Federal Reserve Presidents Call For Big Stimulus

Written by SK Ashby

Right now it's not clear if Senate Republicans will vote on a stimulus bill of some description this week or if they will even cancel their upcoming recess, but the presidents of several Federal Reserve banks are urging them to.

Calling what's about to happen "traumatic," they say we need stimulus to prevent even worse things from happening.

“The ball is in Congress’ court,” Chicago Fed President Charles Evans told reporters on a call. “Fiscal policy is fundamental to a better baseline outlook, to a stronger recovery and getting the unemployment rate down, people back to work safely, and ultimately reopening the schools safely.”

Without more government aid, Evans said, “aggregate demand trouble is brewing.” Translated for non-economists: people could stop spending and the bottom could really fall out of the economy.

Or, as Richmond Fed President Thomas Barkin put it, “quickly pulling away the support that consumers and businesses are receiving would be a pretty traumatic move for what’s happening in the economy.”

Don't pull away 'support that consumers are receiving' they say.

In other words: don't cut the pandemic unemployment program from $600 to $200 per week. That's where "aggregate demand" is coming from; it's coming from unemployment, stimulus checks, and government spending. There is no economy without consumption and consumption will cease if people have significantly less money or no money at all.

This is not rocket science or difficult to understand if you have any understanding of economics at all.

Unfortunately, Republicans don't believe in economics.