Expert offers progress report on economy, says more stimulus likely

Business

KNOXVILLE, Tenn. (WATE) – Lawmakers continue debate over another coronavirus relief package.

The latest proposal from a group of Republicans and Democrats was released Tuesday. It totals $908 billion dollars and it would include $288 billion in PPP loans to small businesses.

It adds $300 a week to state unemployment benefits. It does not include $1,200 direct payments to Americans.

Reporter Blake Stevens spoke to an economics expert about the ongoing financial impact of the COVID-19 pandemic.

University of Tennessee-Knoxville associate professor Marianne Wanamaker says the U.S. has recovered half the jobs it lost earlier this year.

Wanamaker said spending is pretty good, even as cases rise and restrictions are implemented across the country. She thinks that will be even better as more people are able to get a vaccine. 

“The second tranche of people are older adults and people with pre-existing conditions. Those people have been at held up at home since March. You should expect, once they get vaccinated, they’re going to unleash the purse strings,” Wanamaker said. “They’ve been inhibited for this long and you should expect them to really exhibit some consumer spending behavior to boost the overall economy and create employment.”

The vaccine puts an end in sight, which is why she believes congress may be ready to act on more stimulus.

“They didn’t want to write a blank check,” Wanamaker said. “Now that you have some sense about when this thing is going to be over, I think you’re starting to see congress kind of open the purse strings a little bit and say well actually, we’re only going to have to provide this six, worst case, nine months, if you think of a restaurant for example.”

The next round of relief isn’t likely going to include direct payments to Americans. Wanamaker believes that’s the right call.

“It’s really inefficient, ineffective, stimulus. UI (universal income) benefits get spent, everybody knows that, so you’re more like to see that.”

No matter the final agreement, she explained, hard hit areas around the country will need the help soon.

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