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“We are going towards an unemployment rate of at least 25%,” he told Bloomberg Television on Monday. While joblessness may fall a bit as businesses reopen after the lockdown, “we won’t be back anywhere near to what we would normally say is a terrible level of, say, 10% to 12%” unless more government aid is forthcoming.
The jobless rate more than tripled in April to 14.7% as employers cut an unprecedented 20.5 million jobs. A further rise is expected this month.
Stiglitz called the almost $3 trillion in economic help Congress already passed “poorly designed.” He contrasted it with smaller packages abroad that were more focused on keeping workers on company payrolls as governments shut down economic activity to contain the contagion.
The Democratic Party-controlled House of Representatives last week passed an additional $3 trillion economic-stimulus bill that Republicans and President Donald Trump already have rejected. The House measure would give cash-strapped states and local governments more than $1 trillion, while providing most Americans with a new round of $1,200 checks.
“What worries me is that many people in the Republican Party have said go slow” on stimulus, the Columbia University professor said.
Barring quick development of a vaccine -– which Stiglitz views as a low probability -– the government will have to continue providing support to the economy during the next 24 months to make up for the hit to demand from uncertainty about the course of the deadly virus, he said.
©2020 Bloomberg L.P.
