Nearly nine months into the COVID-19 pandemic and accompanying recession, one thing is clear: The US economy will not have a V-shaped recovery. Despite the CARES Act, upper-income Americans continue to experience an entirely different economy than lower-income Americans. Misplaced concern over the deficit and poorly designed, broad-based policy interventions are largely to blame.
While the root cause and scale of the COVID-19 recession make it different from any the US has faced in recent memory, we can apply lessons learned from past economic crises to design effective policy for this one. Once triggered, downturns follow a familiar pattern, whereby businesses see sales shrink, firms reduce investment and lay off workers, and families limit consumption. The COVID-19 recession brings the added complications of both decreased demand for and supply of some once-routine activities, heightened uncertainty about the severity and duration of the pandemic, and acute health and economic disparities for low-wage workers—disproportionately people of color.
In The Economy of Tomorrow: Recovering and Restructuring after COVID-19, Roosevelt Chief Economist Joseph Stiglitz outlines what we know about the US economy from past crises, explains how we can apply those lessons to the ongoing COVID-19 recession, and offers policy recommendations to enable a robust and equitable recovery, including:
- Prioritizing resources to end the pandemic;
- Providing liquidity assistance to the businesses and individuals at greatest need;
- Shoring up funding to state and local governments; and
- Guaranteeing unemployment benefits to workers for as long as is necessary.