Guardian editorial based on MMT economists Randy Wray and Yeva Nersisyan.
As Yeva Nersisyan and Randall Wray of the Levy Institute have pointed out, the US government is engaged in relief, not stimulus, spending. It is offering much-needed assistance to the devastated balance sheets of households, school districts and local governments. Rescuing public services, making sure people don’t starve and building Covid-testing systems is not an economic stimulus but a necessary antidepressant. Reducing the size of the relief package would prolong the recession, which, given the virus’s capacity to surprise, may last longer than the experts predict. President Joe Biden was right to rebuff criticism that Democrats risked overheating the economy, saying the problem was spending too little, not too much. There is slack in the US economy: 400,000 Americans left the labour market in January....The purpose of stimulus is to increase lagging demand in an underperforming economy, and that of relief is to support an economy failing owing to external shock. The need now is relief, not stimulus.
The Guardian — Opinion
The Guardian view on Covid relief: ideologies matter in democracies
Editorial
The Guardian report, despite its pleasing mention of Wray and Yeva Nersisyan, is false in its claim that Boris's crowd have not been thinking about recovery funding. For instance, the whole pre-COVID bent of the British Government (in the current Parliament) was precisely on massive spending in Northern Ireland and the North of England, to include in the latter's case all those populations hitherto marginalized by the EU-era concentration of economic activity in the South. The person who is calling for austerity, as Bill Mitchell has noted, is Keir Starmer. The new fisheries provisions and expansion of British quotas for 5 years (when all British fisheries are due to return to domestic fishers) and with a restart of the pre-COVID stimulus measures is a good start. More needs to be done, but the challenge lies not with Boris Johnson, but rather with traditional Tory grandees who desperately want to see him displaced, in favour of someone completely in the thrall of the City, as Starmer is.
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