Fiscal Policy Moves Slower Than Monetary Policy

Regarding that last point, here’s a solid Vox overview of the legislative logjam over provisions of the $1.8 trillion stimulus being debated in the U.S. Senate. For a sense of scale, U.S. GDP was $21.7 trillion in 2019Q4, so the stimulus bill currently being debated is roughly 8.3% of U.S. GDP.

Potential complicating factor for legislative policy responses, unlike anything we faced during the Great Recession: “Five Republican senators are self-quarantining due to concerns that they may have been exposed to coronavirus, including some who are doing so after Sen. Rand Paul (R-KY) announced he tested positive for Covid-19 on Sunday night.”

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