“The CARES Act was massive, but it was a very short-term offset to what is likely to be a long-term problem,” said Aneta Markowska, chief financial economist for the investment bank Jefferies, referring to the legislative centerpiece of the federal rescue. “This economy is clearly going to need more support.”
Even the possibility that the programs will be allowed to expire could have economic consequences, Ms. Markowska said, as consumers and businesses gird for the loss of federal assistance…
To some Republican lawmakers, extra unemployment benefits and other assistance made sense when businesses were shut down and the government was discouraging people from leaving home. But as the economy reopens, they say, the benefits could impede the recovery by providing an incentive not to return to work.
Many economists feel those fears are overblown. Generous benefits might be a deterrent to work in normal times, they argue, but these are hardly normal times. Even the most optimistic forecasters expect the unemployment rate to be well above 10 percent when the extra benefits expire, meaning there will be far more jobless workers than available jobs.