Toward a More Resilient and Equitable Economy
December 16, 2020
By Ariela Weinberger
Three Roosevelt reports lay out the case for a substantial stimulus investment in a COVID-19 economy.
Nine long months have gone by since Congress passed the CARES Act. The lack of additional federal stimulus is a tragedy that has unnecessarily deepened the financial pain and insecurity many Americans have faced during that time. But, long before COVID-19, structural problems in our economy and a patchy network of public goods left Black and brown communities particularly vulnerable to disruptive macroeconomic events. These divides will only continue to grow in 2021 with a potential “double-dip recession” on the horizon unless Congress enacts bold, stimulative action.
Three issue briefs released today from the Roosevelt Institute provide an approach to economic relief that any stimulus bill should take: a substantial investment in immediate economic recovery through measures that build toward systemic reform.
- Preventing Another Lost Decade: Why Large Federal Deficits Should Be Welcomed, Not Feared, in Today’s Economy, by J.W. Mason (Fellow), argues that the infusion of cash into the US economy from a robust spending bill would be as essential a step toward economic recovery as the individual programs on which that money is spent.
- A Green COVID-19 Recovery: Lessons from the ARRA (American Recovery and Reinvestment Act of 2009), by Rhiana Gunn-Wright (Director, Climate Policy) and Kristina Karlsson (Senior Research Associate), explores the lessons the 2009 American Recovery and Reinvestment Act offers for investments in clean energy infrastructure through stimulus funds.
- A New Deal for Higher Education, by Suzanne Kahn (Director, Education, Jobs, and Worker Power and the Great Democracy Initiative) and ProfessorsJennifer Mittledstadt and Lisa Levenstein from Scholars for a New Deal for Higher Education, looks at examples of specific policies that would advance progressive structural reform in higher ed (for example, remediating racial inequality through stimulus spending).
Taken together, the briefs explore why spending is needed to help stimulate the economy in the short term and argue that such spending must be significant enough in size and carefully structured to advance a long-term progressive policy agenda that tackles racial and economic divides. They also push back against calls for fiscal austerity—policies premised on the flawed idea that we can’t afford to further grow the country’s budget deficit and therefore must cut spending rather than make big investments to help stimulate the economy.
“The economic consequences of COVID-19 have already fallen disproportionately on Black and brown communities. Adopting a fiscal austerity mindset going forward would only further hurt all of the people at the bottom of the K-shaped ‘recovery’ and widen racial inequality,” said Felicia Wong, President and CEO of the Roosevelt Institute. “Instead of austerity, we must meet the current crisis with spending that stimulates the economy in ways that narrow inequality and ensure that our policies create better results for low-income and working-class Americans of all racial backgrounds.”
The approach embodied in these papers builds on a series of COVID-related progressive policy ideas from Roosevelt that could provide immediate economic relief and long-term structural change to the US economy. To learn more about what bold policy reform can do click here and here.
About the Roosevelt Institute
The Roosevelt Institute is a think tank, a student network, and the nonprofit partner to the Franklin D. Roosevelt Presidential Library and Museum that, together, are learning from the past and working to redefine the future of the American economy. Focusing on corporate and public power, labor and wages, and the economics of race and gender inequality, the Roosevelt Institute unifies experts, invests in young leaders, and advances progressive policies that bring the legacy of Franklin and Eleanor into the 21st century.
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