Fed representative: large-scale spending to fight COVID-19 is possible

The head of one of the Federal reserve banks pointed to the high level of savings of Americans.

Congress can go to large-scale spending on the fight against coronavirus, because the country’s budget deficit can be financed without relying on external borrowing, given the amount of savings of Americans.

This was stated on Sunday by a representative of the fed’s management.

“Those of us who are lucky enough to keep our jobs save a lot more money because we don’t go to restaurants or movie theaters or go on vacation,” said Nee Kashkari, President of the Federal Reserve Bank of Minneapolis, speaking on “Face the country” on CBS.

“This means that we as a country have much more resources to support the dismissed,” he said.

The democratic-led US House of Representatives may approve a $ 3 trillion aid package for the coronavirus. In turn, Republicans in the Senate, many of whom expressed concern about the growing debt, recently unveiled a response proposal – a $ 1 trillion aid package.

Attempts to reach a compromise seem to have reached an impasse.

In a Sunday interview with “This Week” on ABC, Treasury Secretary Steven Mnuchin said that President Donald Trump is ready to go to the necessary expenses, but the deficit must be taken into account.

“Of course, we need to support workers and support the economy,” he said.” on the other hand, we must be careful not to accumulate huge debts for future generations.”

Kashkari expressed a different view, pointing to the high level of domestic savings and historically low-interest rates.

“I’m not concerned about this,” he said. “Congress should take this opportunity to support the American people and the American economy. If we achieve economic growth, we can pay off the debt.”