CHICAGO — The United States is facing both short and long-term economic problems as a result of the COVID-19 pandemic, but the country can pull through them with the right decisions. That’s according to Kevin Hassett, chairman of the White House Council of Economic Advisors (2017-2019), who answered more questions about the U.S. economy and the pandemic in part two of his Future Economic Landscape presentation on the Outlook Leadership Community.
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Taking a long-term view of the country’s economy after the pandemic, Hassett said the increase in car demand and the need to sustain businesses with local customers will likely sustain overtime.
Considering how the nation will change after the pandemic, he said preparedness for other emergencies will be more important for the United States. “If you’re going to be better prepared for pandemics, then maybe you’re also going to be better prepared for other long-run things,” said Hassett. He used climate change as one example of potential disasters for which people could be better prepared.
Looking at the near-term, Hassett examined school openings in economic terms. “If the schools are closed, it’s very bad for the economic outlook,” he said. The bottom line, he said, is that open schools allow for a two-income household if both parents work. Without open schools, one parent may have to stay home, potentially reducing that family’s income.
Hassett also drew attention to children in low-income families who depend on school for two meals a day. He also explained that teachers have historically played an important role in reporting child abuse, but reports of child abuse have dramatically decreased since the virus struck and fewer kids are going to school.
When asked about the ballooning national debt, Hassett said it is a long-term problem that the Federal Reserve System is doing its best to handle. “Government debt matters because it’s a summary of the future taxes we have to pay, but government debt isn’t really a near-term threat to the economy because the Federal Reserve has been so effective and aggressive at swooping in and buying bonds, putting them in reserve accounts, and so on,” he said.
Hassett recognized that the partisan nature of today’s politics is slowing down progress but predicted that partisanship could be less of a problem after the presidential election is decided. “There’s going to be a lot of nastiness between now and November, but after the election, whoever wins, that if Democrats and Republicans focus on things that they really should agree about, then there’s a chance that we can get out of this negative partisan climate,” he said.