The economy could rebound robustly if the virus were brought under control, says Neel Kashkari, president of the Minneapolis Federal Reserve Bank.
“If we don’t do that and we just have this raging virus spreading throughout the country with flare-ups and local lockdowns for the next year or two, which is entirely possible, we’re going to see many, many more business bankruptcies,” Kashkari said.
Kashkari says that Congress is well positioned to spend big on relief efforts primarily because the budget cap can be financed without foreign borrowing. Because those Americans still with jobs are saving a lot more than usual by not spending on restaurants, entertainment, and vacations, he says that we have a lot of resources to support those who have been laid off.
Kashkari stresses that the high amount of domestic savings and low interest rates should allow Congress to support the American people and the economy.
“If we get the economy growing, we will be able to pay off the debt,” Kashkari added.
Transcript of the full interview on Face The Nation here.