Automatic Stabilizers
The nonpartisan Congressional Budget Office’s analysis of the macroeconomic impacts of the Enhanced Unemployment Insurance (EUI) provisions of the CARES Act is deeply flawed.
The federal government should provide support to state governments during economic downturns in the form of block stabilization grants that serve to replace lost tax revenue.
Sharp changes to unemployment insurance systems are needed to stabilize the American economy, incentivize compliance with public health guidance, and keep American families financially secure.
The impact of COVID-19 is likely to be sizable. Regardless of the precise composition of the shock to supply and demand, further macroeconomic policy action is now necessary.
