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Congress is considering a number of measures to deal with COVID-19's effects on the economy, the most novel being direct cash payments to individuals, paid for by deficit spending (at least in the short term). We are talking about amounts in the $1-3 trillion range.
For example, giving 100 million households about $20,000 each (one of the more generous plans) would cost about $2 trillion.
The benefits are obvious - a ton of newly unemployed people, plus those who were just scraping by, would now be relatively secure and able to pay their bills, avoid foreclosure or eviction, eat, etc. Demand that would normally be lost because of high unemployment would be mostly sustained. The idea is to mitigate the kinds of economic (and social) damage that we saw in 2008.
The drawbacks?
For example, giving 100 million households about $20,000 each (one of the more generous plans) would cost about $2 trillion.
The benefits are obvious - a ton of newly unemployed people, plus those who were just scraping by, would now be relatively secure and able to pay their bills, avoid foreclosure or eviction, eat, etc. Demand that would normally be lost because of high unemployment would be mostly sustained. The idea is to mitigate the kinds of economic (and social) damage that we saw in 2008.
The drawbacks?