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Keep the checks coming, Congress

Debt and eviction loom large for too many Americans. Lawmakers should pass a bill to send more direct cash payments to every household.

Laborers wait in a parking lot for day jobs, in Arlington, Va., on May 6. The jobless rate during the coronavirus pandemic has reached levels not seen since the Great Depression.
Laborers wait in a parking lot for day jobs, in Arlington, Va., on May 6. The jobless rate during the coronavirus pandemic has reached levels not seen since the Great Depression.ANDREW CABALLERO-REYNOLDS/AFP via Getty Images

Sure, the latest jobs report bore some good news: Over 4 million jobs were added in a single month. But that’s no reason for Congress to stop pumping money into the economy — more specifically, into Americans’ pockets. The unemployment rate is still a staggering 11 percent, each week still sees millions of new jobless claims, and major employers — even the venerable clothing chain Brooks Brothers declared bankruptcy last week — have been dropping like flies. There is no telling how or when this pandemic ends, whether businesses will be forced to close again, or how long it will take for the economy to reach full employment again. And so the best way to cushion any more financial blows to households across the country is for the federal government to send Americans more direct-cash payments, on a relatively regular basis, for the duration of this ongoing economic crisis.

There’s no time to spare. Millions of Americans already find themselves in debt and struggling to make ends meet. Many already fear looming evictions because they couldn’t make rent payments on time. And even for people who have been able to pay rent for now, there is trouble down the line: Some who have been left with no choice but to pay their rents on credit cards are racking up debt as other, less urgent bills are being left behind. The one-time stimulus of $1,200 issued in the spring goes only so far, and the extra $600 a week in unemployment assistance is due to expire soon — Senate majority leader Mitch McConnell has already said that the unemployment benefit will not be included in the next relief package, a move that would disproportionately hurt communities of color.


“People need more money,” said Jason Furman, who served as the chair of the Council of Economic Advisors from 2013 to 2017. “Temporarily, while we’re in a situation where tens of millions of households are well below their typical income through absolutely no fault of their own, I think it does make sense right now” to send direct-cash payments to Americans, as well as other forms of financial assistance. Sending direct payments not only helps the recipients but also provides a lifeline for the broader economy when that money is spent.

Congress is now considering another stimulus package, and President Donald Trump has suggested that it will be “very generous.” The question is who, exactly, it will be generous in supporting. “We definitely don’t need another $300 billion of stupid corporate tax cuts,” Furman said, adding that the most beneficial spending would go toward coronavirus testing, direct relief to households, and loans to small businesses. Aid to states and cities would also be warranted.


As it structures the next stimulus, what Congress should make sure it avoids is causing people to amass more personal debt. As of now, aggregate data doesn’t show a significant increase in personal debts. In fact, as a result of the pandemic, people have been spending and borrowing less money for reasons ranging from the pandemic making it harder to spend (no shopping trips, no date nights) to people bracing for financial hardships. But anecdotal evidence suggests that a debt crisis has not necessarily been avoided; rather, it may have simply been delayed. One advantage that direct-cash payments have over other forms of financial assistance is that they allow people to pay for what they most need, whether that is rent, credit card debt, food, or disinfectants and personal protective equipment.


Another reason direct-cash payments are crucial to a more stable economic recovery is that they would be more equitable, especially compared with dubious corporate tax breaks. Black workers are especially vulnerable to the financial risks this economic downturn has imposed, and Black and brown unemployment rates continue to be significantly higher than those of white Americans. Between April and June, for example, the white unemployment rate dropped by 3.6 percent, while Black unemployment dropped only 1.4 percent. In other words, the recovery lags in Black and brown communities, and direct-cash payments will simply help many more households avoid catastrophe.

Though the recent jobs report was a relief for some lawmakers, who took it as a sign to reduce unemployment benefits, they shouldn’t lose sight of the fact that neither the economic disaster nor the pandemic is over, and the last stimulus package helped prevent the worst. “That good economic performance happened in a world with massive economic assistance,” Furman said. There is no economic risk in giving Americans more money; the more cash people have, the more they will spend, helping small businesses draw in customers and stay afloat. As some states head back into lockdown, and the nation sees record-high numbers of daily infections, this is no time for Congress or the White House to let economic stimulus efforts wither.


Editorials represent the views of the Boston Globe Editorial Board. Follow us on Twitter at @GlobeOpinion.