Open Letter to Lawmakers: “On Recovery Policy”

From Scholars Strategy Network, an open letter:

Economists’ Letter on Recovery Policy
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.

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Lessons from the Past (i.e., the Last Recession)

Remember “austerity” and “expansionary contraction” stories? Well, if you don’t, then gird yourself for another round of claims (primarily by non-macroeconomists) about how state and local governments need to tighten up their finances, by cutting spending (and cutting taxes to necessitate further spending cuts). Perhaps, we should consider expanding federal transfers to the states and localities…From the fourth round survey of the IGM/Fivethirtyeight Covid-19 panel:

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Trumpian True Believers

A reader defends the Trump administration’s implementation of public health policies in the face of the Covid-19 pandemic:

Trump never dismissed the pandemic, if you look at his full quotes rather than dishonest snippets. He has always followed the advice of his senior health policy officials. And Trump did a tremendous amount to manage the pandemic. Unfortunately, he gets little credit for that, since the media has actively suppressed the Administration’s accomplishments.

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Downward Revision in GDP and Consumption Outlook

Goldman Sachs observes, over the weekend:

The US has experienced a dramatic resurgence of Covid over the last two weeks, with confirmed daily new cases surpassing 50,000. In response, officials have paused or reversed reopening in states containing more than half the population.

A combination of tighter state restrictions and voluntary social distancing is already having a noticeable impact on economic activity. States with the most severe deterioration in the Covid situation saw declines in consumer and workplace activity at the end of June that will likely continue into July, and activity flattened in other states.

The healthy rebound in consumer services spending seen since mid-April now appears likely to stall in July and August as authorities impose further restrictions to contain virus spread. The ongoing recovery in manufacturing and construction should be largely unaffected, however.

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