Biden package concerns:
A research team including: Raj Chetty of Harvard, best known for pioneering research on the slowing ability of the poor to move into the American middle class, has suggested lowering the income limit on $1,400 “stimulus” checks from $75,000 might make sense, because those who earn more, will not spend the money soon enough to help the economy now.
Jason Furman, who was chairman Obama’s Council of Economic Advisershas recommended scaling back Biden’s proposed additional $400 in weekly unemployment insurance over time so that people will be motivated to find a job as vaccine rollouts make it safer to work.
“There is a risk that people will take too long to find a job, being too optimistic and becoming unemployed for a long time.
This risk was insignificant compared to the need to support people in 2020, by this fall it will be more real,” he wrote.
In his Friday debate with Summers, Krugman acknowledged that stimulus had a weaker economic justification than other aid, such as unemployment insurance, but said: “They are also the most popular. That’s part of making policy.”
It’s not clear whether the debate will affect the outcome of a bill that may be left intact by a Congress controlled by Democrats.
“It’s going to work with Kamala Harris’s voice,” Krugman said. “And then we’ll see” in the coming months who was right.