Michael Hiltzik: How a smart approach to stimulus saved the US economy from the pandemic
When a financial and economic crisis strikes, policymakers have only two options.
One is to protect the financial system — cutting interest rates, pumping reserves into the banking sector, preventing big financial companies from collapsing. That's known generally as monetary stimulus.
The other is to protect people — pumping money into household budgets, strengthening safety net programs such as unemployment insurance, allowing the government to step in as the source of family income when employers abandon them through layoffs and shutdowns. That's fiscal stimulus.
For decades, economists and politicians have debated which is better.
The debate is over. COVID-19 delivered the answer.
The U.S. government's $4 trillion outlay to keep Americans whole during the depths of the pandemic has resulted in a spectacular recovery — indeed, the fastest jobs recovery from the lowest nadir of the 12 American recessions since World War II.
What's particularly telling is the contrast between the course of this downturn and the last one, the Great Recession of 2008-09, which at the
