By David Roberts
The coronavirus has all but ground the US economy to a halt. The list of states and cities that have closed nonessential businesses and urged citizens to stay home is growing by the day. Essential workers remain in place, and some people are able to work from home, but millions of jobs — at bars, hotels, restaurants, gyms, theaters, salons, shops — are simply evaporating.
Late last week, Goldman Sachs predicted that jobless claims in the US will spike to 2 million in the second quarter, which it calls “the largest increase in initial jobless claims and the highest level on record.” The Economic Policy Institute projects that 3 million jobs will be lost by the summer.
All those people with shaky or vanished jobs still have families to feed, mortgages coming due, utility bills, student debt payments, credit card payments, car payments, prescription and medical bills, and children or older relatives to care for. Already, millions of people are uncertain where they will live or how they will pay bills in the months ahead.
The result is a huge, rapid, ongoing loss of purchasing power in the US economy. The same Goldman Sachs report projected a 6 percent drop in US GDP in Q2 and a 24 percent drop in Q3, which is utterly unprecedented in a major modern economy outside of wartime.
2. Invest in clean energy.
“It is very rare to be able to hit two birds with one stone,” says Michael Greenstone, head of the Energy Policy Institute at the University of Chicago, “yet clean energy stimulus spending can both help fill the serious demand shortfall and contribute to our massive underinvestment in research, development, and deployment.”
During the Obama administration, lots of work was done investigating stimulus focused on investments in clean energy, finding over and over again that it would boost the economy and reduce unemployment. Indeed, Obama’s stimulus bill was in part a $90 billion investment in clean energy, and, as Grunwald chronicles in his book The New New Deal, it was a spectacular success, sparking a decline in solar and wind prices that has since transformed the energy landscape.