Negotiations between the Biden administration and the GOP minority in the Senate reveal strengths and shortcomings in their policy preferences and objectives about how to promote an economic recovery. Through it all, estimates of the domestic output gap – the difference between actual and potential gross domestic product – and what it will take to ... READ MORE >
fiscal aid
Biden outlines next round of fiscal aid
President-elect Joe Biden put forward an ambitious $1.9 trillion fiscal aid plan to address the public health crisis, the damage caused to the economy by the pandemic and the rollout of a national vaccination program. If enacted as proposed, which is highly unlikely, the plan would imply $2.9 trillion in aid pumped into the economy in the near term, ... READ MORE >
The case for assistance to state and local governments
More than 1.3 million state and local government jobs have been lost since December 2019. While this is the result of a broader economic shock across industrial sectors, we expect additional furloughs in state and local governments unless federal aid is quickly put in place to offset the collapse in tax revenues. Although a windfall from capital gains ... READ MORE >
Late year fiscal aid lifts growth prospects for 2021
Congress on Dec. 21 passed a $2.3 trillion year-end spending bill, including $1.4 trillion to fund the federal government through September 2021 and a $900 billion rescue package to provide direct fiscal aid to households and businesses equal to 4.25% of GDP. This represents the second-largest economic aid measure in the nation’s history. We expect the aid ... READ MORE >