Building Bridges to Help the Economy Through Covid

Eufemia Didonato

The year is almost gone—and 2020 won’t be missed. The future looks brighter thanks to some truly amazing scientific work, but a thoroughly vaccinated America is probably six to nine months away. To limit the damage while getting from here to there, we need to build two (figurative) bridges: a […]

The year is almost gone—and 2020 won’t be missed. The future looks brighter thanks to some truly amazing scientific work, but a thoroughly vaccinated America is probably six to nine months away. To limit the damage while getting from here to there, we need to build two (figurative) bridges: a public-health bridge and an economic-relief bridge. The two make a natural pair because the economy won’t get back to normal until the pandemic is under control.

President Trump’s grudging signature on a relief bill allows us to start building roughly half of the necessary economic bridge. I say “roughly half” because the $900 billion that Congress appropriated is about 40% of the amount provided in the Cares Act in March. (Should the $600 checks be boosted to $2,000, the bridge will be longer.) The Federal Reserve also unveiled a series of emergency responses to the economic crisis back then. Those timely and effective actions helped get the economy through the third quarter of 2020 in surprisingly good shape.

As the pandemic worsened and the main provisions of the Cares Act started to phase out over the summer, it became clear that we needed another economic relief package. Clear to everyone, that is, except Senate Majority Leader Mitch McConnell and his colleagues. They refused to budge until the virus was raging out of control, the economy was looking a bit shaky, and millions faced eviction at Christmas.

Incredibly, Republicans even tried to hamstring the Fed. What little medicine is left in its cabinet is mostly slow-acting—not the sort of thing that can give the economy a quick boost if needed. There’s one big exception, however: emergency lending. Yet Treasury Secretary

Steven Mnuchin

decided to make that harder, and some Republican senators then tried to make it impossible.

In contrast, Congress has an abundance of fast-acting palliatives at its disposal—such as extended and enhanced unemployment benefits, food stamps and other grants to the needy, measures to stave off evictions and bankruptcies, and simply writing checks. Now that Mr. Trump has spared a minute from his busy golfing schedule to sign the bill, many of these remedies will be continued or restarted.

This matters greatly. The sooner the economy gets back to full employment, the less we’ll need to worry about scarring from the deep recession. With a faster recovery, fewer workers will lose their jobs permanently or see their skills atrophy. Fewer firms will go bankrupt. Fewer state and local governments will see their finances ruined and their public services decimated.

But it’s a gigantic economy, and $900 billion is unlikely to be enough. Fortunately, President-elect

Joe Biden

understands that.

A public-health bridge to the second half of 2021 is also essential. Sadly, its prospects look poor, among other reasons because of the way Mr. Trump and his administration have politicized the response to the pandemic. Yes, marvelous work by brilliant scientists and dedicated medical professionals has produced excellent vaccines far sooner than we had any right to expect. But apart from that phenomenal success, the country has done just about everything wrong in fighting Covid-19—including, most recently, fumbling the vaccine rollout.

And at horrific cost. More than 19 million Americans have now been infected, and about 340,000 have died. These numbers place us among the worst-performing nations on earth. As this is written, the latest data from Johns Hopkins rank the U.S. as eighth worst among 217 countries in Covid cases per capita (nestled between French Polynesia and Bahrain) and 14th worst in deaths per capita (between Bulgaria and Mexico).

Our neighbors to the north put us to shame. Covid illnesses and deaths per million people (so far) are about 60,000 and 1,050 here, but only about 15,000 and 420 in Canada. Had we achieved Canadian numbers, more than 200,000 dead Americans would be alive today. Do Canadians have better genes? No. Just better government.

The much-needed public-health effort requires simple measures like masks, social distancing, testing, tracing—and, perhaps above all, responsible behavior. Yet Mr. Trump and his enablers seem determined to turn these straightforward measures into tests of political will. Mr. Biden will stop promoting that craziness, but not until Jan. 20.

Decades from now, historians will look with wonder at how Republicans disparaged wearing masks and social distancing as infringements on individual liberty. But long before that, millions more Americans will have fallen ill and hundreds of thousands will have died. For them, Jan. 20 will not come soon enough.

Mr. Blinder, a professor of economics and public affairs at Princeton, served as vice chairman of the Federal Reserve, 1994-96.

Potomac Watch: In June Democrats described the coronavirus as “a tremendous opportunity to restructure things to fit our vision.” A Biden administration will continue that theme unless Republicans unite around fiscal discipline. Images: Zuma/AFP Composite: Mark Kelly

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