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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And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

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