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Economists say congress should think big on the next economic rescue

Congress is wrangling over details of a stimulus package conventional wisdom in Washington is pegging will land in the trillions to get us through the fall, but macroeconomists are urging policymakers to think much bigger and much further ahead.

House Democrats have pushed for a giant $3 trillion stimulus . Republicans are pushing for a bill that will deliver $1 trillion or less. In either case, the goal is to build a bridge to Election Day or Inauguration Day when a new Congress can evaluate the situation in the first quarter of 2021, hopefully amid good news about vaccine development.

“I think at a minimum we’re at $1.5 trillion,” Elizabeth Pancotti, an economist and policy advisor at Employer America tells me of what we’d need to get us through the fall. Mark Zandi, the chief economist at Moody’s Analytics, cited a similar number earlier in the month . Other economists, looking toward a longer time horizon, put the number considerably higher at $3 or $4 trillion or possibly even more.

But even if good news arrives, the Congressional Budget Office calculates that an output gap — a need for fiscal stimulus to avoid elevated unemployment — will persist for years unless […]

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