Why economists support more stimulus

Dec 03, 2020 Travel News

Why economists support more stimulus

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Independent economists are overwhelmingly in favor of passing more stimulus money before the end of the year – and the prospects for such a bill appear to be improving.

Democratic leaders in Congress yesterday signaled their openness to a bipartisan $ 908 billion stimulus package. Democrats would prefer a bigger package, like the $ 3 trillion bill the House passed in May. But House Speaker Nancy Pelosi and Chuck Schumer, the Senate Minority Leader, released a statement saying the bipartisan plan should become “the basis for immediate bipartisan and bicameral negotiations.”

The next step is for Mitch McConnell and other Senate Republicans, some of whom have already backed a $ 500 billion bill. There are political reasons why both sides want to appear sensitive to the economic pain of Americans: The second round of Senate elections in Georgia on January 5 will determine which party controls the Senate.

The economy already appears to have slowed in recent weeks, as the number of virus cases has increased. And the situation will likely get worse if Congress does not adopt another stimulus. Many provisions adopted since the spring are expected to end on December 31. Among the effects:

  • About seven million freelancers, contract workers and other Americans who do not qualify for traditional unemployment benefits will lose their emergency aid. On average, it now works out to $ 1,058 per month.

  • Nearly five million more people without work for at least six months will also be denied assistance – which now averages $ 1,253 per month. The usual limit on unemployment benefits is 26 weeks and a provision that extended it to 39 weeks expires.

  • A tax credit that has prompted more than 125,000 companies not to lay off workers will expire. Businesses will also lose the ability to defer payroll taxes and take deductions for business losses.

  • Aid to states and local governments – $ 150 billion – will expire. Without additional help, these governments will likely have to cut schools, police, health care and other programs.

Moody’s Analytics predicts that without further help, the economy will fall into a new recession early next year, with an unemployment rate approaching 10%. And Jerome Powell, Chairman of the Federal Reserve, said the history of economic crises suggests Congress generally passes too few stimulus, not too many. “Tax support now would really help,” Powell told a Senate committee this week.

Even if the two sides can come to an agreement on Capitol Hill, there is still an obstacle. President Trump is expected to sign the bill during his final weeks in office.

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Every great American sport that has tried to play during the pandemic has successfully completed its season. But none of those who made it this fall – like professional hockey, baseball, and men’s and women’s basketball – have faced almost as high a number of virus cases as they do today. These workloads are now creating chaos for professional and college football.

The NFL had to postpone a game between the Pittsburgh Steelers and the Baltimore Ravens three times, before finally playing yesterday – a Wednesday afternoon, oddly. (The Steelers won, 19 to 14.) On Sunday, the Denver Broncos had to play without a quarterback, and the result was what podcaster Bill Simmons called the worst football game he’s ever had looked.

College football has even more serious problems. At least one team, Ohio State, is at risk of missing the playoffs because they’ve canceled so many games. “History will wonder if this messy, confused and repeatedly interrupted season was worth all the risks,” writes Jemele Hill in The Atlantic.

Some public health officials decided the answer was no. Santa Clara County, Calif., Has banned all contact sports for the next three weeks, meaning the San Francisco 49ers can’t play at home. The 49ers will instead play near Phoenix, where the number of cases is higher than in Santa Clara.

Professional and college seasons always seem more likely to end, given how much the officials who run sports want to hold their lucrative playoffs. But finishes can be messy and end up contributing to the spread of the virus or other injuries as athletes find themselves playing new positions on exhausted rosters.

For more: Kurt Streeter, a sports columnist for The Times, calls on the NFL to end its season early.