A Three-Part Strategy To Help Biden Restore The American Economy

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Thin majorities in Congress offer President-elect Joe Biden the opportunity to be bold. He can challenge moderate Republicans to support programs that would boost jobs and incomes where the economy is now, next year and expected to be in 10 years.

The recent unemployment report was a shocker — nearly 500,000 jobs lost in the restaurant, recreation and hospitality sectors overwhelmed growth elsewhere — but another round of stimulus checks of up to $2,000 for all households that earn less than $150,000 would be wrong-headed.

Folks who work from home or whose jobs have been otherwise insulated from shutdowns have not suffered large income losses and without commuting costs, many have actually gained financially. New stimulus payments would be saved, used to pay down debt or spent, not on necessities, but rather mostly on gadgets and furnishings that often swell the trade deficit.

That doesn’t create jobs for the emerging army of 5 million permanently unemployed or tax revenues for cash-strapped state and local governments.

The unemployed and those workers reduced to part-time are running out of savings, maxing out credit cards and face evictions. Targeted aid to those in severe distress — much greater than $2,000 per household — would be spent on food, rent and necessities that create more demand for U.S.-produced goods and services, as opposed to imports.

Simply, on a dollar-for-dollar basis, assistance for the unemployed does more to create jobs and growth than welfare checks for comfortable suburban voters.

The stock market hit new records as the jobs report was published and President Trump’s angry hoard stormed the Capitol, because investors recognize 80% of the economy and its corporate profits will recover this spring and summer. It’s the stranded 20% where Mr. Biden should focus.

With work from home institutionalizing and raising productivity, many urban employment centers need repurposed to be more mixed residential-commercial use. Workers that sold services to commuters will have to reskill and often relocate, but the nation has real opportunities to create less-dense, more-humane patterns of commuting, work and home life.

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Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist. He is the five time winner of the MarketWatch best forecaster ...

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