Economics/Class Relations

If there’s a recession, don’t count on the government to come to the rescue with stimulus checks and boosted unemployment benefits

By and Business Insider

For the last quarter-century, the federal government has stepped in with some kind of emergency relief when the economy is in the tank. The next recession will likely break from that trend.

The dot-com crash of 2001 saw the Bush administration send $300 stimulus payments to tens of millions of households. Amid the 2008 financial crisis, the Federal Reserve slashed interest rates to historic lows and buoyed financial markets. Then, in 2009, former President Barack Obama’s first major piece of legislation was an $830 billion package to mitigate the worst of the Great Recession.

The response in 2020 — as the coronavirus thrust the US into a sudden shutdown — saw the Fed and Congress support the economy with low rates, emergency lending programs, bigger stimulus checks, and boosted unemployment benefits.

Now, as a growing number of economists see another downturn on the horizon, a similar degree of government help isn’t expected — even with inflation at 41-year highs. That’s because the looming recession will be one engineered by policymakers in an effort to combat inflation and its causes, leaving big federal relief efforts unlikely.

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