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A Lasting Remedy for the Covid-19 Pandemic's Economic Crisis by Joseph E. Stiglitz
The Covid-19 pandemic has led to an unprecedented global health and economic crisis, with unprecedented government responses. With the deficit-to-GDP ratio already at 5 percent before the pandemic, a record for the US in peacetime with near full employment, that deficit has now already tripled, to at least 15 percent—and negotiations are underway for a fourth package that would send it still higher. This is all well and good: when you go to war, you don’t ask, “Can we afford it?” And we are at war with this terrible virus. But that doesn’t mean that resources aren’t scarce. We must think carefully about priorities, about how to spend money well so that we are in a position to emerge from the pandemic quickly, with the kind of twenty-first century economy we would like to have.
The aid packages that Congress has passed have—after a lot of haggling—reflected reasonably well what our priorities should be: first, contain the pandemic; second, help the most vulnerable; and third, set the stage for a strong recovery. But there are still some big gaps. We don’t want sick and contagious people going to work, and that means we have to have paid sick leave. Congress recognized this but, at the behest of large companies, exempted 80 percent of all workers—all those working at firms with over five hundred employees or under fifty! That is unconscionable.
Similarly, we don’t want undocumented workers going to work, or not getting treated, for fear of deportation. The Trump administration recognized this, putting ICE actions on hold, but no commitment was made not to use information gathered from treatment for future deportations. We recognized that hospitals were in desperate need for funds, but states have had to provide health care with the pittance they’ve received from the federal government—not enough even to cover the additional costs imposed by the pandemic, let alone to deal with plummeting revenues. Because states have constitutionally mandated balanced budgets, unless there is help from the federal government, there will be cutbacks in health, education, and basic welfare services—imperiling the most vulnerable and diminishing prospects of a strong recovery.
There are other gaps in protecting those most in need, some which have only become clear after the legislation’s passage. With so many Americans living paycheck to paycheck—with less than $500 in their bank accounts—it is imperative that money gets to them quickly. The president promised “two weeks.” It took two weeks to pass the legislation, and now the US Treasury Department says it will be another three weeks for those who filed tax returns this or last year. But for those who didn’t—and these include the poorest Americans, because their income was so low that they didn’t have to pay taxes—it now looks like it may be months. Other countries, such as Argentina, have been able to get money to their citizens in three days. The deficiencies in our system of social protection have become starkly evident.
The aid packages that Congress has passed have—after a lot of haggling—reflected reasonably well what our priorities should be: first, contain the pandemic; second, help the most vulnerable; and third, set the stage for a strong recovery. But there are still some big gaps. We don’t want sick and contagious people going to work, and that means we have to have paid sick leave. Congress recognized this but, at the behest of large companies, exempted 80 percent of all workers—all those working at firms with over five hundred employees or under fifty! That is unconscionable.
Similarly, we don’t want undocumented workers going to work, or not getting treated, for fear of deportation. The Trump administration recognized this, putting ICE actions on hold, but no commitment was made not to use information gathered from treatment for future deportations. We recognized that hospitals were in desperate need for funds, but states have had to provide health care with the pittance they’ve received from the federal government—not enough even to cover the additional costs imposed by the pandemic, let alone to deal with plummeting revenues. Because states have constitutionally mandated balanced budgets, unless there is help from the federal government, there will be cutbacks in health, education, and basic welfare services—imperiling the most vulnerable and diminishing prospects of a strong recovery.
There are other gaps in protecting those most in need, some which have only become clear after the legislation’s passage. With so many Americans living paycheck to paycheck—with less than $500 in their bank accounts—it is imperative that money gets to them quickly. The president promised “two weeks.” It took two weeks to pass the legislation, and now the US Treasury Department says it will be another three weeks for those who filed tax returns this or last year. But for those who didn’t—and these include the poorest Americans, because their income was so low that they didn’t have to pay taxes—it now looks like it may be months. Other countries, such as Argentina, have been able to get money to their citizens in three days. The deficiencies in our system of social protection have become starkly evident.
More:
https://www.nybooks.com/daily/2020/04/08/a-lasting-remedy-for-the-covid-19-pandemics-economic-crisis/
