left who has faced that, at least on that list of six Moulitsas is putting out. Rice is super competent, and I have met her and agree (and I am not saying that just to turn a certain person here off to her, I mean it). But she has never run for office, much less the presidency of the US. Harris has.

    2. macroduck

      I don’t have a dog in this fight, but I do have a suspicion. Biden is polling well enough, and is enough of a Party guy, that he is probably looking beyond November in thinking about a running mate. Who helps his Party most after November?

      At his age, his VP’s electability is probably a big concern. The idea of electability is kind of fake – nobody knows much – but Biden is a politician and probably thinks he knows. Will he choose Rice when she has never run for office, much less won? Val Demings? Several election victories, police chief (bit of an excessive force problem), swing state. And so on.

    3. macroduck

      Oh, and Biden is apparently reaaly focused on down-ballot gains, so he might look favorably on a running mate from a state in which a Democrat might flip a Senate seat. Just a guess.

  6. joseph

    Your audience might think pro-cyclical is good!

    Why use an inside baseball term when you could just stick with the simple explanation? Who do you think your audience is?

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