tv Washington Journal Shai Akabas CSPAN April 13, 2020 12:22pm-1:07pm EDT
mitigate the problem. that has to be our primary focus. it will be the most important determinant and how the economic fallout ends. host: what is your sense of how the legislation passed so far by congress and what might be ahead in terms of the money available will help mitigate some of these job losses and help extend unemployment benefits for these people and help balance, or at least stabilize, the economy? guest: that has been critical. they passed the $2.2 trillion package with phase three, and that is basically unprecedented in scale. they set up several new programs at the treasury department, federal reserve, unemployment insurance program major expansion, and what we need to realize is this is the relief phase. we are not in the stimulus phase yet. we are in a situation where the
government is proactively telling people not to go to work , we can't give people the incentives and the aligned job skills to try to reenter the workforce. that would happen in a later phase. right now, we are just trying to help families and households make ends meet so there is not as much financial suffering in the economy. we need to think about this into different phases. right now we are in the relief phase and then we will start opening things up and what kinds of incentives will be needed to get the workforce back to its formal self. phase, whats relief is your sense and how much bigger the number can go in terms of the jobless numbers? guest: the real answer will depend on how long the public health crisis is drawn out. if we don't go back to work on a broad basis for several more months, it is clear there will need to be an additional large package.
i don't know if it will be the same as the prior one, but we have seen the small business loan program helping small businesses keep their employees originallyoll, they put $350 million into it. because the demand is so high, there are so many small businesses looking to take advantage of this, we will need to increase the size of the lending capacity within the next couple of weeks. that is just one program. there will be other programs, like the direct check economic impact payments that is wired to people's bank accounts in the amount of $1200 and $500. those will not be useful in terms of the amount after one month or two. we need to make sure people don't fall into economic distress during the time they are forced to social distance. host: shai akabas is the director of economic policy at
the bipartisan policy center. four the eastern and central time zones, the mountain and pacific time zones, (202) 748-8001. why thebas, tell us feds' action so far had been unprecedented in responding to the pandemic. guest: they have been unprecedented because of the nature of this crisis. we are telling people that they cannot go to work, many normal functions of the economy and financial markets are just not working as they normally do. what the federal reserve is primarily doing is injecting some sort of liquidity into these markets to make sure there are buyers and sellers for these trains, whether it is things like mortgage-backed security in the housing market, to make sure there is liquid be there for large and small businesses, over
night credit market that helps ofilitate transactions, all those things are capacities that they have had to stand up to make sure the fundamental functions of the economy don't break down when there is a reluctance by a lot of investors to invest right now in risky assets. the rate on the u.s. government interest has almost never been lower. flight forng a safety, and there is a hole left in a lot of markets. host: we had a caller who was very critical of the fed and was concerned they would be lending actors, as head said, from the 2008 financial crisis. parasitic actors was his term. some companies he was concerned about was cruise lines. how will there be oversight
about who gets those funds from the fed? guest: the oversight is critical and there are a couple different components they have set up. there is treasury department also aht, there is commission of sorts that will be overseeing it, and then there are congressional committees whose job is to oversee these other functions of government. the important point to come back to when comparing it to the 2008 financial crisis is then we had a moral hazard problem. there were actors the took risks and those risks did not pan out well. there was a reason why actors in the federal government should have been reluctant to bailout because they were taking those risks and they went bad. just bailing them out incentivizes them to do the same thing again. here, we have a different situation. this is a pandemic, nobody could
have seen this coming, and it is impacting businesses in unforeseen things. the social distancing that is apsley necessary is adversely affecting businesses. to make sure we don't hurt them in this situation just because we are imposing policy on them, there is a need for the federal government to act. it does not mean it should be andmited, but these sectors these entities will need help because the policies we are implementing are actively harming them. host: let's hear from dave in california. you are on with shai akabas. go ahead. caller: good morning. all we are doing with this social distancing and the precautions we are taking is extending the length of time it will take for this epidemic to run its course. i understand why we are doing that, it is to keep our health care system from being overwhelmed.
the longer we allow this epidemic to go, the more damage it does to our economy and our future, actually. wonder, since only a small percentage of people get infected with this virus become seriously ill, half the people don't even show symptoms. would it not have been better to simply isolate the most vulnerable members of our society, the elderly, the people with underlying health conditions, and just allow the virus -- the epidemic to run its course among the rest of the population? the sooner that happens, the sooner we would reach immunity, were enough people would have been infected and recovered. at that point, all of us would be protected, including the most vulnerable, and we would not have done so much damage to our economy and our future.
the longer this goes, the more damage we are doing to our economy and the longer it will take for people to get back to work. host: shai akabas. guest: the caller makes an interesting point, and i am certainly not a public health specialist, but i think there is a concern about taking that approach. hard to all, it is define who this virus will impact and who it will not. negative cohorts were impacts on certain population, it is not like we can just take a small sliver and put them in a quarantine safe space and have everyone else continue to function as well. the second element is there is a concern where if there is general fear of what will work, going to the shopping mall, go to the sports event, could mean for your personal health, you will be reluctant to go.
i think we would have seen a withoutdemand, even these government policies that are forcing people to socially isolate. that is one of my biggest concerns. i think public policy will have to take a close look at. unless we have a vaccine, there will be a lingering reluctance from a lot of people to participate in the type of economic activity they did before the crisis. host: let's go to richard in missouri. good morning. caller: good morning. , let the gentleman thing run its course, and then die off and the rest of us have a good time about things. this deal that the government my going, i have saved all
life and have some money in the and if live on, inflation does it thing, it will be terrific. the bank is getting free money and they don't pay interest on savings of any kind. about --alking inflation is going to eat us up. this virus will change our country quite a bit, the way we look at medical. we will have to have a medical core just a way we have an army corps to protect the citizens. lepers felt,the everyone has to stay away from everyone else or you might catch this thing. brings up akabas, he inflation, is that a concern down the road? guest: it is an interesting question because the government is pumping a lot of money into the economy and that is what can cause inflation concern. we heard jerome powell the other
day comment on this and i shared his view, back in 2008, there were similar concerns when the fed implemented a policy, or it was putting liquidity into the market. because of the reasons i said in my last answer, there will be reluctance by consumers to there may be certain areas where there is much higher demand, like sanitation products and other things that people are increasingly demanding because of the public health crisis, or even food, in some respects. but i don't think we are likely to see that on an overall economy basis because there's going to be a drop in demand for a lot of types of goods, even people who have the same money in their pockets. theirof people are losing jobs, and a lot of businesses are going out of business, so we
are likely to see a push and pull in both directions. host: jerome powell was participating online in an event last week with a very optimistic view, potential optimistic view of the economy. the headline, powell said the economic recovery can be "robust" after the coronavirus is contained. here's what he had to say. >> our emergency measures are reserved for truly rare circumstances such as those we face today. when the economy is well on its way back to recovery and private markets and institutions are once again able to form their vital functions, channeling credit and supporting economic growth, we will put these emergency tools away. none of us has the luxury of choosing or challenges. fake and history provide them for us. our job is to meet the tests we are presented. at the fed, we are doing all we can to shepherd the economy through this difficult time. when the spread of the virus is under control, as nasa's will
reopen and people will come back to work. there is every reason to believe that the economic rebound can be robust. we entered this turbulent period on strong economic footing and that can will support the recovery. in the meantime, we're using our tools to help build a bridge from a solid economic foundation on which we enter this crisis, to a position of regained economic strength on the other side. center,partisan policy what did you hear from the fed chair in his comments? guest: chairman powell was actually one of my mentors, i had the privilege of working with him for a couple years at the bipartisan policy center and i thought his comments were spot on in terms of the challenges that the fed is leading to meet and the tools they are using to do so. the one place i disagree a little bit, and partially because he is in a public position, i'm a little bit more pessimistic about the prospects for a full recovery in the short
run on the backend of this public health crisis. shapetalk about a s- recovery, or au-shaped economy, i think this is going to be a little bit more of a square recovery, what i mean is that you are going to see this drop and then there's going to be a recovery, a partial recovery when things start to open back up. but then we are going to see a long tail where it is going to take a much longer time economy to open up and again for consumers to regain their confidence and spending and all the other activities that they take on. there was a survey that just came out that showed that about a quarter of people say that it's going to be at least six months before they feel comfortable doing a whole variety of activities, whether it's going on vacation or going out to a large event, and there's another quarter, they had no idea when they are going to be comfortable doing that. that shows you the uncertainty
that is pervasive right now. until we can mitigate that with something like a vaccine or something that is widespread and , we are not fears going to see the tail end of that recovery begin. that whenow has said the recovery gets going, economy returns. the fed would "put those emergency tools away." wasn't it after the financial crisis of 2008, 3 long time, the fed was still involved in buying securities and that sort of thing. >> yes, and i expect that this will go on for a period of time, too. i think he is sincere when he says they will put them away when the time is appropriate, but i think it's going to be a longer recovery that a lot of people are technology. it's very hard to put a figure on exactly how long because there are so many different public most of all the health involvement which i'm
certainly not an expert to .omment on one important element that i wanted to mention, there was an interesting op-ed by the famous economists of the rockefeller foundation a couple days ago in the wall street journal and they said that it is really the widespread testing that is going to help us get back to a place of some normality. they need the ability to see whether people have the virus right now, and the ability to know whether they have contracted in the past, he does once we have those elements in place, we can do it on a population scale basis, and we will have the ability to at least go back to some sense of normalcy where people are returning to work and they are somewhat more comfortable. host: let's go back to your calls and hear from marvin in baltimore, maryland. you're on the air. caller: yes, sir.
reference to the , when is thatkage supposed to be sent out? if the caller talking about the direct payments? host: i think i just lost the caller, sorry about that. we will go to david in california, go ahead. >> yes, i'm calling because i've been listening to the program for the last few weeks and not once have they mentioned treatment,out everything is mitigation and it is indirect. real treatment would solve tuitions number one, it will solve the economy and because it will get us back to a full economy very fast compared to what we are going right now, and also, it will help enormously if andle don't get the virus have resistance to it and feel
inspired because of it. what are talking about is a historical rest are -- record with holistic medicine going back 100 years, the spanish flu. there's several studies of people who have staged for an ammonia level and they had in bothqual cases conventional medicine and chiropractic conventional medicine along with 6100 of the 10,000 who died, and chiropractors lost approximately 100. let: david in california, me ask you a question about the economy and about in particular, the business loans that were part of the care package, the $2.3 trillion package. asks, hear from oregon how soon do you think before the release money gets to the small businesses? guest: the relief money is already starting to be approved. i'm not sure in terms of the actual mechanics when the small
businesses are going to have those funds in their pockets, but the administration has said of $350 billion approved initially has already been approved or has already been applied for and confirmed by the financial institutions. i expect that money will start flowing soon, but it is a really important point that we are now already more than a month into this economic shutdown and that's a long time for a small business to survive on little to no revenue. there's research that is shown the average small business only has a cash offer of about two weeks, so for many small businesses, it could be too late. that's why the administration is prioritizing trying to get this program up and running, but when it comes to all of these programs of the government has, it's important to recognize that this is an emergency situation and they are trying to stand up several new programs or significantly expanded program
on a couple he turn around. that is no easy task, but what it demonstrates is a forward thinking before we get to the next crisis about what types of policies we can have in place so that these aren't new structures that need to be stood up, they are just new tools that we can tap into. host: we go next to california to hear from lila. good morning. caller: good morning. package, i take there is not enough information for people who are getting medicare. where't see anywhere people need to get on the computer except for on foxnews there was a little taste thing that ran across and a lot of seniors i believe are thinking that a check will just be deposited in their checking
accounts, and that's not going to happen and i believe it was the man who called earlier and he was going to ask about that but his call was dropped. and i think this is very disconcerting, what about people who are in assisted living places, and rest homes? they are not going to go to , i wish there was better clarification, i've watched all channels and there's so much news and i feel like this is not being addressed appropriately. host: we are hearing the news that those payments coming from the treasury department actually start this weekend. guest: that's right. they are first taking care of those who have taken counts on
the treasury department mainly through the filing of their taxes. that's estimated to be something in the order of 70 million people, tax filers. that they have a known bank account. there is a whole group of other people that the caller points out that are going to be more difficult to reach. who are receiving social security benefits are supposed to have this automated and not have to file additional forms, not 100% sure about that, so folks should look into that. i do know that the irs has put up a form for folks who do not fall into those categories who would be expecting a direct wire to their bank accounts to fill out that can make it easy for many of the other populations to get that. i do think of the caller raises good points around those who have no easy internet access or who aren't aware of these programs or how to access the websites. be a challenge for the federal government to get these funds out to all the
people who are of the. -- who are owed them. advicend similar, the may be to try the toll-free number of the irs for a regional irs toll-free number if you don't have access or good access. madison, wisconsin, this is marty. yeah, before the economy comes back, trump is going to have to open up the country. for the people that got laid off, furloughed, they did not get fired. when they start to rehire people, they will go back to the people they already know that works for them for five or 10 years, they already know the job, they will start right back where they started. the economy will follow as it goes along, ok? host: if you are a furloughed worker, are you eligible for
unemployment benefits? guest: yes. the expansion has made furloughed workers eligible which is very important because it means they can stay attached and still be taking an income that is in many cases crucial for the financial stability of their household. but i think was important to note, and your caller is right, there are going to be a lot of differences that will go back to those workers and they will rehire them and ring them back on in the same capacity as once this crisis has passed or once the worst of the crisis has passed. there's a lot of other businesses that are not going to be able to do that for a variety of reasons. some businesses are just going to have close already. are some that will be around in the same capacity as they were before the crisis. retailers, shopping malls are a pretty good example of this. for a long time, there has been a decline in the big-box stores and in person purchase of goods like that, moving toward amazon
and other online retailers. certainly seeing that expand and i expect we get out of the crisis, especially because of the uncertainties and concerns that people are going to continue to have about public eriod of time,p that trend is not going to go away. they will be able to hire back all those workers. there is going to be a mismatch and the economy is going to need to adjust. host: on reopening the economy, , theort this morning headline governor abbott rollout plan to reopen texas economy, this week the governor is expected to issue an executive and whenlining how texas businesses will reopen. today, he plans to unveil a new small business initiative, the details of which are unknown. as the state continues to battle the corona virus pandemic, he says he is starting to shift his focus on "protecting lives while restoring livelihoods." how important is it that the
governors of the states coordinate this opening of businesses between them? >> i think it's very important. we have one country where there is a free flow of people and goods, which means that if we get staggered reopening that are not coordinated, we are very the illness being transmitted from one place to another and not effectively contained on a lasting basis. both within each jurisdiction or region and across the country, we need that coordination when it comes to the public health side of things, in terms of testing and in terms of trying to discover therapeutics that can help symptoms among people who contracted the disease, and also when it comes to portions of the economy that are reopening. host: next up is florida, tom. caller: how are you doing? a couple points of it like to make, i actually work for added labs with infectious disease, and i worked on live antibodies. and daughters are
nurses. we got a little medical kind of experience behind us. one of the points i'd like to make, when we worked with the virus, we knew what we had and it was contained and we could control of antibodies, we had full knowledge and control of everything. this virus, we really don't know that much. we are learning by example. but i wouldn't put a lot of stock in everything that you are hearing daily. as you know, it's changing. the other point i'd like to make is the other people are asking about their checks. 26ve mnuchin said on march what he was doing a trump thing that the money was going to be in your account within two weeks. it wasn't that big of a deal to do direct deposit and that type of ink. that was march 26.
we are seeing how the roll up is coming out, they are going to be out of money soon anyhow, so the people that are waiting, you can find out when is my check coming. it forn't be looking for at least maybe six to eight weeks, realistically. that type of thing. the last thing, on the virus, we were actually warned. i don't ever hear anybody telling us, we were actually warned in december about this. christmasim jong-il's surprise that was coming to the united states, and we were warned about that, and i think we had a lot more knowledge than their leading on. we definitely had a lot more trust in china, that was kind of sad. i would just like to see us start bringing our manner of fashion back to this country. 1957, i was 10 years old watching tv and we had the cold war, sputnik had just went up.
tv, do you think you can defeat the united states of america? and he just smiled and looked into the camera and said we don't have to defeat the united states of america, they are going to defeat themselves from within. you can go and see that on the internet, that was in 1957. host: tom in florida. any thoughts? guest: first i want to take the opportunity to thank the caller and his family because the medical front line workers are the real heroes in our society that are helping us get through this crisis and think to them, we'll them a debt of gratitude, we also probably owe them some financial debt in the form of something like hazard pay for the risk they are all putting themselves through for the state of the community, and that extends to other front-line workers that are continuing to work in this kind of crisis like folks of the grocery store, sanitation workers, all of them
are porting themselves in harms way for the sake of the community. that's the first point that i would make. the other point that the caller you noted the checks, at the top that the insurance department, the irs has begun sending these out, the wires for people who have direct deposits, people who have bank accounts on record with the irs and those will probably continue over the next week or two. and then the checks, the , that willecks probably take a couple months and in some cases, it's going to be difficult to identify those people at all. theould add that i believe irs or the treasury department with some kind of tracker that you can go on and checked where your payment is, whether it is ready, whether you need to fill out some sort of form, that is something i would encourage folks to do if they are wondering about the status of their specific data. host: online we also see the
national debt clock, plus0,000,000,550 alien -- , every single person in america. you reported quoted in bloomberg government recently by saying that we could see debt to gdp at 100% by the time we get out of this over the next couple of prevent that tax increase or rely on increased revenues after the crisis has passed. >> yes, this is a critical challenge that i'm really worried about. one is that relative to other countries, we did not have these otherms in place, and the is that we have this large disparity that is growing, and is going to be terrifyingly large of a time we get out of this crisis.
it is likely that the public debt is going to exceed the size of our economy and be on a dramatic upward trajectory. int that is going to mean the coming years as a hard look at the spending programs, especially the programs like medicare, medicaid, that take up a large portion of our spending. and even more importantly, the amount we are bringing in with revenue in taxes which has been insufficient for many years. it's a shame that we as a society did not take the economy -- opportunity when the economy was relatively strong to start addressing these problems, and now we are in a position where we are going to be forced to address them on the backend of this crisis when the economy has not fully recovered. host: let's go to patricia next, calling from iowa. caller: hello? host: you are on the air. caller: first of all, thank you for being here to help us sort this out in the last you things you said, with the national debt
skyrocketing, i interpret it as my kids and my grandkids are going to pay this tremendous price of the stupidity of how we handle things, but my initial question was in regard to strings attached, we went through the 2008 crisis, we didn't attach strings, although people pleaded. no responses whatsoever in , because common sense told most people, you know, if you don't attach strings, it doesn't come back. in other words, the payments and so on. in light of that, what do you feel and how do you feel this is being handled, all these phases of this tremendous amount of tax money which is for years going to cause problems?
strings shouldk be attached? host: you are talking about oversight of businesses that get money and things like that? caller: that's the right word, oversight. host: good question. thanks for your comment. guest: yes, that's going to be an ongoing challenge for us to companies,hat entities that get this support are abiding by certain norms or restrictions that they have been put under. there is a requirement that those who get assistance retain at least 90% of their workers for a time. other restrictions on executive compensation. i think those are reasonably important. when it comes to the broader , that we are likely to need additional legislation, we are in such a time of crisis right now that the risk of not doing anything and not putting anything in these funds is actually greater than the risk of putting them in and adding to the national debt. right this moment is not the
perfect time to be restraining national debt, we need to be injecting the support for the economy needs and the relief that many households need. thereere will come a time he soon in my opinion on the back end of this that we need to turn our attention to that bigger challenge because i'm concerned that if we don't in the near future, there is a saying about the sick man of europe, the country that is dragging the rest of europe down, we are going to become the sick man of the developed world where the economies that have better starting positions in terms of their policies automatically respond, they are going to come out of this with a quicker recovery than we are, and that's going to put us in in for a challenge on the backend. host: one more question about mentioned your guest oversight of care funds, but is in that one of the same gentleman that president trump just let go? the inspector general?
guest: i believe that the president let somebody go and installed somebody else who has extent inved to some terms of having respect for the gentleman who was installed. i don't know a lot about his background. i do think that it is really critical that we have people in these roles have confidence of congress, to the prior powers to make sure that these funds are being used efficiently and for purposes. host: next call is from los angeles, michael. caller: how are you? a couple of points that i wanted , part of the stimulus program, i've never heard anything about making the funds that we have in our 401(k) available, maybe they could suspend the penalty for withdrawals to keep us abreast
with our mortgages and other bills. we receive them, we can put them back in. mets money that i can get now instead of waiting. and i agree as far as a long-term debt, let's start calling it like it is. the tax cuts that the corporations enjoy, that's where maybe we should suspend that. debt, myt is long-term kids and my grandkids are going to be saddled with this. offar as the other costs going for public medical coverage and such, social security and all that, they are going to cut that again. these corporations still get the tax cuts. host: michael, we will get a response. guest: the caller made some good points, the tax cuts are
certainly a major contributor to the public debt situation, there were other decisions along with that over the past decade or so that brought us to this place, not the spending we're doing right now that is a problem, the tax cuts from the spending that we did prior to this crisis that has put us in a situation that we are in today. also to the first point the caller made, we actually did make a provision for people who have 401(k)s and iras to put toward their current needs. host: without a tax penalty? guest: that's right. i just want to make one other broad point, when we think about the disparate impact this crisis is having on different communities, we've seen both from the public health light of things and also economically that the situation is likely to have a disproportionate impact on lower-income communities, communities of color, and it's important that we think about that when it comes to public policy, but from the public health side, when there are more
minorities that a pre-existing conditions or are put on the front lines in the workforce, whether it is in transportation positions, at grocery stores, facing the risks from this virus more so than rest of the population, were on the economic side were many more were in economically fragile situations before, the job losses many cases are in the retail industry or the service industry were a lot of those communities are employed. we need to think carefully about the responses that can help address specifically some of the challenges that is going to pose for those communities. >> new york city, this is peter, go ahead. caller: yes, hello. i'd like to make a suggestion that the pharmacies that you flu do flu shots, that they do the testing. these national pharmacies. that would solve the problem with testing. host: ok.
he studied economics at cornell, you have a bachelor's degree, masters from georgetown applied economic. did any of your education or training or your background ever predict anything like this, or what the models might show her the economy would look like in a severe pandemic like this? guest: no. there were certainly. the economic field who have done research on this, whether it is past experiences like the 1918 situation that one of the previous callers mentioned, for just theoretical frameworks, but the important point is that nobody could have predicted the situation. you ask in five months or six months, a global pandemic was not on anybody's list. we also see as progress through the crisis, the forecasts are continuing to change because we get more information on the public health crisis, more information on the economic front. there's no model that can put it
accurately what is going to happen in the coming weeks, coming years. it's largely going to depend on the path of the disease. virus, and thehe path that our policy takes to confront it on the public health site and economic side. those are not things that can be by economists, they will largely determined by our leadership in government. host: glad we could get you back on this >> present trouble deleting the white house briefing from the white house. coronavirus coverage on c-span radio, and c-span.org.
>> a special evening edition of washington journal on the federal response to the coronavirus crisis. join us at 8:00 eastern with dr. antifa out foundry, director of the national institute of audis and infectious diseases and a member of the white house coronavirus task force and directors of the infectious diseases division at the university of alabama and birmingham school of medicine on the fight against coronavirus and his own experience recovering from the disease. join us for more information washington journal prime time. >> our mission continues. an unfiltered view of government.
you can watch all of c-span passes public affairs on television, online, and the c-span radio app. and c-span's daily washington journal program or through our social media feed. brought to you by or television provider. >> there is likely to be action this week in the u.s. senate on additional legislation on top of the $2.2 trillion passed into law and now in effect in the cares act. we are joined by jennifer shut, appropriations and budget reporter for cq roll call. tell us why there is additional money congress needs to add onto to the money passed back in march. guest: so, in the large piece of legislation that congress passed in march, the aid package, there
was a new program that included forgivable small business loans. it's known as the paycheck protection program. it was designed really to help small businesses that had been shut down because of the social distancing guidelines to try to reduce the spread of the virus. thems designed to give money to get through this time and a big part of that program is that you know, they continue paying employees father employees are home. , congress package approved 300 and $49 billion for this program. which is a substantial amount of money. at the time they thought this would last for about two months, if not more. but this program has proved extremely popular since it launched. administration is now asking congress for an additional $251 billion for that paycheck protection program, bringing the total amount of