That is, the US economy literally shrank by a greater annualized percentage in just three months than in the entire four years (peak to trough) from 1929-1932, the worst of the Great Depression, when GDP shrank by 30.5%. Let that sink in. Meanwhile, the UK is currently experiencing their worst recession in at least 300 years. Now that really says something!
Thus, a very, very big stimulus is necessary right now to prevent a long-term, full-blown depression of epic proportions. Depressions are fundamentally caused by a shortage of money. After all, GDP is literally just a spending measure, and most of that is consumer spending and government spending. The caveat, of course, is that not even all the money in the world could fill (and can barely even briefly paper over) the inherently massive hole left in a shuttered-by-fiat economy until after the economy is fully reopened, at least not for very long. Thus, the TSAP recommends the following steps be taken, yesterday:
- Expand the $600 per week to ALL Americans period, not just those receiving unemployment benefits, no strings attached. Anyone with an SSN or ITIN gets it. Maintain such payments until at least December 2020.
- Create a permanent UBI for all Americans, of $230 per week ($1000 per month) for adults and half that amount for children and young people under 18, for when the temporary extra $600 finally expires. Again, no strings attached.
- Pass the HEROES Act and all of its associated stimuli, not the cheap Republican knockoff version. After all, without essential workers, civilization would have collapsed by now, so it is literally the LEAST we can do to thank them.
- Extend the eviction moratorium until September 1 or until enough of the funds from the above are disbursed into the pockets of the people so they can pay enough to avoid eviction, whichever occurs later. Consider also cancelling (and directly compensating with federal funds) landlords for all past due rent dating from March 1 until August 1.
- More funding to shore up small businesses, which are the very bedrock of the economy.
- Keep the US Postal Service running with whatever federal funds are necessary.
- Increase aid to the states, and funding for hospitals as well. And while we're at it, implement Medicare For All as well.
- Three words: Green New Deal.
- And of course, DON'T shut down again!
As for the so-called National Debt, that is really a non-problem for a Monetarily Sovereign government like our federal government, since they can literally just print the money. And right now we have far more to worry about from deflation than we would from inflation. Even if inflation did occur, all the federal government would have to do is resolve the shortages in goods and services that caused it, by directly purchasing such goods and services at a premium and selling (or giving) them at a loss. And failing that, the FERAL Reserve (which, we gotta say, has been doing the heaviest financial lifting in terms of shoring up the economy just enough to prevent a total collapse thus far) can always raise interest rates and/or the reserve ratio (both of which are at rock-bottom levels), sell bonds to shrink its massive balance sheet (Quantitative Tightening), and/or drain and sterilze excess bank reserves if and when the "inflation dragon" ever does rear its ugly head at some point. Thus, it would really be a non-problem.
So what are we waiting for?