On the latest Facing the Future, I was joined by Concord Coalition Executive Director Robert L. Bixby, Policy Director Tori Gorman, Senior Policy Advisor Josh Gordon and Economist Mom and Director of Outreach & Senior Advisor at the Penn Wharton Budget Model Diane Lim. We discussed recent Congressional relief packages, what additional aid might be coming and the economic impact of the Coronavirus pandemic.
[Note: In light of current circumstances, The Concord Coalition will begin posting additional online content. A portion of this week's Facing the Future can be seen in the video clip posted below.]
“We are in the midst of an unprecedented health crisis, where in order to save hundreds of thousands of lives, large sectors of our economy have essentially been placed in a self-induced coma,” Gorman said.
“Economists expect second quarter GDP growth to decline anywhere between 25 and 30 percent,” she added. “In light of the current public health crisis, I think it’s appropriate that the government run big deficits if the government is going to tell businesses to shutdown, stay home to save lives.”
Lim said, “What’s different about this downturn is that I feel it’s not likely that a lot of economic productive capacity is going to get permanently dismantled and destroyed … it’s sort of a pause, rather than a traditional economic downturn.”
But she still expects there to be a permanent effect on the long-term economy.
“Because of the addition to debt and the 'pause' … we will be permanently behind where we otherwise would have been without this episode, regardless of how fast we recover from it,” Lim said.
Gordon said, “I’m pretty concerned that Congress is not going to put the pedal to the medal right now.”
“Everything that follows depends on how quickly we can control the spread of the virus … without a doubt the most important thing is to give states, hospitals, doctors, all of the professionals, as much as they possibly need to control this,” Gordon added.
He said elected leaders quickly passed appropriately large relief packages, but they could have done more, especially relative to how other nation’s have responded. “Our Congress still left a lot out there to be done,” he said. “The best thing we can do, both for the economy and for the long term, is to make this a short term problem.”
With regard to the broader fiscal policy discussion, Bixby said “it’s a whole new world; it’s not any sort of logical development from what existed before.”
“We had a preexisting condition in the budget of an unsustainable structural gap between revenues and spending … now it’s like somebody came along and changed the scene entirely,” he added. “We’re in very uncharted territory … we were talking about trillion-dollar deficits for as far as the eye can see; you’re going to be talking about much higher figures.”
“We have to do what we have to do right now,” Bixby said. “But it means that we’re going to have to pay for any new stuff that we have, and still figure out how to pay for the stuff that was already on the table that we hadn’t paid for.”
He emphasized that such a conversation can wait until “we’re all not wearing blue gloves,” but it is a conversation that we are eventually going to have to have.
Gorman also shared the details of the three relief packages that Congress recently passed and provided insight as to what future aid packages could be on the horizon. You can read more of Concord’s coverage of Congress’ response to the pandemic, here.
Hear more on Facing the Future. I host the program each week on WKXL, NHTalkRadio.com (N.H.), and it is also available via podcast. Join me and my guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, iTunes, Google Play Music or with an RSS feed. And follow Facing the Future on Facebook.