How do you prevent a coronavirus recession?
One find oneself today in the uncomfortable position of having to explain a hypothetical the White House. Promise the president himself in fact promise that we would have details today on what is administration might have in mind by way of Corona virus economic stimulus on the not misbegotten assumption. That this virus will hit the wider economy and potentially hard. So what do we know today? We know there's talk of relief for American oil drillers. We also know that relief item number one seems to be a payroll tax cut The first thing to realize is what's a payroll tax that Sarah Sinclair. She's professor of economics at the George Washington University in the US an players are required to pay a proportion of each employee's salary in taxes. Six point two percent to fund social security one point four five percent for Medicare that's part of our taxes that we see coming out of our paycheck and pay roll according to the Tax Policy Center. We all paid one point one trillion dollars in payroll taxes in two thousand seventeen. So the idea behind a cut. That's pretty clear. Get a lot of money and a of people's pockets quickly and hopefully out of people's pockets just as quickly in the form of that all important consumer spending however come a lot of times. They don't even necessarily know. Notice that additional money because it's a relatively small proportion of their paycheck in two thousand eleven president Obama cut payroll taxes by two percent giving families in average of a thousand extra dollars to spend a year before that the w Bush administration sent straight up checks to taxpayers which averaged about a thousand dollars both designed to boost sluggish economies. Today though the big worries a little bit different Nicole. Kaeding is the vice president at the National Taxpayer's Union Foundation. People aren't going to restaurants and are cutting back on seeing movies and not going to. The bowling alley is often not because of financial constraints. It's a public health. One all that social distancing and canceled events. They met her economically. Those restaurants and Bowling Alleys and movie theaters are going to see a decrease in demand decrease in customers in the short run but economics and the economy are complicated. Ain't nothing that happens in isolation. So here's Tara Sinclair from GW. One more time if we all need to cut back in order to protect the health of our society then we do need to rely on some fiscal stimulus to make sure that our jobs are there when we come back. Here's the thing about a payroll tax cut though. That gives some people a little pause in order to get the benefits of a payroll tax. Cut You have to be getting a pay check and getting a little money over time as in a slightly bigger paycheck every couple of weeks tends not to be as stimulative as a relatively larger amount of money all at once so there is that more to come on the corona virus stimulus plan as soon as Congress and the White House. Figure OUT WHAT IT IS. GonNa