- Nobel prize-winning economist Paul Krugman told CNBC on Thursday that the US still needs several hundred billion dollars a month to repair the economy as coronavirus cases continue to surge.
- “We’re still 11 million jobs down from where we were before this thing hit and all of those people are without wages, state local governments are in extreme financial distress, thousands of businesses … are on the verge of collapse,” Krugman said.
- Congress has been unable to reach a deal for additional pandemic relief since August, but Senate Majority Leader Mitch McConnell said on Wednesday a second stimulus should be passed before years end.
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Nobel prize-winning economist Paul Krugman told CNBC on Thursday that the United States still needs several hundred billion dollars a month in economic stimulus to repair the economy as the coronavirus continues to spread and stifle job and business growth.
“We’re still 11 million jobs down from where we were before this thing hit and all of those people are without wages, state local governments are in extreme financial distress, thousands of businesses — maybe hundreds of thousands — are on the verge of collapse,” he said.
Krugman said it’s difficult to pinpoint the exact price of the ideal relief package, but said that a “really, really big,” one is needed to keep the US afloat: “We really are still very much in the disaster relief stage.”
Last week, 751,000 Americans filed for unemployment benefits, a decline from the week before, but much higher than economists’ expectations.
Benefits from the first fiscal stimulus package that totaled $2 trillion are ending or have already expired, and Congress has been unable to reach a deal for an additional relief bill. Senate Majority Leader Mitch McConnell said on Wednesday that a coronavirus relief package should be passed before the end of 2020.
In late October, Democrats blocked a smaller, $500 billion relief bill from Republicans, blasting it as inadequate to address the economic crisis. The bill would have implemented a $300 federal unemployment benefit through the end of December, provided more forgivable federal loans to small businesses, and provided $105 billion to help schools reopen. It omitted aid to states as well as $1,200 direct payments to taxpayers.
Krugman said enhanced unemployment benefits have been the “most important policy,” but he doubted that McConnell would extend the benefits in any subsequent bill.
“That was far more effective than anything else in the package, but we’ve seen very, very little … on the part of Senate Republicans to resume enhanced employment benefits,” he said.
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