BACK OFF FURTHER STIMULUS

Chris Edwards, Economist, Director of Tax Policy Studies, The Cato Institute

While most economists have joined

the chorus calling for more stimulus— how much, not if, is typically the focus of the debate—edwards is a singular voice who would advise the next president to put the brakes on. “The government is overdoing it on relief,” he says.

“Overall American incomes were higher in recent months than they would have been without a recession because of the huge amount of federal relief,” Edwards says. “As for state aid, state government revenues have only dipped modestly, and local government revenues are stable because property tax revenue continue to edge upwards. At best, additional stimulus spending would modestly boost GDP for a quarter or two, but that would come at the expense of slower growth later on because of the higher debt or taxes. The economy will return to full strength on its own when the health crisis subsides.”

Edwards would also advise President Biden, if elected, to back off his proposal to double the capital gains rate. Edwards believes that would undermine America’s high-tech economy by robbing the entrepreneurs, angel investors and venture capitalists who invest in these high-risk ventures of their full rewards. If Trump wins, Edwards instead urges spending cuts. “The easy one is Social Security,” he says. “Reduce the growth rate of benefits for middle- and higher-income workers by 'progressive price indexing' of initial benefits.”