There are several concerns associated with the additional fiscal spending I advocated in my last article. One is the additional debt. Many people, including my colleague, Jack Geiger, have expressed concern about the size of the federal stimulus already enacted. I share his concerns on potential defaults by companies loaded up on debt from pre-COVID-19. However, I am less inclined to agree with his concerns regarding the federal debt, including the devaluation of the dollar and potential future tax increases, at this stage.
All by Henry SooHoo
Need for Speed Part 1: The Case for Additional Fiscal Stimulus
As America continues its fight against COVID-19, its economy has taken a serious battering. Even after two major rounds of fiscal stimulus totaling nearly $3 trillion, jobless claims have soared past 35 million in the last eight weeks as large swaths of the country shut down to slow the spread of the virus. Total nonfarm payroll employment fell by 20.5 million in April while unemployment reached 14.7%. The numbers undercount the losses due to methodology and labor force participation rate decline, yet they still represent the largest over-the-month loss in the history of the series. As hard to believe as this may be, current fiscal stimulus is insufficient. We must act bigger and faster if we hope to come out of this crisis any time soon.
