People who specialize in money are weighing in on the next stimulus package, and they’re urging Congress to get more money into your pocket: One hundred fifty-six top economists, most from dozens of top-tier U.S. universities and think tanks, sent an open letter to Congress asking for:
- ongoing stimulus checks
- extended additional unemployment payments
- state and local government aid
- enhanced SNAP benefits
- childcare funding
The letter—not to be confused with last month’s letter from 150 economists including Ben Bernanke, with similar requests—arrives one week after the Republican-led Senate left for its July recess without drafting a new stimulus bill. The economists call for automatic and ongoing stimulus checks, tied to economic indicators, until the economy improves.
“Direct cash payments are an essential tool that will boost economic security, drive consumer spending, hasten the recovery, and promote certainty at all levels of government and the economy—for as long as necessary,” the economists wrote.
The letter is a master class in subtly explaining basic economic concepts (in just one page!), to a Congress that is composed of roughly 99% noneconomists.
They gently refute a common refrain among Republicans in Congress: that Americans returning to work will repair the economy. The economists write that “consumer spending accounts for about two-thirds of the GDP so reviving the economy will require sustained efforts to strengthen it. Even after businesses start to reopen 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.”
Translation: Our economy is dependent not on jobs, but on the constant circulation of cash.
The letter also delicately reframes cash assistance not as a handout, but as “an important element of economic aid,” while indicating policy details: That the payments should go to low- and middle-income houses payments, who studies have shown tend to spend stimulus payments immediately. The economists also slide in policy parameters, such as that the payments should continue until there is “reliable evidence of an economic recovery—such as low and declining unemployment.”
The letter was released through the Economic Security Project, a left-leaning initiative to improve the lives of low- and middle-income Americans founded by Facebook cofounder Chris Hughes, and the Justice Collaborative. Some of the economists on the list have previously been associated with conservative-leaning organizations.
Congress returns to session on July 20.
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