Timing of the U.S. COVID-19 Policy Responses, China’s New Agenda, Misleading Trends


  • Pandemic Policy Hasn’t Always Seized The Moment
  • China Sets Its Priorities
  • Some Reports of Progress Are Greatly Exaggerated

Timing is everything. We want to hit the road just ahead of rush hour. We enjoy perfectly ripe fruit, and a perfectly cooked steak. (And a perfectly aged wine to go with it.) We seek to deliver jokes with just the right cadence so that a gathered group stops to laugh out loud. Getting the timing right is not always easy, but the rewards can be ample. The poor pacing of some recent economic interventions, however, is no laughing matter.

Vast tracts of the global economy came to a stop during the month of March. Large numbers of people were forced to work from home (if they could) alongside children engaged in distance learning. Many were furloughed from their jobs, with no certainty about when (or if) they would be called back. Fortunately, policymakers tried to gear their actions to match the rapid and massive downturn in activity. Legislatures passed emergency spending measures with impressive speed, at an impressive scale.

Two months later, however, some of those bold initiatives have yet to reach their intended beneficiaries.

Weekly Economic Commentary - 05/29/20 - Chart 1

Among the more effective measures has been the direct Economic Impact Payments called for in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The undertaking was ambitious; wide-scale disbursements are a rarity, and stimulus checks in past crises took months to reach households. Five weeks after the program was announced, more than 130 million payments had been disbursed. But 20% of those eligible are still waiting for their money.

The recent surge of initial unemployment insurance (UI) claims has been shocking. More than 40 million Americans, or about one-quarter of the total labor force, have filed for benefits. As a result, most state unemployment systems have struggled to keep pace with new cases. Adding to the challenge, the CARES Act also created Pandemic Unemployment Assistance (PUA), allowing millions of self-employed and gig workers to qualify for jobless benefits. To this day, from Oregon to Wisconsin to North Carolina, frustration continues as states’ employment security systems groan under unprecedented workloads. At this point, only about 60% of Americans who have filed for unemployment benefits have actually received them.

“There has been a lot of red tape holding back crisis-related benefits.”

The CARES Act featured a supplement of $600 per week on top of state UI benefits. Bringing that program online across all 50 states took a month, and it is up to each state to disburse any of these payments due in arrears. States were already working to catch up to the backlog of new claims, and this change to the process complicates their existing workflows.