As the economy struggles to recover amid the coronavirus pandemic, more than 100 top economists are urging lawmakers to implement monthly payments. In an open letter published Tuesday, a total of 156 economists urged for "immediate, bold action to prevent the nation's economic downturn from worsening, including the passing of ongoing direct cash payments to the American people.
Citing the record-high unemployment rates that are "already dwarfing peak levels from the Great Recession," the prediction that the GDP will shrink by 11 percent and millions of Americans believed to have lost their health insurance, the economists state "this recession will require significant and sustained stimulus policies that are responsive to the health of the economy." They added that "it is critical to enact policies that will help promote a robust, sustained, racially equitable recovery and will stay in place until Americans are back on their feet."
Among the recommendations is "lasting direct stimulus payments," something that has proven controversial in Congress. Although a number of bills, including monthly payments, have been proposed, they have faced plenty of criticism. Economists, however, think such payments are the key to "driving the economic recovery and shortening the recession." Acknowledging that the first round of stimulus payments passed under the CARES Act "were a lifeline that helped some get by for a few weeks," the letter said that "the worst is not over," and further aid is required.
"Even after businesses start to re-open and jobs begin to come back, there will be significant economic fallout, and demand will continue to lag if people don't have money to spend. Regular direct stimulus payments tied to economic indicators will help families stay afloat and drive economic activity," they wrote. "Continuing recurring payments until there is reliable evidence of an economic recovery – such as low and declining unemployment – will promote certainty for all sectors of the economy and for state and local governments and federal agencies."
The letter, which did not specify a dollar amount for such payments, also argued for the implementation of extended and enhanced unemployment benefits, some of which are set to expire at the end of this month. It also supported substantial aid to state and local governments, stronger SNAP benefits, and robust child care funding/
Business Insider reports that the letter was published by the Economic Security Project, an advocacy group pushing for basic income, and the Justice Collaborative, signers include Jason Furman, a former top economic advisor to President Barack Obama; Darrick Hamilton of the Kirwan Institute, an expert on the racial wealth gap; and former Federal Reserve economist Claudia Sahm, now at the Washington Center for Equitable Growth, among many others.