I encourage you to read the Council for Economic Development’s open letter to President-elect Biden (PDF). Here’s a snippet:
While it is still too early to understand the long-lasting impact of the COVID-19 pandemic on the future economy, we have learned several important lessons that should serve as the foundation for our fiscal policy response:
- Federal stimulus is needed for recovery, and the level and composition of that stimulus is of enormous consequence to the pace and direction of the economy;
- The pandemic’s continued spread will stall or slow the economic recovery, and burden especially low-income workers and communities of color;
- The pace of the labor market recovery is generally slowing and employment could take several years to recover;
- The pandemic is devastating to small business, the US economy’s growth engine.
- The post-pandemic labor force will be smaller, and the supply of productive capital will be reduced;
- An economically rejuvenated China will further challenge US interests and US-China trade policy;
- The US debt burden is growing exponentially;
- We will not return to the economy of January 2020; for example, many businesses are predicting more workers will continue to work remotely, and our society—our work and home lives—will be much more integrated with technology.
They have a significant number of recommendations, varying from sound to fantastical. If you’re not familiar with the CED, it’s quite a venerable organization, founded in 1942 and associated with the transition from a peace-time economy to a war economy and then back again at the conclusion of World War II. It’s had quite a few notables connected with it over the years.
I think I’d state my operating principles a bit differently than the CED has. For example, while I think that relief is necessary, stimulus is nonsensical as long as state and local officials are shutting down their jurisdictions, ostensibly to slow the spread of COVID-19.
I also think that educating the neediest kids for whom in-person education is most useful is a high enough priority that it is deserving of a certain level of risk and cannot be put off forever. Anyone in child development will tell you that there are certain skills which if not acquired early enough will never actually be acquired at all.
I would ask them one question. Which of the items on their wish list are actually within the province of the federal government and which are matters for state and local governments? If you don’t think state and local governments will push back on an overreaching federal government, you haven’t been paying attention.
