PRESS RELEASE: BREAKING: S&P: BIDEN’S COVID PLAN WILL BRING GDP BACK TO PRE-CRISIS LEVELS BY Q2 2021

FOR IMMEDIATE RELEASE 
February 2, 2021

Contact:
Maddy McDaniel, Communications Director

maddy@investinamericanow.com or 914-471-7716

BREAKING: S&P: BIDEN’S COVID PLAN WILL BRING GDP BACK TO PRE-CRISIS LEVELS BY Q2 2021

S&P Global Ratings, Moody’s Analytics, Brookings, IMF Agree — Biden’s Covid Relief Plan Would Spur Economic Growth 

WASHINGTON, D.C. — The American Rescue Plan would bring U.S. GDP back to pre-crisis levels by the second quarter of 2021according to a new analysis from S&P Global Ratings. The plan would also lower the estimated risk of recession over the next 12 months.

S&P Global Ratings is the latest expert in macroeconomic analysis to say that the American Rescue Plan would spur economic growth, in addition to providing much-needed relief to struggling Americans:

  • Brookings: Biden’s $1.9 trillion recovery package would boost real GDP by 4% at the end of 2021 and bring the unemployment rate down to 3.2%.

  • Moody’s Analytics: “With this additional economic support, real GDP growth would be robust at nearly 8% this year and almost 4% next, bringing the economy back almost to full employment by fall 2022.”

  • International Monetary Fund“Preliminary estimates show U.S. President Joe Biden’s proposed $1.9 trillion economic stimulus package could boost U.S. economic output by 5% over the next three years.”

President Biden’s plan provides for another round of direct stimulus checks, an expansion of unemployment insurance, and much-needed help to keep essential workers on the job, assistance for renters, homeowners and small businesses, among other key provisions.

These provisions would both help rescue and grow the economy:

Unemployment insurance supports the millions of Americans teetering on the edge of poverty, and boosts the purchasing power of the U.S. economy.  

  • 7.8 million people fell into poverty from June to November as the poverty rate jumped 2.4 points — the largest jump since the government began counting 60 years ago. Requests for food pantries have skyrocketed in all 50 states and spending at grocery stores plummeted when $600 weekly unemployment checks expired in July.

  • Cutting off the $600 in additional unemployment insurance over the summer was a devastating blow, sending nearly 4 million people into poverty and pulling $667 billion of purchasing power out of the U.S. economy in August alone.

  • Expanding unemployment insurance now would support more than 5 million jobs, and boost the GDP by 3.7%, according to the Economic Policy Institute. And there’s no downside — research shows that people getting unemployment insurance work harder to find a new job than those whose benefits have run out.

  • Economists from Jason Furman to Moody’s Analytics’ Mark Zandi agree that unemployment insurance is one of the most potent tools available to help families and the economy. Every dollar spent on unemployment insurance generates a $1.64 increase in GDP, according to Zandi.

Direct stimulus checks are a crucial lifeline for millions of Americans and a boost for the economy. 

  • Families spent the first round of $1,200 stimulus checks on immediate needs like food, rent, and mortgages. The checks prevented people from falling into poverty and even helped drop the poverty rate by more than two points in April and May, when the pandemic was raging.

  • Federal Reserve Chair Jerome Powell credited the stimulus checks and additional unemployment insurance with a rebound in household spending — which we need to keep more businesses from shuttering.

  • More than 150 economists agree that the stimulus checks are an essential tool, and regular, lasting checks will boost economic security.

  • Support for direct checks continues to climb — at the end of March, 58% of voters supported stimulus checks. Now, 77% of likely voters support a $2,000 stimulus check.

  • With the poverty rate back on the rise, businesses shuttered, and millions unemployed, Americans need another lifeline.

Aid to state and local governments will reopen schools, keep first responders from being laid off, and support vaccination distribution. 

  • Local governments are in trouble — they make up about 13 percent of all employment, but since the pandemic began, state and local governments have had to lay off 1.4 million workers. Millions more jobs are at risk without more federal help.

  • Countless economistsformer and current Federal Reserve Chairs, and Senators on both sides of the aisle agree that we must rescue state and local governments. Even many of Mitch McConnell’s allies in the Senate have balked at his suggestion to let states go bankrupt.
  • Investing in state and local governments pays off for everyone — every dollar invested in state and local aid generates $1.36 in GDP growth.

Aid for renters and homeowners who face eviction is needed to address one of the country’s worst housing crises. 

  • We’re facing one of the most severe housing crises in U.S. history. In November, more than 12 million renters reported that they weren’t caught up on rent, and 30-40 million more could be at risk of eviction.

  • Renters are particularly vulnerable to the economic crisis of COVID-19 — up to 34% of renters are employed in jobs that are most vulnerable to COVID-19-related shutdowns. More than half of landlords have no access to a line of credit that could help them if their renters can’t afford to pay.

  • Communities of color are feeling the rental crisis the hardest — roughly 28% of Black renters and 24% of Latino renters are behind in payments. Half of Black and Latino households are struggling to pay for usual expenses like rent and groceries.

  • Renters are relying on help from Congress — during the pandemic, 30% of renters have used government aid to pay rent, and another 30% have had to borrow or take out loans to pay. But the aid they’ve gotten so far is nowhere near enough to end the eviction crisis, according to experts.

About Invest in America

Invest In America is a national rapid response operation advocating for robust public investment to rescue the economy from the COVID crisis and create prosperity for the future, and to fight back against fear-mongers who use deficit concerns as a scapegoat to starve American communities and businesses of resources.

The operation consists of two components: Invest in America, the charitable and public education arm, which is a fiscally sponsored project of Economic Security Project funded by the William and Flora Hewlett Foundation and Economic Security Project co-chair Chris Hughes; and Invest in America Action, the advocacy and social welfare arm, which is a fiscally sponsored project of Economic Security Project Action funded by Chris Hughes and the Omidyar Network.

Learn more at InvestInAmericaNow.com and @InvestNowUSA, and InvestinAmericaProject.com.

###