Speaking Wednesday on Boston Public Radio, M.I.T. economist Jonathan Gruber offered some clarity into Washington tumult around future COVID-19 relief, and explained how the IRS could play a pivotal role in keeping the U.S. economy afloat through the current recession.
The conversation came amid growing worry over the nation’s economic health, as Congress has failed to reach a consensus around relief spending, and President Donald Trump said he has told his representatives to halt stimulus check talks until after the election. Without urgent and substantial relief, Gruber warned that U.S. states are primed to see a "massive new round of layoffs” down the road.
“We really rely much more on our state and local governments," he said, making a distinction between the U.S. and other developed nations. "The problem is, [states] don’t have the tools to deal with the recession. That’s why it’s so important that we get them the money right now.”
Gruber’s central message, however, was that while Democrats and Republicans debate the $600 billion differential between their relief plans, the U.S. is ignoring trillions of dollars in unpaid taxes from the nation’s wealthiest.
“The best estimate,” he said, "is that over the next decade, we will fall short of collecting the taxes that are owed by $7.5 trillion,” making the deficit between Democrat and Republican coronavirus relief packages “peanuts."
“This isn’t about liking big government,” he said. "This is about essential fairness. This is about the fact that, literally, people are not paying what they owe because we won’t put the resources in to catch the criminals."
Gruber is the Ford Professor of Economics at MIT, and was instrumental in creating both the Massachusetts healthcare reform and the Affordable Care Act. His latest book is " Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream."
