Top Lines: US Economy And Trade Policy | 2020 Election And Political Analysis | Coronavirus Crisis | Impeachment | Protecting Our Elections And Disinformation | Immigration And The Border | Countering Illiberalism's Rise
Notes On 2020 - With the usual caveat that we are facing a very volatile period in US politics, the polls tell a pretty clear story right now - Joe Biden is far more likely to win this November than Donald Trump. Trump’s COVID bump has receded, and in most measures his performance rating on managing the crisis has turned negative. We do a deep dive on the most recent data here.
In the coming days, it is our hope that the Democrats evolve into a true opposition party, bringing together the Speaker, Joe Biden, the governors, and leading Senators into a formal alliance to help steer the nation through the crisis in the coming months. We not only need to get money out the door, but we will need to better manage our national response to the virus itself - surge PPE/equipment/personnel to the front lines, finally stand up a national testing regime, and have a single physical distancing policy for everyone. For an understanding of how far we are from fully responding to the current outbreak, consider that on a per capita basis the US is 2nd or 3rd in the world in new infections, but 45th or so in total tests. So even though we continue to have among the most virulent outbreaks any nation has seen, 12 weeks into the crisis US testing is still dangerously far behind. A month ago, the President promised millions and millions of *additional* tests - so far in 12 weeks, the US has tested less than 3m people. It is a national tragedy - as is the inability for us to get front line workers the equipment they need to keep themselves from getting the virus.
The debate over phase 2 - standing the country back up and keeping it there - began in earnest this past week. Joe Biden offered a smart national plan yesterday. Our own Rob Shapiro makes a compelling case for universal mandatory testing in a new Washington Monthly piece; Ezra Klein has a good overview of the tough choices ahead in this new Vox essay. In the coming days we will also need clarity from the WH/DHS on how they expect to carry out the fall election, particularly if the President decides to somehow – can’t believe we are saying this - disable the Post Office this fall so people cannot vote by mail.
NDN believes that far more attention needs to be given to what the nation is going to do with young people this summer - if we go back to work, where do all the kids go? Can schools stay open this summer? Do we really expect teenagers to stay indoors all summer - it just isn’t going to happen. We need creative thinking here, and schools all across America should be discussing what they can be doing to create a bridge to the return to classes - we hope - this fall.
NDN’s Weekly COVID Zoom Discussion W/Dr. Rob Shapiro And Simon Rosenberg Fridays At 2 PM - To help stay in touch with our community in these challenging times, NDN will be holding a weekly Zoom-based discussion with Simon and Rob. These talks will be Fridays from 2 to 2:45 pm, and you can register for this Friday’s COVID discussion here.
More Work To Be Done As The Economy Enters Free Fall - NDN was pleased with the successful passage of a major economic rescue package by Congress last month. The bill takes important steps towards helping the millions of workers who have lost their jobs in this crisis, providing a bridge for businesses to cover their costs as their revenues have collapsed, funding state and local governments that have seen their deficits skyrocket, and providing a massive cash transfer program to boost the overall economy. However, this bill should only be seen as the first of many pieces of legislation to counter the crisis, and the question of whether the US can achieve a v-shaped recovery instead of a longer economic malaise will to a large extent depend on what Congress can get done now.
First, while this new level of spending by Congress (almost 10% of GDP) is unprecedented in modern American history, it is likely still too small considering the magnitude of the crisis. Goldman Sachs projects that growth will fall by an annualized 34% in Q2 while JP Morgan estimates a decline of 25%, and Goldman also now projects that the unemployment rate will hit 15%. To counter this enormous shock, Congress must be ready to authorize far more fiscal stimulus.
Second, more must be done provide bridge loans to small and large businesses to help them maintain their fixed costs during the crisis and to maximize their ability to avoid layoffs. Many Western European countries have implemented programs in which the fiscal authorities subsidize the labor costs of struggling industries in return for those firms keeping their workers on payroll, and the US should do the same on a much larger scale than in the first stimulus bill to avoid mass unemployment in the first place. A new bill has recently been proposed by some Democrats in the House to achieve this type of government support for worker payrolls, and this idea should be integral to our efforts to reduce unemployment.
Finally, state and local governments have far less flexibility to run budget deficits than does the federal government, and similar to in 2008-09 many of these governments have already started cutting spending programs and laying off workers as their revenues have collapsed - actions that will only intensify the economic crisis. The federal government must step in here and provide hundreds of billions of dollars to state and local governments to ensure that critical safety net programs are maintained and that government workers keep their jobs. For more on NDN's work on the economic consequences of coronavirus, click here. You can find new pieces on this subject by our long-time contributor Rob Shapiro in The Washington Post here and in The Washington Monthly here. Chris also published a new piece on how Congress should construct a massive fiscal stimulus, which you can find here.
Best,
Simon, Chris, and the rest of the NDN team
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