The timing of changing social distancing rules and restrictions on economic activity all need to be guided by public health experts and data on the spread of the virus. Similarly, we should use data on the health of the economy to guide how much fiscal policy action is needed—not just over the next few months, but perhaps for much longer.
Using economic data-based triggers can ensure appropriate fiscal support that is aligned with economic conditions. For example, if the unemployment rate rises rapidly, it signals a recession, and certain policies should be employed. Doing so reduces the need for frequent Congressional action, which is especially valuable if political hurdles—e.g., the ability of Congress to meet in-person or political considerations during an election year—make new legislation