Emergency government assistance in the form of expanded jobless benefits and loans to small businesses has been critical in keeping the economy afloat, said Lisa D. Cook, a professor of economics and international relations at Michigan State University. But she worries what will happen when expanded jobless benefits expire at the end of this month and other assistance programs dry up.
“At the heart of this is job loss,” said Ms. Cook, who testified before a congressional committee this week. State and local governments are laying off health care and education workers, eviction bans are expiring even though a significant chunk of household renters and businesses are having trouble making payments.
“I just worry about this all piling up in the system,” she said, “and if we don’t have an eye on it right now, we can wind up with something worse than 2008.”
Airlines announced this week that they could lay off or furlough tens of thousands of employees in October despite billions of dollars in government aid because air travel has not rebounded. And even in cities where the coronavirus caseload has declined, consumers continue to significantly cut back on their shopping and dining out.