Can we stimulate the economy after the virus escalates?

Philis Wood, Contributing Reporter

The job market and the overall economy remain under intense pressure from the rapidly accelerating COVID-19 pandemic. Almost routinely now, daily new cases exceed 100,000, with surging numbers reported all around the country.

In addition, there are many clear signs that U.S. businesses remain cautious about the economy’s future as the pandemic worsens. The current pace of hiring simply isn’t enough to help the millions of Americans who were thrown out of work by the pandemic recession.

As a sign of the deep uncertainty hobbling the economy as the virus rages, companies have added more than 100,000 temporary workers. This indicates they are seeing more demand but are still unable to make permanent job offers. The length of the average work week also rose, which means that employers pushed their workers to work longer hours rather than hire new employees.

Federal Reserve Chair Jerome Powell has recently urged Congress to approve another stimulus package, this time one that actually helps small businesses and families. Butthe possibility of a truly effective stimulus has been sidelined by the election, which appears likely to preservea Republican majority in the Senate. That might mean any effective aid for working people will be postponed until next year at least.

The nation still has at least 10.1 million fewer jobs than it did before the pandemic intensified last March. Moreover, businesses will struggle as the weather turns colder. Consumers will likely be reluctant to shop, travel, and congregate in order to avoid contracting the virus.

Millions remain jobless as more layoffs are becoming permanent. Furthermore, the Federal Reserve says that factory output has dropped. Clearly, Joe Biden will inherit a wrecked U.S. economy.

Parents cannot return to work as childcare centers remain closed, many permanently. Restaurants and small businesses have used up cash reserves, with many local employers anxiously expecting each new next week to be their last. According to an industry survey, one in six restaurants was already closed in September.

Biden will also face an American population with opposed financial prospects, insofar as wealthy families have been weathering the pandemic well, while low income families face increasingly dire circumstances.

It’s unclear whether Biden’s victory was enough to tip the balance of power in the Senate to Democrats and create the possibility of effective stimulus package. The longer that aid to workers is delayed, the greater the lasting damage to the economy will be. Gregory Dacoan economist for the consultancy Oxford Economics—has recently said that “The risk is that the recovery goes into reverse.” said. All of this could make the difference between an ineffective presidency and a successful one.

Many voters in households earning less than $50,000 annually have reluctantly admitted that they’re drowning financially. Their misfortune is in sharp contrast to what’soccurring those with annual incomes above $100,000. Higher-earners are not only not struggling, but many have revealed that their finances have actually been improving.

This is the kind of recovery economists have feared.Amanda Fischer, policy director at the Washington Center for Equitable Growtha neoliberal think tanksaid “It’s the K-shaped recovery—we see a divide between the wealthiest and everyone else.

The economy was hurting even as ballots were cast. Retail sales dropped at least 0.8% since the start of 2020, thanks largely to a steep drop-off in business for restaurants, as well as clothing and furniture shops. But it gets worse: “Employment is down in almost all industries,” said Jed Kolko, chief economist at the job posting firm Indeed.

The nation’s top public health officials are warning that the virus is escalating and are beseeching Americans to maintain social distance, wear masks, and avoid large groups. It is likely that the worsening pandemic will force even more businesses to close permanently.

Control of the Senate will certainly determine how much additional aid gets approved. It is likely that Republican control will mean a stimulus package of under $1 trillion. However, a Senate Democratic majority would probably mean somewhere between $2.5 trillion to $3 trillion.

Federal Reserve Chairman Jerome Powell said at a Thursday news conference that economic recovery depends on approving more aid: “We’ll have a stronger recovery if we can just get at least some more fiscal support.

The challenge involves not just the amount of the aid package, but whether it helps state and local governments that have lost tax revenues, and also whether it is passedpromptly enough to help workers rather than high-income individuals.

The working class will certainly suffer the most as a resultof a Senate stalemate. We can only hope that our representatives in the Senate—on both sides of the aisle—will remember the economic reforms carried out by the administration of President Franklin Delano Roosevelt. From 1933 until his death in 1945, FDR’s economic programs brought relief for the poor and the unemployed, recovery of the US economy back to pre-depression levels and reform of the entire financial system in order to prevent another depression in the future. The New Deal restored confidence in the economy, and allowed Americans to return to work. It created a regulatory framework that—for over four decades—would protect the interests of all Americans. In fact, this regulatory framework successfully protected the US against a financial crisis until it was dismantled in the 1980s by the Reagan administration