A former adviser to President Barack Obama urged Congress to provide a rescue package that would give every adult $1,000 amid the coronavirus outbreak.
Jason Furman, who served as the chair of the Council of Economic Advisers during the 2008 financial crisis, told NBC News that after exhausting all other options, giving people a one-time check for $1,000 and every child $500 is the best approach to the economy and ensuring the health of citizens.
“You should spend as much as you can on health, on testing, on hospital infrastructure. You should spend as much as you can in a targeted way on things like unemployment insurance, nutritional assistance, paid leave, and help for states,” he said.
“Once you’ve gone through all of that, you’ve maxed out on health and maxed out on targeted assistance, you have two problems: One is millions, or tens of millions, of households are going to be hurting from lower incomes, lost jobs, or time off work. Second, just from a macroeconomic perspective, the amount of stimulus you want for the economy under that scenario is still smaller than what you need. The only way to reach everyone you need and get to the size you need is with some broad-based tax transfer,” the Harvard professor said.
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Furman told Vox in a prior interview that last week’s plunge into a bear market “feels much worse than 2008.”
“At this point, this feels much worse than 2008. Lehman Brothers was quite bad, but it was the culmination of a sequence of things that had happened over 14 months,” Furman said. “This hit all at once.”
The former Obama economic adviser said the recession of 2008 was gradual, contrasting to the recent drop.
“I was in a restaurant yesterday, possibly for the last time for a while. I was in a taxi, possibly the last time for a while. There are entire industries I interact with where I’m realizing: ‘This may be the last time I’m paying you for a while,’” Furman said. “That didn’t happen in 2008.”
U.S. stocks plunged Monday morning, with the S&P 500 falling more than 7%, which triggered a halt in trading at the New York Stock Exchange, and the Dow Jones Industrial Average dropped more than 2,200 points.
