Economy

More Cash Payments Would Speed Up Recovery, Economists Say

An open letter signed by more than 150 economists in concert with two public policy groups asks the government to provide more cash for individuals in a manner similar to the distribution of $1,200 per person earlier this year.

The letter asks Congress to make payments automatic based on certain economic triggers rather than contingent upon congressional action and presidential approval.

It states, in part: “We urge policymakers to use all the tools at their disposal to avoid further preventable harm to people and the economy, including​​ recurring direct stimulus payments, lasting until the economy recovers. The widespread uncertainty created by the COVID-19 pandemic and recession calls for a multifaceted response​​ that includes automatic, ongoing programs and policies including more direct cash payments to families; extended and enhanced unemployment benefits; substantial aid to state and local governments; stronger SNAP benefits; robust child care funding and more.” SNAP is a federal program designed to ensure low-income people have sufficient quality food.

The economists argue that direct cash payments are important because of the level of suffering among jobless workers and their families. Stimulus payments, the authors write, can instantly help the economy.

“We agree with economists from ​across​ the ​political spectrum​ that concerns about debt and deficit should not get in the way​ of taking appropriately strong measures to stem the downturn now,” the letter says. “Regular, lasting direct stimulus payments will boost consumer spending, driving the economic recovery and shortening the recession.” ​

The authors add, “Continuing recurring payments until there is reliable evidence of an economic recovery — such as low and declining unemployment — will promote certainty for all sectors of the economy and for state and local governments and federal agencies.”

Congress is on recess but will return before some current COVID-19 response programs expire July 31.

The economists’ letter, which calls for action before then, was arranged by the Economic Security Project and The Justice Collaborative.

The list of signers includes economists from the Clinton and Obama administrations and Indivar Dutta-Gupta, co-executive director at Georgetown Center on Poverty and Inequality. A New York Times report on the letter noted the list of signers includes some advisors to presidential candidate Joe Biden.

The Federal Reserve Bank of Atlanta also suggested this week that the economy may need more direct federal infusions of cash due to COVID-19, as a surge in cases could stall the economic recovery.

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