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Hipple & Fischer: Enhanced U.S. Social Insurance Will Be Necessary Until the Coronavirus Recession Recedes—Noted

Summary:
Put me down as saying that we require, right now, not just additional social insurance payments but additional government purchases, additional government employment of test-&-tracers and barefoot nurses, plus powerful steps to boost all forms of investment spending while in-person consumption is depressed: Liz Hipple & Amanda Fischer: Enhanced U.S. Social Insurance Will Be Necessary Until the Coronavirus Recession Recedes https://equitablegrowth.org/new-research-finds-enhanced-u-s-social-insurance-will-be-necessary-until-the-coronavirus-recession-recedes/: ‘Raj Chetty and his Opportunity Insights colleagues... U.S. consumer spending fell dramatically over the past few months, driven by public health and safety concerns... [that] are keeping people, especially those in high-income

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Put me down as saying that we require, right now, not just additional social insurance payments but additional government purchases, additional government employment of test-&-tracers and barefoot nurses, plus powerful steps to boost all forms of investment spending while in-person consumption is depressed: Liz Hipple & Amanda Fischer: Enhanced U.S. Social Insurance Will Be Necessary Until the Coronavirus Recession Recedes https://equitablegrowth.org/new-research-finds-enhanced-u-s-social-insurance-will-be-necessary-until-the-coronavirus-recession-recedes/: ‘Raj Chetty and his Opportunity Insights colleagues... U.S. consumer spending fell dramatically over the past few months, driven by public health and safety concerns... [that] are keeping people, especially those in high-income households, away from purchasing in-person services, indicating that until people feel safe engaging again in in-person services such as dining out or getting haircuts, consumer spending on services—which accounts for 66 percent of all consumer spending—will not meaningfully rebound.... To fix the U.S. economy... [requires] first fix[ing] the U.S. public health crisis. Merely announcing that the economy is “reopened” will not make it so.... Investing in social insurance programs—such as the expanded unemployment benefits enacted by Congress in the Coronavirus Aid, Relief, and Economic Security, or CARES, Act—is the best way to mitigate economic suffering during the recession, rather than stimulus measures targeted toward businesses or the rich.... The fall-off in consumer spending is being driven by high-income households, particularly in areas with high rates of COVID-19.... As of May 31, two-thirds of the total reduction in credit card spending since January was from households in the top 25 percent of the income distribution, whereas spending by households in the bottom quartile had returned to normal levels… .#equitablegrowth #noted #2020-07-10

Bradford DeLong
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

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