Both sides of the aisle are betting they’ll avoid the wrath of voters, despite this historic failure. The livelihoods of countless Americans will be worse off because of this political roll of the dice.
“Politicians in both parties are tempting fate by not agreeing to another round of fiscal aid,” said Joe Brusuelas, chief economist at RSM International. “This is more about politics than economics or finance. That’s the unfortunate reality of the matter, because real lives do hang in the balance.”
Uneven recovery at risk
“These are still dark economic times,” said Mark Zandi, chief economist at Moody’s Analytics. “The recovery is at significant risk because of the failure of the administration and Congress to pass another fiscal rescue package, particularly given that the pandemic is intensifying and the rancor over the election threatens to boil over.”
“A double-dip recession is a significant threat,” said Zandi.
Even if the United States avoids a return to negative GDP, Zandi said, the economy could begin shedding jobs again on a monthly basis, pushing unemployment higher.
“It may not go down in history as a double-dip, but it will surely feel like it,” he said.
‘Tale of two consumers’
The biggest concern is how the fading fiscal stimulus and worsening pandemic will impact consumer spending, the biggest driver of the US economy.
“While consumers have some cushion in savings, that’s going to run out very quickly — especially with the holidays approaching,” said Lindsey Bell, chief investment…
Read More: Analysis: How Washington’s stimulus gamble could backfire