In our opinion: Another stimulus? America needs one badly
America needs to pump more money into an economy that is struggling because of a virus, not as a result of any self-imposed weakness or unsound business practices.
Late Wednesday, Senate leaders announced an agreement on a key piece of a new stimulus bill — a sign that a longstanding logjam among competing forces may be about to end.
We welcome the news. The nation desperately needs a second round of fiscal infusion into the economy, including more checks to individuals and families. As counter-intuitive as it may sound coming from an editorial page that has championed austerity and balanced budgets, this is a struggle that needs to succeed.
America needs to pump more money into an economy that is struggling because of a virus, not as a result of any self-imposed weakness or unsound business practices. Without COVID-19, the economic boom, complete with record low unemployment, likely would be continuing unabated.
The agreement Wednesday, between key Republican leaders and the White House, includes billions for schools and for COVID-19 testing. More details were expected to be forthcoming Thursday. Officials said the Senate plan may come as a series of bills. We hope this is broad and far-reaching, providing aid to key industries and another round of checks to individuals.
Despite recent good news, much of the nation continues to struggle. Utah’s unemployment rate may have rebounded to 5.1%, but some industries — notably tourist-related businesses and airlines — face potentially catastrophic decisions. If airlines, in particular, go under, the rest of the economy will suffer and the movement of goods and people is hampered.
And that suffering would affect Utah, which is a hub for Delta Airlines and home to a soon-to-be-completed new international airport.
Weekly first-time unemployment claims may appear to be stabilizing, but 1.3 million of them were filed last week, and that still is a substantial number that translates into many distressed households.
Senate leaders had said earlier they were considering a new round of checks for people earning $40,000 per year or less. That’s not a bad idea.
Earlier this week, Natalie Gochnour, director of the Kem C. Gardner Policy Institute at the University of Utah, showed us a chart that compiled the top 10 government spending and tax multipliers found in the Heroes Act, which is the bill the Democratic-controlled House passed in May.
Aid to low-income people through a variety of programs, and money to help employers stay in business and retain their workers were high on the list. Direct checks to all Americans scored low,
This, she said, is because low-income people need money to survive and tend to spend it quickly, causing it to circulate through the economy, funding jobs and small businesses. The wealthier one is, the greater the tendency to put extra money into savings.
Whatever the Senate decides to pass this week, hard work will be needed to breach differences with the House. But Wednesday’s agreement is an important first step.
Republicans and Democrats, who came together quickly for the first round of stimulus money, should waste little time now.
That said, Congress needs to resolve to get control of the nation’s overspending once the pandemic is gone. Relief aid, while necessary, added trillions to the national debt and sent the annual budget deficit to record heights.
This could have disastrous consequences in the long run. However, not passing a second stimulus bill could have disastrous consequences in the much shorter run.