As President-elect Joe Biden prepares to take office, fixing the economy is expected to be one of his top priorities. R. Andrew Butters, assistant professor of business economics and public policy at Indiana University, says there will be challenges ahead for Biden due to the pandemic and its impact on the economy. First, Butters says Biden must focus on public health, which will be his most challenging task. Until COVID-19 is under control, Butters says optimism about the health of the economy will remain fleeting. Furthermore, he says the job losses and slowdown in economic activity experienced across the country are likely to persist for many months or even years. The severe impact can be seen in the number of individuals filing for unemployment insurance for the first time – one of the timeliest economic indicators, he says. Until 2020, the highest number of those filing in a single week was 700,000. The U.S. broke that record every single week since March 21, with a peak of over 6 million in late March and early April. Put simply, Butters says the Biden administration faces a troubled economy the likes of which haven’t been seen in U.S. history. Moreover, traditional monetary and fiscal stimulus measures are either unavailable or unlikely to be all that effective in boosting economic activity in all sectors. Biden has stated he will push for a stimulus package, which Butters suspect will take place soon after Biden takes office. Butters says one likely focus will be income support. However, Butters says economist tend to favor stimulus that generates economic activity for every dollar spent. Furthermore, while helping individuals with income support will help those most hurt by the pandemic, Butters says it will not bring back jobs. Stimulus packages that attempt to invest in certain sectors of the economy to generate demand for labor and create jobs could go further in providing a longer-term impact on the economy, he says. While Biden has vowed to work to bring back the economy, Butters says just as the arrival of the pandemic and collapse of the economy were mostly outside the control of President Donald Trump, it would be fair to say there is a limit to the amount of direct control Biden will have on the recovery. Ultimately it will be guided by the progression of the pandemic, as we have seen in other countries, he says. That being said, Butters says public health policies that speed up the development and distribution of an effective vaccine are likely to make a big difference not only in ending the pandemic but in reviving the economy as well. The amount of stimulus Biden and Congress provide, and how well it is targeted, will likely determine how quickly the economy recovers.
As the pandemic continues to wreak havoc on the economy, the need for giving has increased across the board. For those thinking of making a donation, experts say now might be a good time to do it. One reason is that under the CARES Act, part of the federal government’s pandemic relief program that passed in March, individual taxpayers can take a deduction of up to $300 for cash donations made in 2020 when they file their tax return in the spring. Typically, a deduction in charitable donations can only be made if you itemize your personal deductions. To qualify for the deduction, the donation must be made as a monetary donation; stock, volunteer hours or donated goods don’t qualify. Una Osili, associate dean for research and international programs at the Lilly Family School of Philanthropy at Indiana University, says while $300 may not seem like a large sum to donate, it can go a long way toward helping charities stretched thin by the demands of the pandemic, nonprofit specialists say. It is a step in the right direction, she says. 2020 has been an interesting year for nonprofits. Due to the COVID-19 pandemic, many have been forced to find creative ways to fundraise, as in-person events have been cancelled. Additionally, the pandemic has created a greater burden on nonprofits as the number of those in need rises. Osili says there are many opportunities to give, whether it be money, food, or your time. For those navigating the many choices, Osili says start local. Look within your existing social networks for donation or volunteer opportunities and build from there.