Coronavirus forecasts worsen as experts say trillions of dollars needed to stimulate economy back to health
As noted here, nobody really knows how far down the economy is headed or what it will take to head it in a different direction. But some analysts are taking a stab at what we’ll be dealing with and what it will take to repair the damage from shutting down all but essential bits of the economy for weeks or months. Not knowing whether it will be weeks or months (or worse) is one of the many factors hampering reasonable forecasts.
Some were predicting two weeks ago that the government would need to inject hundreds of billions of dollars of fiscal stimulus into the economy in addition to the monetary spur provided by zero interest rates. Senate Republicans are pushing what chief White House economic adviser Larry Kudlow calls more than a $2 trillion injection. But that huge amount—$1.3 trillion more than the 2009 Obama stimulus that only three congressional Republicans supported—won’t be enough if the COVID-19 plague takes longer to conquer than a few months, which many health experts say is possible, and even likely. Said Yale’s Andrew Metrick, a leading expert on economic crises: “If it lasts a year, it’s going to be several trillion they have to spend to keep people from starving.”
(Crossposted with DailyKos. Image CC from Pixabay)