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Congress is about to pass a stimulus bill that can inject $1.5 trillion or more into the economy. This will not be enough to cause a recovery.
“Almost what the federal government can do from an economic point of view will give the impression that we are moving towards a recovery,” says Shai Akabas, director of economic policy at the Bipartisan Policy Center, in the most recent episode of Yahoo Finance Podcast Electionomics. “At best, unemployment will remain high, albeit double-digit, until November.”
Most economists say it takes some other stimulus bill, to keep the unemployed off the water, maintain a lifeline for struggling businesses, and help states and cities run out of tax revenue. The challenge is that no amount of stimulus spending will absolutely reopen businesses and get consumers out of their homes as long as the coronavirus is endemic.
The scenario was transparent in early June, when virus hotspots such as Washington state and the northeast controlled the virus and had not yet spread south and west. But an outbreak of cases in Florida, Texas, Arizona, California and other states has increased the number of coronavirus deaths to more than 1,000 per day and forced some spaces to re-impose locks. Consumers are hesitation in fainting and it is transparent that there may not be an economic recovery until there is a vaccine opposite the virus.
[Discover episodes of the Electionomics podcast.]
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: [email protected]. Encrypted communication available. Click here to get Rick’s stories by email.
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