President Donald Trump played coy with reporters earlier this week, suggesting that another stimulus would be forthcoming to help curb the economic effect of the novel coronavirus.
To paraphrase – the president said a package “was in the works” but had no specific details as of yet, but word on the grapevine is something of some repute will be pushed through in July.
However, some of Trump’s top economic advisors are recommending that the President and the legislature avoid more direct payouts, instead suggesting items such as payroll tax cuts and other business incentives.
Those advisors expressed concern about further direct payouts and their effect on a rising deficit. Not just debt, but deficit that is currently running the highest, per capita, it’s ever been.
And, according to some including analysts at Bloomberg, that number will only continue to grow – $10 trillion was tossed out as a potential ‘final bill’ for the spread of the coronavirus and it’s effect on the economy.
The unfortunate circumstance here is that both measures will affect the deficit. It could be posited that the economists believe that the tax cuts for businesses will provide less of an effect – as the government is heavily leveraged in personal income taxes, but the fact remains that neither measure is revenue neutral – both will increase debt and the deficit.
Second, the federal government will be hard-pressed not to offer both. For some small businesses in the Paycheck Protection Program (PPP), they were recently given the option to delay payroll tax payments until the end of the year, or into next year (2021). It’s a big benefit for businesses, to be sure, along with the PPP payouts, but the problem remains in the unemployment sector – nationwide, it remains in double-digits with no sign of going down with any rapidity.
Because quite a few individuals are concerned about going back to work, especially if they work in high-exposure industries like retail or service.
Some have asked to keep working from home, if possible, and employers will enable that as best they can, but in some workspaces that’s just not an option.
Governor John Bel Edwards and Dr. Alex Billioux suggested that the reason you see a spike in the 18-29 age group for coronavirus cases is because they tend to work in retail, sales, or service industries.
That’s risen a bit of concern, at least among some Louisianians, about going back out into the world during Phase 2 – which has now been extended at least 21 days, maybe even 28.
So with individuals concerned about going out or returning to work, there’s a shortfall on the individual income and business income side – so both will need help.
The U.S. Treasury has issued guidance that employers can fire employees who do not return to work. Not only would it be difficult to find a replacement, if a specific employer could at all, it doesn’t solve the problem if an employee can prove they have some sort of danger – either personally, or at home – by potentially exposing themselves to COVID-19.
Louisiana is a ‘right-to-work’ state, to be sure, but are these individuals not free to exercise their right to take a pandemic seriously? Much as the opposite – call them ‘no-maskers’ – are as well?
The fact is neither the federal nor state governments are legislating this problem in reality – that being the response consitutes a wide range of feelings and actions. Everything from complete fear and shutting in until a vaccine is available, to walking around as if the virus doesn’t exist.
And everything in between.
If the federal government is going to issue guidelines, and state government is going to be ‘laissez-faire’ about the phased opening, then both sides of the equation must be addressed. The arguments on social media, the sided reports by nationwide media outlets, they’re pointless because laws don’t exist to mandate a mask, and laws don’t exist to mandate you leave your home.
It’s an individuals constitutional right to treat COVID-19, at this point, however they choose.
For those who want to cite ‘stay at home’ and ‘phased openings,’ look at what the governor said Monday – ‘maybe we’ll have to up enforcement.’
There are some restrictions on businesses, which is why they need payroll help just like individuals need income help, but for the most part places of commerce can be open – right now – in some way, shape, or form.
Looking at the feds, giving out a ‘you’ll see’ response isn’t enough. The time to act is now, and action can be taken responsibly. It can’t be ‘business related’ or ‘individual related’ – it has to be both.
Because whether you’re responding to the coronavirus as if it didn’t exist, or you’re shut in your home, or somewhere in between, every American participates in the economy and right now it’s down, bad.
But this can be done responsibly – the federal government learned from the outlay of PPP, and has shored up their processes. Finding those individuals in need of direct payments, while also finding businesses who still need those tax cuts, is not impossible.
Just like the way we treat COVID-19, there is no blanket or one-sided fix for the economy. The government can’t go rushing in with $6 trillion, but it also can’t just focus on business when people are choosing not to work or use specific services.
There has to be balance, or unemployment will continue to rise, or the deficit will continue to scale at a level in which GDP cannot keep up.
Either scenario affects all of us, so hopefully our representatives act accordingly.
McHugh David is publisher of the Livingston Parish News.