This is the Cato Daily Podcast for Thursday, October 22nd, 2020.

I'm Caleb Brown.

How well has the Fed performed in this pandemic in his new essay for the Pandemics and Policy Series at the Cato Institute,

George Selgen discusses the Fed's role in a pandemic that has dramatically slowed economic

activity and left the U.S US in a unique recession.

When I speak to Ryan Bourne about economic policy in the face of a pandemic, he's always quick to say

we probably shouldn't be calling what Congress is doing stimulus.

Broadly speaking, it's relief.

And I think a reasonable distinction to make when we're talking

about we're not trying to juice the economy necessarily we're trying to allow people, not the luxury, but allow them to have this time to be distanced,

at least that was the initial pitch that was made by Congress.

So given that fact, given that reality,

that a whole lot of this spending is relief and not stimulus.

Does that or should that change how the Fed operates in an environment when a whole lot of

economic activity has declined and you know you have to save at least in the

short run for a good reason.

Well you know the distinction between stimulus and relief isn't always that clear cut Caleb. The distinction was one that

that was one that FDR made a lot of Haywood,

back during the Great Depression. of course many of his programs didn't play any part in

and of course many of his programs didn't play any part in helping the

economy really permanently recover, but they were designed to allow people to have some income, things like the civilian conservation core and etc. So we have the same kind of situation today. It's it's true that a lot of the

programs are really aimed at relief but it doesn't follow that stimulus is no part of what's going on at the Fed now.

...