Biden team inherits a stumbling economy
The first few hours of the Biden administration Wednesday afternoon are going to be busy. We’re expecting the new president to issue executive actions on the coronavirus and vaccination, immigration and the economy, including an eviction moratorium and student loan relief.
Within the first few days after Wednesday’s inauguration, the Biden White House is expected to send Congress another massive relief package: $1.9 trillion for households and businesses.
Joe Biden has kind of been here before: 12 years ago, he and President Barack Obama took over in the midst of the Great Recession.
“If anything, this is even worse,” said University of Chicago economist Austan Goolsbee, who chaired the Obama White House Council of Economic Advisers.
“We’re in a catastrophic health and economic crisis. We’re still as bad by some measures as the lowest point of the Great Recession,” he said.
We’re still down 10 million jobs, which is more than 5% of all jobs before the pandemic.
And as the virus surged and lockdowns returned this winter, consumer confidence and retail sales fell. The economy started losing jobs again.
But the worst is likely now behind us, said Douglas Holtz-Eakin, who headed up President George W. Bush’s Council of Economic Advisers.
“There remains a tremendous amount of underlying strength in the U.S. economy. If we can sustain those who’ve been out of work with the relief that we’ve seen Congress pass and deal with the virus, there’s a good platform to jump off from,” he said.
Including lots of pent-up consumer demand and accumulated wealth in the hands of higher-income Americans.
But Brad McMillan at Commonwealth Financial Network warned that low-income households and business owners could suffer a lot more in the six to nine months it’ll take for the vaccination program to induce a post-COVID recovery.
“If people lose their apartments, their homes, that cripples them and their ability to recover. We’ve seen tremendous, tragic damage to small businesses. And the longer this goes on and the less people spend, the more of them are going to shut down and not come back,” he said.
And that will only make the national recovery harder, and longer.
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