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Ben Bernanke announced his plan to save the US economy

Summary

Former Fed Chair Ben Bernanke weighs in on the economic response to COVID-19 Description video: On Tuesday, April 7, Brookings hosted an online discussion with former Federal Reserve Chair Ben Bernanke, now at the Hutchins Center at Brookings, on the […]

Former Fed Chair Ben Bernanke weighs in on the economic response to COVID-19

Description video:
On Tuesday, April 7, Brookings hosted an online discussion with former Federal Reserve Chair Ben Bernanke, now at the Hutchins Center at Brookings, on the economic effects of the coronavirus pandemic, how governments have responded so far, and what further options are available to soften the blow and help speed an economic recovery.\n\nhttps://www.brookings.edu/events/webinar-former-fed-chair-ben-bernanke-weighs-in-on-the-economic-response-to-covid-19/ (transcript available)\n\nSubscribe! http://www.youtube.com/subscription_center?add_user=BrookingsInstitution\r\n\r\nFollow Brookings on social media!\r\nFacebook: http://www.Facebook.com/Brookings\r\nTwitter: http://www.twitter.com/BrookingsInst\r\nInstagram: http://www.Instagram.com/brookingsinst\r\nLinkedIn: http://www.linkedin.com/com/company/the-brookings-institution

Ben Bernanke announced his plan to save the US economy

The most important thing Congress can do to improve the American economy is to help states and local governments, says economist Ben Bernanke..

He stated that the lack of sufficient support from state and local governments was the biggest mistake made during the Great Recession. Economist fears Congress could repeat this mistake. 

«State governments play a key role as providers of essential services. They are responsible for health, safety, education, public transport, and also for major employers.», – writes Ben Bernanke.

He said that with the drop in revenue from the percentage of sales and income taxes during the pandemic, many states faced huge budget deficits. This could force the authorities to significantly reduce the provision of basic services, provoking a decline in jobs..

Bernanke argues that the stimulus package adopted in early 2009 to help the economy recover from the Great Recession was partially undermined by the loss of jobs in state and local governments..

Ben Bernanke announced his plan to save the US economy

«Today, the sharp decline in tax revenues as the economy slows down restricts states to balanced budget requirements.», – he notes. 

Democrats in Congress are pushing for a package that will ensure $ 1 trillion federal aid states and local governments. Republican leadership in Congress has not yet approved such a package.

Recall that Ben Bernanke is a Republican, former chief economic adviser to the president George W. Bush and former head of the Fed.