What Does The Economy Need Now?

In the U.K., fraud has been limited because companies don’t get the money. And the government has encouraged workers to become whistleblowers, while imposing large penalties on the officers of companies engaged in fraud.

Rather than continuing to fund the Paycheck Protection Program, Congress and the president should switch gears and enact a program like the U.K.‘s that will see America through the crisis, however long it lasts.

 

An eviction crisis looms for the Biden administration. AP Photo/Steven Senne

Addressing the eviction crisis

Melanie Long, College of Wooster

The sharp rise in unemployment due to the pandemic has left many Americans struggling to pay the bills. Renters have been among the most vulnerable.

Compared with homeowners, renters are more likely to be poor, young and either Black or Hispanic – the exact same demographic of those who have suffered the most from the pandemic’s economic fallout.

The result has been a looming eviction crisis that has been staved off by a patchwork of federal, state and local moratoriums. Millions of renters could face homelessness once existing moratoriums expire and accumulated back rent comes due.

About 9 million households have fallen behind on rent payments, with over 1 million estimated to owe $5,000 or more. This could also worsen the public health situation and slow the economic recovery.

To address this crisis, I believe Congress needs to both provide short-term solutions and long-term fixes.

For starters, it’s vital that the Centers for Disease Control and Prevention’s eviction moratorium continue. On Jan. 20, Biden extended the moratorium – which was set to expire at the end of January – to March 31. But that will likely need to be extended further.

Another critical need is rental and housing assistance. Biden’s proposed stimulus package already includes $30 million to help renters and support struggling landlords. Adding even more assistance could have major economic benefits as low-income beneficiaries especially are likely to spend every extra penny on food and other goods, stimulating the economy.

Access to affordable housing has been worsening for years, especially in communities of color. The gap between black and white homeownership rates has widened since the 1960s. The fact that only 42% of Black Americans own their homes, compared with 72% of their white peers, means most of them are renters, making them more vulnerable to losing their homes. It’s also largely to blame for the stark racial wealth gap in the U.S., which in turn reduces economic growth.

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Disclosure: This article is republished from The Conversation under a Creative Commons license.

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Gary Anderson 2 months ago Contributor's comment

Great article. UK fraud is limited because corporations don't get the stimulus. Stimulus fraud in the US is disgusting.