Nine months have elapsed since Congress passed the CARES Act: a period of tragic inaction that has unnecessarily deepened the pain and insecurity of the nation’s most vulnerable people. Now, with COVID-19 cases and job losses again rising, many economists are predicting a “double-dip recession.”
We need stimulus now. And any stimulative action must address long-standing, structural problems that long predated COVID-19.
In three new issue briefs, Roosevelt staff and fellows explain why investing in our future now, rather than implementing blunt austerity measures, is vital for an equitable recovery—one that begins today and sets us up for long-term success.
- Preventing Another Lost Decade: Why Large Federal Deficits Should Be Welcomed, Not Feared, in Today’s Economy by J.W. Mason 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 by Rhiana Gunn-Wright and Kristina Karlsson explores the lessons the 2009 American Recovery and Reinvestment Act offers for investments in clean energy infrastructure through stimulus funds.
- A True New Deal for Higher Education by Suzanne Kahn, Jennifer Mittelstadt, and Lisa Levenstein discusses how the progressive values behind the free college movement—for example, remediating racial inequality—can be applied to any federal stimulus funding earmarked for higher ed.
The papers present two key principles for future stimulus spending:
- Stimulus dollars must be large enough and long-lasting enough to affect structural changes to our economy and public institutions; they should help to rebalance power in the market through more broadly accessible public provisioning.
- To that end, stimulus dollars must be “stapled to policies.” In other words, funds should be conditioned on states and other recipient institutions implementing policies that actively fight corporate concentration, empower workers, dismantle racist institutions, and decarbonize our economy, along with other progressive priorities.
We are seeing now that without these two key principles, we short-change our recovery. Tragically, the health and economic consequences of COVID have already fallen disproportionately on Black and brown communities. Adopting a fiscal austerity mindset going forward and refusing to invest in further stimulus spending will only further widen racial inequality. Stimulus dollars will end up in the wrong hands, as they did last spring. States, which cannot deficit spend in a crisis, will be forced to either cut their budgets or find new sources of revenue. Years of potential and innovation will be lost.
Instead of austerity, we must meet the current crisis with spending that stimulates the economy in ways designed to actively narrow inequality, take meaningful steps toward decarbonization, and advance progressive policy priorities such as universal access to higher education. Together, these issue briefs point a way forward.