Nearly eight months after it was declared a pandemic, COVID-19 rages on, and there is no global consensus on the right policy mix for addressing the public health crisis. But on how to deal with the economic fallout, the winning strategy is clear: Spend early and spend big. And no major economy has done that better than the United States.
Washington’s secret weapon has been the support for consumers. In late March, Congress overcame partisan differences to pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act, rushing out $2.1 trillion of public money, or more than 10 percent of GDP, to support households, small businesses, and larger corporations. At the same time, the Federal Reserve put in place a series of emergency lending programs to keep the money flowing.