Congress needs to start writing checks

Why the time for stimulus is now — and why legislators from both parties are hesitating

The Capitol building.
(Image credit: Illustrated | iStock)

The American economy looks like it's coming to a hard stop. And the relief package being cooked up in Congress — paid sick leave, expanded unemployment insurance, and state budget help — doesn't look like nearly enough to get it going again. That certainly seems to be one message being sent by the gyrating stock market.

Actually, at least one major Wall Street bank is explicitly delivering such a message. In a Thursday research note, JPMorgan economist Michael Feroli presented a dire economic forecast: The economy will shrink by 2.0 percent annualized in the first quarter and by 3.0 percent in the second before returning to modest growth in the third. Now, Feroli never uses the word "recession" in the note. Although consecutive quarters of economic contraction is the commonly accepted recession definition, the National Bureau of Economic Research — the folks who determine "official" recessions — uses a broader set of economic stats when making its call.

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James Pethokoukis

James Pethokoukis is the DeWitt Wallace Fellow at the American Enterprise Institute where he runs the AEIdeas blog. He has also written for The New York Times, National Review, Commentary, The Weekly Standard, and other places.