How Biden's Pandemic Plan Could Affect The Economy
NOEL KING, HOST:
President Biden promises an aggressive federal effort to get control of the coronavirus.
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PRESIDENT JOE BIDEN: We will get through this. We will defeat this pandemic. And to a nation waiting for action, let me be the clearest on this point - help is on the way.
KING: We will need it. Another 1.3 million people filed new unemployment claims last week. NPR's chief economics correspondent Scott Horsley is following this story. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Noel.
KING: So we have a new administration, but the same eternal mystery. Businesses are closing. Millions of people can't get work, and yet the markets are soaring. Why is that?
HORSLEY: Well, it's always risky to try to make sense of the stock market. But part of what's happening, I think, is that investors see an eventual end to this pandemic. They're also betting that Congress will provide at least some of the economic aid that Biden is pushing for. It's also the case, Noel, that the pain of this pandemic recession has been really unevenly spread. You know, some industries have already enjoyed a strong recovery, like construction, manufacturing, tech companies that help people stay connected. They're doing just fine. And the roughly 1 out of 4 employees who can work from home have not had to worry about losing their jobs. The workers who have really suffered are those in jobs that depend on face-to-face contact with customers, you know, restaurant servers, bartenders, people who work in live entertainment. Those industries lost almost half a million jobs in December. And so long as thousands of people are dying from COVID every day, the jobs are not likely to come back soon.
KING: So what help is Biden proposing?
HORSLEY: The president's offering a two-pronged approach - first, beat the virus and, second, provide a financial lifeline until we do. To beat the virus, Biden wants to ramp up production of the vaccine, open more vaccination centers, hire more people to actually get shots into arms. Even if he's able to do that, though, it's going to take months. So in the meantime, the president's urging all Americans to be more diligent about wearing their face masks. And he does have some backing from the business community here. Neil Bradley, vice president of the Chamber of Commerce, says the business lobby has been pushing mask wearing for months now.
NEIL BRADLEY: Why? Because we know that masks, along with social distancing, helps reduce the spread. And if we can help reduce the spread, we can have more of the economy open and more businesses open in a safe way.
HORSLEY: As far as that economic lifeline, Noel, Biden is asking Congress to provide $1,400 relief checks to most Americans to extend unemployment benefits and also to come up with money to help schools reopen safely. That would give a boost to parents, you know, many of whom have been forced to leave jobs in order to care for kids who are at home during the school day.
KING: And you mentioned that it could take months to get the logistics of the vaccine under control. That seems to be what most people are predicting. What does that tell us about when the economy might turn around?
HORSLEY: Yeah. It's going to take time. You know, right now, there are nearly 16 million people collecting unemployment. They're not all going to be back at work in the next couple of months. The good news is that if we are able to get control of the virus, there could be a pretty strong rebound, say, in the second half of the year. You know, people who have continued to work during the pandemic have actually socked away a lot of money over the last year when so much spending was off limits. Economist Ian Shepherdson, who's with Pantheon Macroeconomics, says there's right now an extra $1.3 trillion sitting in U.S. bank accounts that could give a powerful boost to the economy once people feel safe, you know, going out to restaurants and concerts and getting on airplanes again.
IAN SHEPHERDSON: I'm pretty confident that the pent-up demand is very strong. And I think that the desire for people to return to some sort of normal pre-COVID existence is going to be extremely powerful as a force driving spending.
HORSLEY: And a boost in spending like that, Noel, could put a lot of people back to work.
KING: OK. NPR's Scott Horsley. Thank you, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.