[NJFAC] Automatic stabilizers could help workers and economy in a crisis

The Extremely Boring Idea That Could Save the Economy They're called automatic stabilizers Jordan Weissman, Slate, July 31, 2020

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The United States has a number of automatic stabilizers in action already, though we don't always think of them as such. Safety-net programs like food stamps and unemployment insurance, for instance, fit the bill. They are designed primarily to help Americans in times of need, but as a result they also add ballast to the wider economy at moments of crisis by boosting household spending power and aggregate demand.

But Recession Ready's contributors wanted to take the concept much further. The government could redesign unemployment benefits and food stamps to increase in value when unemployment spikes. Washington could send households cash, deliver more aid to states, and increase infrastructure spending during periods of weakness—all automatically. In many ways, the book reflected the lessons and scars of the Obama era, when the White House spent years battling recalcitrant Republicans on Capitol Hill for more fiscal stimulus while the economy languished. And rather than praying for responsible leaders in Congress to save the day through white-knuckle, down-to-the-wire negotiations, it argued, you could set up the better part of a recession-fighting machine ahead of time, allowing it to run on autopilot whenever the need arose.

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Programs also tend to work better if they are in advance and tested, instead of thrown together on the fly while the world is burning. Had Congress decided ahead of time that it wanted to let freelancers get unemployment benefits, or try to pay people their full wages after losing a job, or send out checks to nearly every American at a moment's notice the next time the economy crumbled, we might have had good systems in place to do them. Instead, we've run into all manner of administrative and logistical headaches, from laid off workers waiting months for their benefits to the Treasury sending out prepaid debit cards that people threw away because they looked like junk mail.....

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June Zaccone
National Jobs for All Coalition
http://www.njfac.org

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