July 7 (Reuters) - Direct cash assistance can improve financial security, raise consumption and speed economic recovery, a group of U.S. economists said in a letter, calling for authorities to provide key financing until the outlook is more solid.
Cash stimuli should be issued automatically, based on certain economic indicators such as the unemployment rate, until there is sufficient evidence that the economy is recovering, the mostly left-wing think tank said in an open letter sent by the Economic Security Project and Collaborative Justice.
"The first round of economic impact payments was a lifeline that helped some survive for a few weeks," the economists wrote.
"Even after businesses begin to reopen and jobs begin to return, there will be significant economic consequences and demand will continue to lag." if people don't have money to spend".
The letter was signed by 153 economists, including Jason Furman, who chaired the Council of Economic Advisers during the Obama administration; Claudia Sahm, former Federal Reserve economist; Darrick Hamilton of the Kirwan Institute for the Study of Race and Ethnicity at The Ohio State University; and Indivar Dutta-Gupta, co-executive director of the Georgetown Center on Poverty and Inequality.
Some of the signatories are advising Joe Biden's Democratic campaign for president.
Stimulus payments issued in April under the $2.3 trillion CARES Act helped raise spending for low-income households faster than among higher-income families, with much of the cash going to essential, according to an analysis by Harvard University's Opportunity Insights.
The $600 supplement Congress added to weekly unemployment benefits is set to expire at the end of the month, leaving unemployed Americans at risk of facing a cash crunch while jobs are still scarce.
(Reporting by Jonnelle Marte. Editing in Spanish by Marion Giraldo)
What do you think?
COMMENTFiled in: