CBO Forecast Suggests Need For More Huge Stimulus Bills

The Congressional Budget Office has produced a forecast of economic growth that takes the COVID-19 pandemic into account:

By the end of 2021, rapid growth means we’re about 1.5 percent below the level we’d be at without the pandemic. Obviously that’s not great, but it’s not too bad either. So how long does it take to make up the rest of the difference?

We don’t get back fully to normal until 2029. (Note that this chart is in dollars. $300 billion is equal to 1.5 percent of GDP.)

Now, the economists at the CBO are good, but there are plenty of other good economists out there too. What’s more, this is an unusually hard forecast to do. This one shouldn’t be taken as gospel unless it gets widely confirmed. It’s also worth noting that this forecast assumes COVID-19 is on the wane and the economy will steadily open up throughout the year. This is, obviously, far from a certainty.

All that said, if you believe a forecast like this then it’s pretty obvious how to respond: with a lot more spending. There’s not a whole lot left that monetary policy can do, and there’s no reason we should have to wait until 2029 for full recovery.

Job 1, as always, is to get the virus under control, since there will be no recovery at all without that. Job 2 is another big spending bill this year and probably yet another one next year. We can argue about what to spend the money on (aid to states, aid to small businesses, infrastructure, etc.), but there shouldn’t be much argument that it needs to done. This is no time to start clutching our pearls over the deficit.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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