FOR BRINGING US THAT STORY.
IT’S IMPORTANT THAT WE ALL
REALIZE THE CRISIS THAT’S
HAPPENING IN OUR NEIGHBORHOODS.
>>> MILLIONS OF AMERICANS NEED
MONEY RIGHT NOW TO SIMPLY PUT
FOOD ON THE TABLE.
THE OTHER SIDE OF THIS.
BUT SOME REPUBLICAN MEMBERS OF
CONGRESS ARE ARGUING RELIEF
CHECKS WILL BE SPENT ON OTHER
THINGS.
HERE IS THE TOP REPUBLICAN ON
THE HOUSE WAYS AND MEANS
COMMITTEE --
>> WILL THIS STIMULATE OUR LOCAL
ECONOMIES, NOT A LOT.
WHAT WE KNOW IS THAT MUCH OF
THIS EXTRA $1,600 WILL GO TO PAY
DOWN CREDIT CARD DEBT OR SAVINGS
OR EVEN MAKE NEW PURCHASES ON
LINE AT WALMART, BEST BAY, OR
AMAZON.
>> JOINING ME IS DIANE SWANK,
THE CHIEF ECONOMIST AT GRANT
THORNTON.
SO DIANE, THANKS FOR BEING HERE
WITH US.
WILL YOU RESPOND TO KEVIN BRADY?
IS HE RIGHT, IS HE WRONG?
>> WELL, THERE’S NO QUESTION
THAT STIMULUS CHECKS THAT GO TO
A BROAD GROUP OF PEOPLE ARE NOT
AS STIMULATING TO THE U.S.
ECONOMY AS IT WOULD BE TO HELP
THOSE WHO ARE MOST IN NEED.
BUT THAT SAID, WE KNOW THAT MANY
PEOPLE, THE $600 CHECKS, AND THE
$300 PER WEEK IS NOT GOING TO
PAY THE RENT THAT THEY OWE.
MANY OWE OVER $5,000 IN DEBT.
SO IT REALLY ISN’T A FAIR
COMPARISON AT THIS STAGE OF THE
GAME GIVEN WHAT WE LET LAPSE AND
HOW MANY FAMILIES ARE LITERALLY
RUNNING ON FUMES AT THIS POINT
IN TIME.
NOT ABLE TO FEED THEIR FAMILY
FOR A WEEK OR TO PAY THEIR
MORTGAGE OR RENT.
I THINK THAT’S VERY IMPORTANT.
THE OTHER ISSUE IS THAT WE’RE
LOOKING FOR ON THE OTHER SIDE OF
THIS IS FOR THE SAVING THAT WE
HAVE TO BE ON -- PENT-UP DEMAND
TO BE UNLEASHED BY DRAWING DOWN
THE SAVING.
IF YOU DON’T HAVE ANY SAVING,
THAT LEAVES ONLY THE WEALTHIEST
OF HOUSEHOLDS TO UNLEASH THEIR
PENT-UP DEMAND.
AS WE KNOW WHEN THEY SPEND, THAT
DOESN’T MEAN THAT INCOMING TIDE
LIFTS OFF BOATS.
>> LET’S TALK ABOUT THIS MONEY
GOING TO HOUSEHOLDS THAT MAYBE
DON’T NEED PUT FOOD ON THE TABLE
BUT COULD POTENTIALLY USE IT TO
GO OUT AND SHOP AT THEIR LOCAL
STORES OR EVEN ON AMAZON.
HOW EFFECTIVE IS THAT IN KEEPING
THE ECONOMY AFLOAT?
HOW EFFECTIVE WAS THAT IN
HELPING IN THE THIRD QUARTER OF
THIS YEAR WHICH DID A LITTLE BIT
BETTER THAN PEOPLE WERE
EXPECTING?
>> IT WAS NO QUESTION, IT WAS
VERY EFFECTIVE EVEN IN MAY AND
JUNE AS WE REOPENED A LITTLE
EARLY.
BUT THE MONEY THAT WE HAD FROM
STIMULUS CHECKS AND FROM THAT
EXTRA SUPPLEMENTAL PAYMENTS ON
UNEMPLOYMENT INSURANCE HELPED TO
UNLEASH THE ECONOMY AND WE SAW
MUCH STRONGER GAINS IN
EMPLOYMENT, MUCH STRONGER GAINS
IN CONSUMER SPENDING, AND THEN
AS WE GOT INTO THE THIRD
QUARTER, WHEN UNEMPLOYMENT
INSURANCE LAPSED, THE PEOPLE
THAT SAVED THAT MONEY DID IT FOR
A VERY GOOD REASON, TO SUPPORT
THE NECESSITIES OF FOOD AND
RENT.
AND WE ALREADY KNOW THAT, YOU
KNOW, THE UNEMPLOYMENT BENEFITS
ARE LIMITED THIS TIME AROUND,
AND WILL LIKELY NOT COVER
EVERYONE INTO WHAT IS GOING TO
BE ALTHOUGH A SHARP EXPANSION
ONCE WE REOPEN MORE FULLY, WE
DON’T KNOW HOW MUCH WE’LL REGAIN
WHAT WE’VE GOTTEN.
AND YOU’VE NOTED IN YOUR EARLIER
PIECE ABOUT RESTAURANTS.
YOU KNOW, FOR PEOPLE TO FEEL
COMFORTABLE TO GO OUT AND REALLY
MAKE A RESTAURANT PROFITABLE,
THEY’VE GOT TO HAVE PEAK LOAD
CAPACITY THURSDAY THROUGH
SUNDAY, AND IT’S THE BAR TABS
THAT MAKE THEM MONEY.
THAT’S NOT GOING TO BE THERE,
AND WE’RE LEAVING SCARS IN THIS
ECONOMY BY THOSE BUSINESSES THAT
HAVE FAILED AND HOUSEHOLDS THAT
ARE GOING UNDER.
WE JUST DON’T KNOW HOW DEEPLY
THE COMPLEXION OF THE ECONOMY
WILL BE SCARRED.
SO WHAT WE’LL RECOGNIZE ON THE
OTHER SIDE.
>> SO FROM AN ECONOMIC
STANDPOINT, HOW NECESSARY OR IS
IT NECESSARY TO PASS THIS $2,000
INCREASE IN THE DIRECT STIMULUS
RELIEF?
>> WELL, FRANKLY AT THIS STAGE,
I SAY GO AHEAD AND ADOPTDO IT BE
THE FAMILIES NEED IS SO MUCH.
IT’S NOT NECESSARILY TARGETED AS
UNEMPLOYMENT INSURANCE IS, BUT I
THINK AT THIS STAGE OF THE GAME,
GIVEN WHERE WE’RE AT AND PEOPLE
ARE SO FAR BEHIND ON THEIR
BILLS, IT WOULD BE A MUCH NEEDED
LIFT TO GET THEM WHOLE AGAIN OR
AT LEAST PARTIALLY WHOLE AGAIN.
AND WE REALLY NEED TO DO THAT.
THAT SAID, YOU KNOW, WOULD I
PREFER THAT CONGRESS -- YOU
CAN’T TAKE YOUR EYE OFF THE
BALL, THIS ONLY GETS US HALFWAY
THERE.
WE’RE ABOUT $2 TRILLION SHORT.
SO IT’S A $1 TRILLION IS A DOWN
PAYMENT, BUT THE OTHER SIDE IS
FUNDING STATE AND LOCAL
GOVERNMENTS.
AND WITHOUT THAT WE FROM
2008/2009, THAT CAN BEEN AN
EXTRAORDINARY HEADWIND.
MY FEAR IS WE’LL SORT OF RIDE AS
WE UNLEASH PENT-UP DEMAND AND
THINK THAT’S IT.
AND THAT WON’T BE IT.
WE’VE LEARNED THE HARD WAY THAT
A RISING TIDE DOES NOT LIFT ALL
BOATS AND THERE ARE PEOPLE WHO
ARE REALLY GOING TO BE HIT HARD
BY THIS CRISIS FOR A LONGER
PERIOD OF TIME.
>> I KNOW THERE’S WORRY ABOUT
THE NATIONAL DEBT, BUT THERE’S
WORRY ABOUT IT BUT THERE DIDN’T
SEEM TO BE THAT WORRY WHEN WE