DAVE ROSS

Ross: V-shaped recovery could be possible with bailout

Aug 17, 2020, 7:12 AM | Updated: Aug 18, 2020, 5:50 am

Everybody wants that “V”-shaped recovery – the quick snapback that the President keeps talking about. But as I was watching a conference call with a group of economists Friday, I heard one of them say this:

“Well, I think we just went off the fiscal cliff. We’re in free fall.”

That is Mark Zandi, Chief Economist for . He says that because Congress has refused to bail out state budgets, and state and local governments will have to lay off another two million teachers, police, and firefighters over the next year.

And that will snuff out any “V”-shaped recovery. Because those people buy stuff that supports a lot of small businesses.

Harvard Economist Jason Furman was also on the call – he says we made the very same mistake during the last recession:

“My estimates are just the state and local spending austerity by itself delayed recovery back three to four years later, just by … abnormally low state and local government spending.”

But the good news is – economists like Furman and Zandi are saying there’s a vaccine for that. It’s tested; it’s ready to go – it’s a single dose of $500 billion sent to state and local governments ASAP.

“I think every day we wait is another day we’re locking in a slower and more painful recovery … and it’s well past time.”

So there we are. Plus, flu season’s coming! Happy Monday.

Listen to Seattle’s Morning News weekday mornings from 5 – 9 a.m. on Xվ Radio, 97.3 FM. Subscribe to the podcast here.

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