Brian Sozzi of Yahoo Finance explains why Congress would be wise to approve Trump’s $ 2,000 stimulus checks.
Video transcription
MYLES UDLAND: We were able to approve the stimulus bill in Congress. $ 600 checks are expected to hit consumer balances by the end of this week. Increased unemployment, $ 300 per week, which will occur in the next 11 weeks.
Brian Sozzi, however, you were looking at some research on what could happen if those $ 2,000 checks that we know the president wants– House Democrats approved, you know, a plan to release $ 2,000 checks. It doesn’t really look like it’s going to get anywhere in the Senate, but, hey, you can also consider it. And, look, the last time I checked, $ 2,000 is more than $ 600.
BRIAN SOZZI: Yes, that’s right, Myles, and you know me. I love my large number of headlines. But let me examine these finer points of Jefferies economist, Aneta Markowska. In a note this morning, she noted checks for $ 2,000 as opposed to checks for $ 600, which is 1% – that would be a 1% increase in GDP next year. That would take her estimate of about 5% currently for GDP to 6% next year, folks.
But this is very interesting, and I definitely want to know your opinion about it, Myles. She notes that checks for $ 2,000, as the president claimed and the House, they passed out yesterday, could shorten the distance to full employment and the Fed’s 2% inflation target by two to three quarters. So, Myles, this can be – this is a big deal just increasing the amount of checks. Again, balancing inflation, but still a very important number.
JULIE HYMAN: Well, something I would like to bring as well, you know, we’ve been talking about this whole pandemic the whole idea of K-shaped recovery and the results being very different for people who still have jobs and people who don’t. And I think if you look at these checks, it helps in the short term, but all this talk and looking at the navel, if you want, on how to correct systemic errors, whether racial or economic injustice, this bill is not, right? It is putting a band-aid on some of these issues, but it seems that during the whole discussion about it, there was really no movement in that. We will see if the next government makes any move in that direction, but there has been much more talk about helping people not to be evicted in the short term, for example, or helping people to pay bills in the short term and a lot less about how solve the biggest problem of wealth inequality, it seems to me.
BRIAN SOZZI: You know, Julia, I had a good chat yesterday at the local barbershop. In fact, some of the best conversations take place at the barbershop. And they were talking about the stimulus plan and saying that $ 600 is not enough for their families. You know, the guy who actually cut my hair, he has four kids. He said $ 600 is not going to help me. This is almost a trip to Target, Walmart or Costco. These are real Americans expressing real concerns. And whether you agree with President Trump or not, $ 2,000 for families like this from my local barber would be a lot better than a $ 600 check that doesn’t do the job.
MYLES UDLAND: What I would add, though – and I think it’s kind of where all of this goes as we move on to the next generation, more or less than politicians – people in America don’t have enough money, considering the only thing that we consider importing into this country is having money. And so I think that everyone wants – I really think that, in a way, people who are focused on – you know, come on – need to be mostly about racial, you know, equity or whatever, what kind of interfering, yes, but the problem is that we systematically make people who are minorities tend to make less money and therefore have fewer opportunities, because the only thing that really defines opportunity in this country, again, is money.
And so I think what’s going to be really interesting is that once you’ve given people two checks, a few thousand dollars plus the increase in unemployment in nine months, the speed with which the calls come back, especially if now we are working on it where, yes, it is good. This is what we do. We give money to our citizens intermittently.
And I do not know. I’m kind of sitting here thinking, man, I thought Andrew Young was a joke a few years ago, and I think he’s really on the right track. I think there is a reason why he was as popular as he was considering that he had no real policy programs other than checks for $ 1,000 a month and managed to get, which, 5%, 6% of the votes in the Democratic primaries. I think we’re going to talk about general things, probably – honestly, probably for the rest of our professional lives.