The effect of the rescue plans and the need for policies to increase economic growth

This paper evaluates the economic impact of discretionary fiscal and monetary actions taken in the United States during 2020 and 2021. The fiscal actions are The Coronavirus Aid, Relief, and Economic Security Act, or the “CARES” Act, passed in March 2020; The Consolidated Appropriations Act, passed in December 2020; and The American Rescue Plan Act, passed in March 2021. The paper focuses on the impact of the “economic impact payments” that underlie these fiscal actions. The paper also examines discretionary monetary policy actions taken during the same period. The overall implication is that there is a need to return to policies that increase economic growth and stability, including rules-based fiscal and monetary policy, rather than to continue with these one-time discretionary actions.