“They have thrown in a lot of stimulus, but I think we need to avoid taking the risk,” Hassett told CNN Business Thursday.

The former Trump administration official fears that without further help from Washington, the Pandemic worsens It will cause the US economy to suffer from a repeat of the first quarter of last year, when GDP contracted by 5%

“There are a lot of companies treading water, barely suspended. “You could end up in a negative spiral of the economy.”

“The disease is spreading at an amazing and frightening rate,” said Hassett, now a senior visiting fellow at the Hoover Institution at Stanford University.

Biden’s $ 1.9 trillion plan

With the US bailout, Biden is making a plan Great approach or go home. The package calls for $ 1,400 incentive checks For most people getting less than $ 75,000, enhanced unemployment benefits, $ 350 billion in aid for state and local governments and $ 400 billion in aid to tackle the pandemic itself.
That would be on top of the $ 900 billion relief package just enacted by Congress Last month to prevent benefits from expiring Millions of Americans. Some Republicans, deficit hawks, and economists as well They reject the size of Biden’s plan Soon after the last one.

Lindsay Bigga, Stifel’s chief economist, worries that the federal government is rushing too quickly to allocate more money to solve the problem.

“I would like to see a smaller and more targeted approach because we are seeing the economy evolve and adapt, rather than relying on additional helicopter money,” Bizga said.

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For his part, Hassett said there may be elements of Biden’s package that he loves the most In general, he “fully” supports the plan.

“We succeeded in achieving this last year without a total total collapse of GDP due to a very strong stimulus,” said Hassett, who acted as an official. CNN Commentator last year.
The former Trump economist is strange in his pessimistic view of the strength of the recovery. While Hassett warns that the US economy may contract in the first quarter, the Nowcast Federal Form in New York It expects rapid growth of 6.2%. After Biden unveiled his plan, Goldman Sachs raised its 2021 GDP forecast to 6.6%, although those forecasts assume Biden is getting $ 1.1 trillion in fiscal stimulus.

How vaccines and the epidemic affect the economy

The pandemic is clearly doing real damage to the economy, especially in virus-sensitive industries such as restaurants, movie theaters, hotels and cruise lines.

United State I lost jobs in December For the first time since spring. else 900,000 Americans applied for unemployment benefits for the first time During the final week of Trump’s presidency alone.

The slowdown in vaccine rollout threatens not only to extend the health crisis, but also the economic crisis.

The acceleration of vaccine deployment is complicated by logistical problems and the disastrous transition between the Biden and Trump administrations.

Biden and his advisors are taking charge without a national plan to distribute the Coronavirus vaccine by the Trump administration, Sources told CNN.
The US debt rose by $ 7 trillion under Trump.  It will go to a much higher level under Biden

Somewhat unexpectedly, Hassett fears the US economy will suffer another blow when vaccine distribution speeds up. He explained that the people who follow him in line to get a vaccine, or who have already received one dose, will be very careful to avoid infection.

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“If you hid in your basement for three weeks, you know you’ll be fine,” Hassett said. “There will be a massive increase in risk aversion. We should expect the economy to be really slow – even if the government doesn’t ask for further lockdowns.”

Hassett predicted that after some bargaining, Congress will pass another major stimulus package next month. And he indicated that Congress and the Trump administration came close to a $ 2 trillion stimulus package last fall.

“Now that the elections are over, people can only focus on what is good for the country,” he said.

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