President Donald Trump says he's in "no rush" to pass a new stimulus package, even as the economy is shuttered and unemployment rates are at their highest since the Great Depression.
Economist Jonathan Gruber told Boston Public Radio Wednesday Americans will unequivocally need more support to carry them through a long recovery.
"We absolutely do need more stimulus," he said. "We have shut down a $20 trillion economy for several months. In that world, the stimulus we've put together is not enough, particularly because even when we come out of this shutdown, it's going to be at least two years until we're back to where we were before this mess started."
Some economists argue an additional $3 trillion — what Democrats are advocating for — would just put future generations in massive amounts of debt. Gruber said he generally agrees with this assessment but cautions that it doesn’t take into account concerns of more frequent economic crashes.
"After World War II [we didn't] enact massive tax increases, we just sort of grew our way out of it. We just — over the next several decades —had a growth rate at a rate higher than the interest rate," said Gruber. "That's a model that works, as long as it doesn't happen every 10 years."
Gruber said there is a "legitimate concern" that the economic cycles are getting closer together.
"This could be the new normal, that every 10 years there's some sort of giant crash, in which case we do have to start to worry about this," he said. "The answer is not that we should go cheap on the stimulus now, the answer is that we should recognize that in good times we should collect more in taxes."
Jonathan Gruber is Ford Professor of Economics at MIT. He worked on the Massachusetts healthcare reform and the Affordable Care Act. His latest book is "Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream."
