On election night, Democratic campaign consultants may have been wondering, “Where did all these voters come from?” But unless the next Congress sets a legislative course over the next few months, Speaker of the House Nancy Pelosi may soon be wondering, “Where did all the voters go?”
The incoming Biden administration will need to navigate an extremely rough economic path ahead. Congress has struggled to reach an agreement for another round of stimulus to provide emergency relief for families and businesses. Now they must act before the “dark winter” ahead further deteriorates the economic recovery.
Challengers like Joust, Lili and NorthOne that offer banking services to freelancers and small-business owners are getting record levels of new customers as the traditional workforce thins.
Participation in the Main Street Lending Program for midsize companies is partly about public service, but the core business rationale is building "a banking relationship that continues on for some time," the Boston Fed chief says.
Dr. Bart Hildreth is professor and former dean at the Andrew Young School of Policy Studies at Georgia State University in Atlanta. Previously, Bart spent 30 years as a business school professor at Wichita State University (including interim business dean), LSU, and Kent State. His expertise is state and local finance, with a specific focus on municipal securities and tax policy.He is a public member of the Board of Directors of the Municipal Securities Rulemaking Board (2012-2015). He has served on the National Advisory Council on State and Local Budgeting and the Governmental Accounting Standards Advisory Council, received two gubernatorial appointments to serve on the board of the Kansas Development Finance Authority, chaired a state-wide tax review committee, served on several GFOA national committees (including the disclosure task forces), and held the position of Director of Finance for the City of Akron, Ohio where he had financial responsibility for the successful workout of a technical default on a waste-to-energy facility.Since 1989, he has served as the editor-in-chief of the only refereed journal devoted to municipal securities, the Municipal Finance Journal. In addition to numerous journal articles and books, his publications include State and Local Government Debt Issuance and Management, the Handbook on Taxation, and Budgeting: Politics and Power (Oxford University Press, 2010).A Fulbright Scholar (at McGill University, Montreal), he also received the 2008 national award for lifetime scholarly achievement in the field of public budgeting and financial management. Bart�s degrees are from the University of Alabama (B.A.), Auburn University at Montgomery (M.P.A) and the University of Georgia (Ph.D.).
Gross domestic product, the broadest measure of goods and services produced across the economy, decreased at an annual rate of 32.9 percent in the second quarter of 2020, followed by a surged of 33.1 percent in the third quarter, in part due to earlier rounds of fiscal stimulus when businesses were offered Economic Injury Disaster Loans and forgivable Paycheck Protection Program loans, and individuals received direct payments and extended unemployment benefits.
Economic experts believe the current surge is not enough to stop continued losses incurred by various segments of economy.
“While the strong bounce back in activity from the initial devastation of COVID-19 was heartening, the recovery thus far has been highly uneven, and the path ahead is highly uncertain,” said Federal Reserve Governor Lael Brainard in a speech last month at the Society of Professional Economists annual online conference.
This highly uneven and uncertain bounce indicates the prospect of a K-shaped recovery, where some sectors continue to recover, while others see a steady decline.
The new stimulus package must focus on the sectors facing difficulties ahead to avoid colossal damage and massive layoffs.
According to the U.S. Chamber of Commerce, approximately 4 million small businesses — 13 percent of America’s 31 million smallest employers — have now exhausted their PPP loans, and many face permanent closure without further assistance.
According to the National Restaurant Association, the restaurant industry will lose $240 billion. U.S airlines may be forced to furlough 75,000 pilots, flight attendants, mechanics and other workers by the end of 2020 if Congress doesn’t act.
States and municipalities are now on verge of extreme shortfalls due to declines in tax revenues and rises in additional costs. Local governments that fund and operate public school systems will need more funding. “The average school district will face $1.8 million, or $485 per student, in additional costs for disinfectants, personal protective equipment and other preparations to bring students into classrooms this year,” according to the Association of School Business Officials.
The Federal Reserve’s Survey of Consumer Finances indicates that cash-strained households will continue to suffer as a result of continued unemployment and reduced working hours. The CARES Act did support these households either through direct payments or enhanced unemployment benefits this year, but the financial security of these households will depend on whether unemployment benefits will be extended or supplemented next year.
Therefore, it is imperative for Congress to ensure that the recovery reaches those who have been disproportionately affected. A targeted fiscal support can turn a K-shaped recovery into a broad-based, inclusive recovery to eliminate shortfalls in employment and provide a better outcome overall.
