A new study has shown that the severity of the recession is largely due to a dramatic reduction in discretionary spending by the affluent. It is fair to assume that this mostly means tourism, restaurants, and entertainment. What kind of stimulus would bring this spending back and restore the economy to health?
A stimulus won’t work. The rich don’t need another tax cut; they already have plenty of cash piled up waiting to be put to some productive use. What they need is the confidence that they won’t catch the virus if they go to the theater. Trump and the GOP don’t seem to understand that; they just think that forcing people to go back to their low-paying jobs will do the trick.
Where stimulus helps is with maintaining the spending of the less affluent. Like the previous rounds of stimulus, the next round consequently needs to focus on wage subsidies, unemployment insurance, and money for health care. Without this kind of help, the economy is going to get worse, not better.