US Economy Recovery in Jeopardy Without Additional Government Support

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The recovery of the US economy after the impact of the corona pandemic will be in jeopardy if additional government aid is not provided quickly.

 

The chairman of the American umbrella organization of central banks, Jerome Powell, warned about this. According to him, the motto should be to make too much rather than too little resources available for economic support.

“Too little support leads to weak recovery, which creates unnecessary difficulties for households and businesses,” Powell said in a speech to the National Association for Business Economics, an international organization for applied economics.

“On the other hand, the risks of too much support seem, for the time being, much smaller. Even if the support measures eventually turn out to be more extensive than was necessary, it is still not wasted.”

The president of the Federal Reserve thus looks more like the Democrats than the Republicans in the US Congress. The two sides have been unable to agree on a new bailout package for months, to complement the roughly $ 3 trillion in fiscal aid that has already been approved.

Republicans see nothing in a Democratic proposal for $ 2.2 trillion in support, partly because they think the package is too big. Many aid measures for, for example, unemployed Americans expired in August.

In his speech, Powell made no explicit reference to the views of Democrats and Republicans. He did point out, however, that the recovery from the corona crisis will be more substantial if government economic stimulus measures keep pace with those of central banks.

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