Go Big, Go Bold
February 5, 2021
By Matt Hughes
Significant stimulus is necessary now.
The Roosevelt Rundown is an email series featuring the Roosevelt Institute’s top stories of the week.
We Still Need Stimulus
President Biden’s stimulus and economic relief plan may be nearing a reconciliation vote in the coming weeks—not a moment too soon, and not a dollar less than necessary, as progressive leaders agree.
Among Democrats, there is “universal agreement we must go big and bold,” Senate Majority Leader Chuck Schumer said on Wednesday.
“We need to act big,” Treasury Secretary Janet Yellen told Good Morning America. “We need to make sure that we provide a bridge so that people aren’t scarred indefinitely by this crisis.”
“. . . the danger now is not doing too much; it’s doing too little,” Biden economic advisor Jared Bernstein reiterated on NPR.
As economic think tank leaders, including Roosevelt President & CEO Felicia Wong, wrote in a letter to Congress this week, the “$1.9 trillion American Rescue Plan—with its critical public health investments to beat COVID-19, its aid to help struggling families, and its assistance to states, localities, tribes, and territories—is an appropriate scale of new spending under current conditions.”
Roosevelt Chief Economist Joseph Stiglitz agrees: As he writes for Project Syndicate, “. . . where there should be no disagreement is that large amounts of money are needed urgently, and that opposition to it is both heartless and dangerously short-sighted.”
We Can Avoid Years of Hardship
Reinforcing the urgent need for significant stimulus are underlying findings from the Congressional Budget Office’s latest 10-year economic projections, Roosevelt Director of Progressive Thought Mike Konczal and Roosevelt Fellow J.W. Mason explain in a blog post.
Though the CBO projects a smaller-than-expected output gap (the difference between actual GDP and potential), Konczal and Mason’s analysis flags three problems—which together bolster the case for stimulus.
- The CBO is too optimistic about short-term growth.
- The CBO is too pessimistic about long-term growth.
- The CBO is too complacent about the economy not reaching full employment and potential output until 2025.
“There is no reason we should accept an additional four years of depressed incomes and elevated unemployment. So even taken at face value, the CBO’s numbers imply that the economy is still in need of major stimulus,” they write. Read more.
Cancel Student Debt, Reduce the Racial Wealth Gap
“One of the quickest ways that President Biden could begin to fulfill his promise to Black America, without needing to wait for Congress, is to cancel all federal student debt through executive action,” Roosevelt Fellows Naomi Zewde and Darrick Hamilton write in a New York Times op-ed.
“ . . . a full cancellation would provide the best outcome of all, and would protect young Black people who sought to use education as a tool for social mobility rather than punish them for pursuing the very credentials they need just to obtain the income of less-educated white people.” Read on.
What We’re Reading and Listening to
Why Are There So Few Black Economists at the Fed? – New York Times
Isabel Wilkerson on Caste and William Darity on Reparations [podcast] – Here’s The Thing with Alec Baldwin
How Congress Learned to Stop Worrying and Start Handing Out Cash – Vox
The Numbers Don’t Tell the Whole Story – New York Magazine