This week on Facing the Future, we got an update on the economic recovery from Joe Minarik, Senior Vice President and Director of Research at the Committee for Economic Development of The Conference Board. We also heard about an idea he has for paying off the extra federal debt incurred as a result of the COVID-19 pandemic. Concord Coalition Policy Director Tori Gorman joined the conversation.
“We’re trying to figure out what the heck is going on around us,” Minarik said.
He explained that the pandemic had an uneven effect on different parts of the economy with some sectors suffering deeply while others emerged relatively unscathed.
“We had this pandemic which prevented people from being in proximity with one another. So you have some kinds of economic activity that do not involve physical activity and you have other kinds of economic activity that don’t. The kinds of things that do require people to get together are leisure, hospitality, dining out and travel. So you had particular industries that were just absolutely knocked on their backs.”
“Meanwhile,” he said, “you had the Federal Reserve pumping liquidity into the economy, which meant that the financial markets were quite buoyant. They did extremely well, and so people who were still at work, people who had accumulated considerable wealth, were all doing quite well while a relatively larger number of low-paid workers were flat on their figurative economic backs.”
“What we’re hoping for now is continued public health, the formation of new businesses to take the place of the ones that are closed down, providing employment opportunities for the people who lost their jobs in the pandemic and who are waiting for jobs in that same service industry because they don’t have skills that are immediately applicable to other lines of work. All of that, unfortunately, is going to take some time.”
In the meantime, Minarik said that the federal government could take a first step toward tackling the nation’s overall debt, which might seem overwhelmingly large, by focusing first on a plan to retire the pandemic debt.
Minarik's plan would segregate the COVID-related debt, roll it over as 40- or 50-year bonds, and pay interest on those bonds from a newly created dedicated revenue source that would automatically expire when the COVID debt is retired.
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, Pandora, iTunes, Google Podcasts, Stitcher or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.