1750 Massachusetts Avenue, NW | Washington, DC 20036-1903 USA | +1.202.328.9000 | www.piie.com© 2020 Peterson Institute for International EconomicsJason Furman, nonresident senior fellow at the Peterson Institute for International Economics, is Professor of the Practice of Economic Policy at Harvard University. He served as a top economic adviser to President Barack Obama, including as the 28th chair of the Council of Economic Advisers from August 2013 to January 2017, acting as both President Obama’s chief economist and a member of the cabinet.MEMORANDUM ONPRIORITIES FOR ECONOMIC POLICYTo: The Director of the National Economic CouncilFrom: Jason FurmanOctober 2020Background: The global economy is reeling from a pandemic that has exposed and exacerbated some of the previously growing weaknesses in the international economic order. Your first priority is fixing the US economy—both jump-starting the cyclical recovery and also addressing the deeper structural problems that were evident even in the relatively strong economy prior to the pandemic. At the same time, it is critical that you—and the Deputy for International Economics who also serves as the G201 Sherpa—restore US leadership in the collective project of the global economic community, enlisting it to strengthen the US and global recoveries.KEY PRIORITIES• A global program of fiscal stimulus to strengthen demand and protect households and other priorities. With interest rates stuck at zero across the advanced economies, fiscal stimulus has powerful spillover effects that when done collectively will help reenergize both US and foreign growth. While a fully coordinated fiscal approach is impossible, returning to the mutual commitments to fiscal stimulus at the onset of the global financial crisis would have a salutary effect. The form will vary from country to country and in the United States should include unemployment insurance, nutritional assistance, and fiscal relief for states and localities—ideally all made a function of the unemployment rate so they last as long as needed.• Making the US economy work for families is critical in its own right and also to give Americans the security and confidence to participate in greater global integration and a greater US role in the world. Many elements go into this, but if you had to prioritize one, it should be investments in children, which not only provide direct assistance today but have long-run benefits in the form of increased work, higher earnings, better health, and less imprisonment. The 2014 G20 included a goal of increasing women’s labor force participation; consider whether a similar goal of investing in children would make sense for the G20 going forward.1 The members of the G20 are Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saud...
