The basic economic misunderstanding that's screwing up the coronavirus response

Why Congress is having trouble embracing its own power

A one hundred dollar bill.
(Image credit: Illustrated | iStock)

Economic action by the United States government comes in two flavors: Fiscal policy and monetary policy. The first encompasses the taxing and spending decisions by Congress and the president. The second is basically whatever the Federal Reserve does. This division is taken as a natural fact by mainstream economists and policymakers. But it's actually pretty arbitrary, and it sows confusion about what the U.S. government's economic powers actually are.

With the coronavirus crisis barreling down upon us, that confusion has proven to be a major impediment — both to practical action, and to public trust that the government isn't simply bailing out wealthy elites.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.