The case for monthly coronavirus stimulus checks: Americans ‘need consistent liquidity’

The latest Democratic proposal for the next round of stimulus is monthly checks for $2,000 for all Americans for the duration of the pandemic. Yahoo Finance’s Sibile Marcellus joins Seana Smith to break down the details.

Video Transcript

SEANA SMITH: Welcome back to "The Tickerr". The latest proposal from Democrats is for a stimulus package that will pay most Americans $2,000 a month for the duration of the coronavirus pandemic. We have Sibile Marcellus joining us now for more on this. And Sibile, we talked about this last week when the idea was initially proposed. Is the idea getting support at this point?

SIBILE MARCELLUS: Hi, Seana. So yes. We're starting to make a case for monthly stimulus checks for Americans because being one and done is not enough. A one-time $1,200 stimulus check will not help the millions of Americans who, as we know, have lost their jobs. 2.5 million lost jobs in the month of April, more than during the entire duration of 2008 financial crisis.

So I spoke to a Brookings Institution Senior Fellow Bradley Hardy, and he actually made the case back in March for monthly stimulus checks. And he said that it's absolutely necessary at this point because Americans need consistent liquidity. He also said that there is a cost to inaction, and that's what we're seeing played out in the labor market. As we know, the unemployment rate went to 14.% in April, but the Congressional Budget Office projects that it's going to remain elevated towards the end of the year and be 11.7%.

So we're not going to be in the clear this fall, and Americans are going to need more stimulus. So it's critical to have those stimulus checks as a part of the new round of fiscal stimulus, which is believed to also include aid for municipalities and states.

SEANA SMITH: And Sibile, I also want to point out that in your piece, it was interesting because you mentioned the fact-- and I mean, I guess it logically makes sense, but when people are laid off, they're less likely to spend. So some of the that you I got from Deutsche Bank was people who are unemployed drop their consumer spending by 10%, and then if they're still unemployed once their benefits are exhausted, their spending drops by even more.

SIBILE MARCELLUS: Yes, and that's critical. As you know, Seana, when it comes to GDP, roughly 70% of it is consumer spending. So people need to first of all, get those jobs back, and be able to spend in order to get the US economy back to where it was before the coronavirus pandemic. So as these legislators make calculations for helping large corporations, small businesses, they have to remember the American people so that they can also sustain consumer spending, which is a big part of the US economy.

SEANA SMITH: All right. Sibile Marcellus, thanks so much for breaking that down.