Top economist reveals key to post-coronavirus recovery
David Henderson says Americans need to get back to work
A former member of President Ronald Reagan’s Council of Economic Advisers believes in order to really get the economy to recover from the coronavirus, Americans need to be encouraged to go back to work.
David Henderson told FOX Business' Gerry Baker during "WSJ at Large" it’s important to end a government program aimed at helping those who lost their jobs because of the pandemic.
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“The major thing that will help growth is if they let that $600 per week federal unemployment benefit expire at the end of the month,” he argued. “If they do that, the [jobs] numbers, which will come out in September, will be great.”
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Henderson, who is a research fellow at the Hoover Institution and an economics professor at the Naval Postgraduate School, explained those payments are a strong disincentive for unemployed to go back to work.
“There are about 20 million people who would make more being unemployed than being employed,” he pointed out.
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Henderson is also critical of the overall federal response to help businesses during the crisis.
“What they’re essentially practicing is industrial policy because they’re singling out who should get these grants and who shouldn’t,” he said. “I call them grants because, if you look at the details if you walk through certain hoops, you don’t have to pay it back.”
His suggestion is to make businesses think harder about reaching out for government assistance.
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“If you were going to have the federal government do something it would have some kind of loan program where people could borrow 60 to 80 percent of their previous year’s tax liability and pay a serious interest rate, [such as] 3, 4, 5 percent, not 1 percent,” he proposed. “And then, businesses would have an incentive to say: “How badly do we need this? Do we think we’ll be in business in a few months?”
He feels any financial help should be about looking toward helping the economy of the future.
“As you can probably imagine, we’re going to have different businesses when we come out of this,” he explained. “And we’ll probably have major structural changes and we don’t know which ones will last and which ones won’t.”
"Wall Street at Large" airs at 9:30 p.m. ET on Fridays on FOX Business Network.