These packages have cost over $2.8 trillion, boosting a federal debt that has already increased by $5 trillion during the Trump administration. The CBO report predicts the overall federal debt will approach $25 trillion this year with a budget deficit of $2.1 trillion next year. These debts are not sustainable as the federal government cannot print enough money to solve our self-imposed economic problems.
With over 1 million coronavirus cases and 60,000 fatalities in the US, markets eager to get back to business
29 April 2020
World Health Organization (WHO) Director-General Dr. Tedros Adhanom Ghebreyesus stated, in a briefing last week, “Make no mistake, we have a long way to go. This virus will be with us for a long time…while social distancing measures put in place in numerous countries to slow the spread of the coronavirus have been successful, the virus remains extremely dangerous. Current data shows that most of the world’s population remains susceptible.”
During Monday’s briefing, Dr. Mike Ryan, in response to a Brazilian reporter’s question on his country’s decision to ease restrictions based on figures that are clearly underreported, stated that if countries begin the opening of their economies too quickly, it may have more dire consequences on the livelihood of the nation, as they would have to reimpose lockdown measures to mitigate a second acceleration of the outbreak.
Dr. Maria Van Kerkhove carefully noted that it was insufficient to base decisions to loosen these measures solely on the basis of case numbers and deaths alone. More importantly is the need to have a workforce in place to track contacts, to implement an expansive infrastructure to detect the location and movement of the virus, appreciate the status of hospitalization and critical care capacity, and have schools and workplaces reconfigured to begin slowly receiving people into these physical spaces. The entire population needs to be engaged, informed and cooperative with these processes. “It requires mental preparation,” Van Kerkhove said.
The director-general then added, in one of his rarer displays of measured bluster, that countries that have ignored the WHO’s advice have also been the ones hurt most by the pandemic. He repeated his prior admonition, in response to calls for his resignation over mishandling of the pandemic, that the WHO had made the highest declaration of emergency on COVID-19 on January 30.
At the time when the epidemic was predominately confined to Wuhan and Hubei province, there were only 82 cases outside of China, of which 10 were in Europe. There were no cases in Latin America or Africa. There were also no deaths outside of China. “Every country could have triggered all its public health measures possible,” he said. “I think that suffices the importance of listening to WHO’s advice. We advised the whole world to implement a comprehensive approach. Countries that followed these recommendations are in a better position than others. That is a fact.”
Globally the number of daily cases has been declining slowly since peaking at the beginning of the month and has now reached over 3.1 million cases. Nearly 1 million people have recovered from COVID-19. Similarly, the daily number of fatalities has seen a steady decline, with the number of total critical cases around 56,000. Country after country have been in some form of discussion to begin easing restrictions given these seemingly favorable developments.
However, as much as the response to the pandemic was of an improvisational character, the manner and approach to opening economies are disorganized, woefully unsystematic and grossly premature. Rather than heeding the advice of institutions like the WHO or their own public health officials and epidemiologists, the argument that the economy has suffered too much finds open and unapologetic expression among governors and political leaders.
The United States surpassed 1 million cases yesterday, with only 140,000 of its people recovered. Nearly 60,000 people have died, half in less than two weeks. Yesterday, there were again more than 25,000 cases and 2,500 deaths. Though states like New York and New Jersey find their number of cases and fatalities flattening or declining, several states have seen increasing daily trends, including Virginia, California, Illinois, Massachusetts, Maryland, Iowa, Minnesota and Delaware.
Illinois saw its single highest death toll, with 144 deaths reported in 24 hours, raising the state’s total deaths to 2,125. Many of these cases are occurring in northern Illinois and the Chicagoland area. Health officials say that the state has yet to approach its peak.
Iowa Governor Kim Reynolds has given some businesses in 77 of 99 counties permission to reopen, again with some caveats, which leave significant room for interpretation and are wholly unenforceable outside of large conventions and spectator events. Yet, the trend in daily cases has risen from approximately 100 per day two weeks ago to close to 400 per day. Nevertheless, the number of tests conducted daily has not increased dramatically, with rates of positive tests climbing.
There have been almost 6 million tests performed in the US, accounting for 17,688 tests per 1 million of the population. This week, the number of daily tests consistently approached near 200,000. Still, on average, 17.5 percent of all tests are positive, indicating that the US remains significantly behind on identifying the extent of the epidemic within its national borders. The White House’s health experts, Dr. Anthony Fauci and Dr. Deborah Birx, have expressed their concerns that adequate testing remains a necessary milestone in the White House’s phased approach to reopen the country.
In a bizarre exchange at Monday’s White House briefing, ABC’s Jon Karl asked Vice President Mike Pence, “You said, in March, we’d be at 4 million tests by the following week. We’ve just now got there in the last few days. So, what have you learned about what went wrong over the last month and a half or two months, and what’s going to go right now? What lessons have you learned from the mistakes?”
In a nonsensical and disingenuous response in the vein of Trump, Pence replied condescendingly, “I appreciate the question, but it represents a misunderstanding on your part and, frankly, a lot of the people in the public’s part about the difference between having a test versus the ability to actually process the test.” In the face of 60,000 deaths that need not have happened, in just one month, this response is not only insulting, but also shows callousness and disregard for the suffering of so many. This was not a benign slip of the tongue.
U.S. Economy Shrank at 4.8% Pace in First Quarter
2:35
The U.S. economy shrank at a 4.8 percent pace in the first three months of 2020, the worst plunge since 2008.
This was the first negative reading for gross domestic product, the broadest measure of goods and services produced by the economy, since 2014. Economists had expected a contraction of 3.7 percent.
The report indicates that the deep cuts business shutdowns and social distancing made to what had been a growing economy. These took hold about three weeks from the end of the first quarter.
Consumer spending fell further than expected, plunging 7.6 percent. Economists had forecast a decline of 1.5 percent. The steeper decline suggests that many consumers began to pull back on spending even before formal stay at home orders were in place.
The economy grew at a 2.1 percent annualized pace in the fourth quarter of 2019.
The Bureau of Economic Analysis said in a technical note accompanying the release that this initial reading was probably inaccurate. The actual decline in GDP was likely much steeper than the initial report indicates.
The agency said that the coronavirus lockdown “led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified.”
The fall in GDP was led by a drop in consumer spending, nonresidential fixed investment, exports, and private inventory investment. Government spending and spending on homes somewhat offset those declines in the first quarter. Imports, which are a subtraction in the calculation of GDP, fell.
The decline in consumer spending was widespread, hitting both goods and services. Health care led the drop in spending on services, as many Americans canceled or delayed plans for non-urgent medical procedures. The decrease in purchases of goods was led by a drop in spending on motor vehicles and parts. The drop in nonresidential fixed investment primarily reflected a decrease in equipment, led by transportation equipment. The decline in exports primarily reflected a decrease in services, led by travel.
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Posted: Apr 26, 2020 12:01 AM
It took
President Donald Trump three years to build the world’s best economy with an unemployment
rate of only 3.5 percent, rising wages, strong consumer confidence and a robust
stock market. Sadly, it only took three weeks for that healthy economy to be
destroyed and the longer the economy is closed for business, the harder it will
be for our nation to recover.
The
economic statistics are truly staggering. The Congressional Budget Office
(CBO) projects that the economy will shrink by
40 percent this quarter and that the unemployment rate will rise to 16 percent
this year, before declining in the fourth quarter of this year and next year.
For comparison, the nation’s all-time high unemployment rate reached 24.9
percent at the height of the Great Depression in 1933.
Since the
shutdown began in mid-March, the nation has lost 26.5 million jobs. In
Louisiana, there has been an astounding 5,677 percent increase in
unemployment claims from last year. It has suffered the second highest
percentage increase in unemployment, behind only Florida. These states and
others that rely on retail sales, hospitality and tourism are suffering the
worst. Other states like Vermont and Connecticut that have a greater number of
high paying “white collar” jobs are doing much better.
Some
health experts are arguing that the country cannot open the economy until there
are almost no new COVID-19 cases. Such an argument is patently ridiculous. As
noted by U.S. Senator John Kennedy (R-LA) such a strategy will lead to the
collapse of the economy. According to Kennedy, “I wish we could do that, but we
will have burned down the village to save it.”
Economic
realities are why some states are moving forward with a limited opening,
despite opposition from President Trump. The most aggressive action was taken
in Georgia by Republican Governor Brian Kemp. He signed an executive order
allowing a variety of businesses to open, including theaters, restaurants and
gyms. These businesses must maintain social distancing guidelines and
restrictions. The order did not extend to nightclubs or bars.
Other
states such as Mississippi, Tennessee, Texas, Alaska, Montana and Colorado are
relaxing restrictions and allowing some businesses to reopen. This trend will
surely accelerate in the days and weeks ahead. Our country cannot afford to
wait any longer, as we have no viable choice. Economic collapse is not an
option that most Americans will tolerate.
This
health driven economic experiment has already been too costly. It is
undoubtedly one of the reasons why we have never closed our economy before,
even during the flu pandemics of 1918, 1957, 1968 or 2009.
It is
never a good strategy to throw people out of work, give them government checks
and then try to restart the economy on a limited basis months later. There is
no historical precedent showing that such a strategy has succeeded, certainly
not on a short-term basis.
In
response to the COVID-19 pandemic, there have been four stimulus packages
already approved by Congress and signed into law by President Trump. These
packages have cost over $2.8 trillion, boosting a federal debt that has already
increased by $5 trillion during the Trump administration. The CBO report predicts the overall federal
debt will approach $25 trillion this year with a budget deficit of $2.1
trillion next year. These debts are not sustainable as the federal government
cannot print enough money to solve our self-imposed economic problems.
In the
view of U.S. Senator Rand Paul (R-KY), these actions bring the United States
“closer and closer to a point of no return, a point at which the world loses
confidence in the dollar. A point at which our debt becomes an existential
threat to our security.” He said, “No amount of money, not all the money in
China, will save us from ourselves. Our only hope of rescuing this great
country is to reopen the economy.”
Of
course, Senator Paul is correct. If we do not reopen the economy, we will face
an economic Armageddon worse than the Great Depression. Even an establishment Republican
like Senate Majority Leader Mitch McConnell understands this reality. He warned
his fellow Americans that “unless we get our economy up and running again there
is not any way, we can spend enough to continue to prop up the country.”
President
Trump claimed that the new relief package he signed on Friday will be “great
for small businesses.” The reality is that a government loan is not “great,”
but it is necessary assistance to allow many of these small businesses to
remain open. True relief will not come until the economy is fully reopened and
Americans can return to some semblance of normalcy.
Jeff
Crouere is a native New Orleanian and his award winning program, “Ringside
Politics,” airs locally at 7:30 p.m. Fridays and at 10:00 p.m. Sundays on PBS
affiliate WLAE-TV, Channel 32, and from 7-11 a.m. weekdays on WGSO 990-AM
& www.Wgso.com. He is a political columnist, the
author ofAmerica's Last Chanceand provides regular commentaries on
the Jeff Crouere YouTube channel and on www.JeffCrouere.com. For more information, email him
at jeff@jeffcrouere.com
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