Wednesday, June 19, 2024

Economist: Going back to work will lead economy forward, not another stimulus check

by BIZ Magazine

By Sarah Downey | The Center Square

Stimulus checks for Americans at the onset of the COVID-19 pandemic made sense, but a potential second round could prevent some recipients from working and prolong fiscal recovery, an economist says.

“Ultimately what we’re for is people going back to work,” Vance Ginn, chief economist at the Texas Public Policy Foundation (TPPF), told The Center Square. “We need to find a responsible way to end the shutdowns, and find ways for people to get back to work, instead of having incentives to not go back.”

Another stimulus check for individuals and families has been discussed as part of the next phase of federal coronavirus relief.

“There may have been good reason for stimulus checks during the major part of the pandemic outbreak, but we think that time is over now,” Ginn said. “The stimulus check payment was put in place when many people were forced out of work, but now we’re looking at how to get people back to work and having businesses open.”

There are other ways to help people pay their bills and expenses, said Ginn, who formerly served as associate director for Economic Policy in the Office of Management and Budget at the White House.

The $600 weekly unemployment benefit that Congress included in the CARES (Coronavirus Aid, Relief, and Economic Security) Act expires at the end of July, but people can still get state unemployment, which usually pays about 50 percent of what their weekly income was, Ginn said.

As short-term federal programs from the pandemic’s onset wind down, other proposals are under consideration to help businesses.

One is the Workplace Recovery Act, which addresses operational losses incurred during the government shutdowns.

“It would focus on replenishing net operating losses for businesses so they can stay in business,” Ginn said.

A payroll tax cut for employers and employees through the end of the year also would put more money in the pockets of workers, and incentivize businesses to grow because they would have lower costs and do more hiring, Ginn said.

Another key component to economic recovery is quelling fear.

“We need to deal with the pandemic situation in its full context,” Ginn said, “We don’t need to resort to lockdowns and closing society again because it would have a devastating effect on our lives and livelihoods.”

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