Federal Reserve Chairman Jerome Powell is noting his support for more relief funds while urging Congress to consider another substantial fiscal rescue package in order to salvage the United States economy.
In Powell’s speech on Wednesday, he discussed the scope and speed of the economic downturn, noting a multitude of problems businesses and American workers could face due to “an extended period of low productivity growth and stagnant incomes.”
“There is a growing sense that the recovery may come more slowly than we would like, but it will come. And that may mean that it’s necessary for us to do more,” Powell said.
Powell explained that the economic recovery process will likely need time to gain momentum but he’s urging Congress to deeply consider the trade-off of additional spending to avoid long-term economic damage that stifles recovery.
“The recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems,” Powell said.
See Powell’s full statement below:
While he admits another coronavirus relief bill would come with a high price tag, he says it may be worth the cost.
“Additional fiscal support could be costly, but worth it if it helps avoid long-term damage and leaves us with a stronger recovery,” he continued. “This trade-off is one for our elected representatives, who wield powers of taxation and spending.”
Powell went on to outline the possible long-term effect of financial disparity on the economy.
“We know that long periods of unemployment leave a shadow over the labor force and over our economy, over people’s lives en masse. We also know that waves of bankruptcies can weigh on economic activity for years,” he continued.
Powell’s statements come just one day after House Democrats unveiled a $3 trillion coronavirus stimulus package.
The proposed bill, which aims to provide funding for states, American workers, and expanded coronavirus testing, has been met with opposition from Republicans due to its staggering price tag, as previously reported on IJR.
However, House Speaker Nancy Pelosi (D-Calif.) has defended the proposed bill with a stance similar to Powell’s, noting the dire state of the economy is on the brink of collapse.
As states begin to reopen, the number of new coronavirus cases in the United States continues to rise, along with the death toll.
