Matt Egan of CNN wrote:The federal government didn't act aggressively enough in 2009 to fight the Great Recession. And the economic recovery was weaker as a result.
Joe Biden, as former President Obama's vice president, learned that painful lesson firsthand. That's why Biden is taking a go-big, or go-home approach now that he's inheriting a fragile economy and the worst pandemic in a century.
Biden's $1.9 trillion American Rescue Plan shows that he's determined to avoid repeating the mistakes of the Great Recession -- if Congress lets him.
"If we look back and think this plan was too big, that would be a regret that would be fine to live with," Jason Furman, one of the architects of the 2009 stimulus plan, told CNN Business.
Furman, a former top economic aide to Obama, recalled that the team wanted a $1 trillion stimulus package in 2009 -- or roughly 25% bigger than the record-setting legislation that ultimately got through Congress.
"The recovery was slower from the financial crisis because the stimulus wasn't bigger," said Furman, who served as one of Obama's top economic advisers.
By contrast, economists say the Biden plan should help the US economy ride out the next six months or so of the pandemic, which has killed more than 400,000 Americans.
Matt Egan of CNN wrote:The $1.9 trillion plan includes $1,400 stimulus checks, a $15 federal minimum wage, $350 billion in state and local aid, enhanced unemployment benefits, help for the hungry and $25 billion in rental assistance.
The goal would be to help Americans in need, especially those whose livelihoods are linked to industries crushed by the pandemic like restaurants, hotels, airlines and cruise lines. The United States lost jobs in December for the first time since the spring. The nation is still down 10 million jobs during the pandemic.
Crucially, Biden is proposing spending big, for the first time during this pandemic, on the health crisis itself. His plan calls for $400 billion to keep schools open, speed up vaccinations and improve testing.
"One of the lessons of 2009 was that the argument that you could start modestly and then keep adding if the economy did not improve ran into a political reality," Austan Goolsbee, a former Obama economic adviser, told CNN Business. "President-elect Biden was there. You can already see they're not going to repeat that scenario."
If enacted -- and that's a huge if -- the US economy would grow by a sizzling 8% in 2021 and the job market would return to nearly full employment by the fall of 2022, according to projections by Mark Zandi, chief economists at Moody's Analytics.
However, Biden's stimulus plan will face opposition in Congress. Zandi expects Biden's American Rescue Plan will get whittled down to just $750 billion. That in turn would leave US GDP growth at about 5%.
Goldman Sachs is a bit more optimistic. After Biden released his plan, the Wall Street bank raised its estimate of fiscal relief from $750 billion to $1.1 trillion. And Goldman Sachs now expects US GDP growth of 6.6% this year, up from 5.9% before Democrats took control of the US Senate.
https://www.cnn.com/2021/01/20/economy/ ... index.html