The Nobel Prize-winning economist Paul Krugman says it is important to realize that legislation around the novel coronavirus so far is not a stimulus bill; it is mostly a disaster-relief bill. He says it is good for the most part but will probably need to be bigger, maybe as large as $4 trillion or $5 trillion.
The crisis is not a replay of the Great Recession, Krugman says, adding that there will be a second wave if we don’t act forcefully enough now.
Krugman says we have a “huge fiscal time bomb” that is not getting enough media coverage. He predicts that just as the economy is ready to recover there will be mass layoffs of government employees and a cutoff of unemployment benefits unless there’s another major round of legislation.
He is not impressed with America’s response to the crisis. From an economic standpoint, he describes Denmark as a standout with corporations keeping workers on the payroll and the government picking up 75% of the tab. He believes the US, in some ways, has had the weakest economic response of any G7 country.
Chosen excerpts by Job Market Monitor. Read the whole story @ Paul Krugman warns of fiscal time bomb if relief is insufficient – Business Insider