Now is the time to put the economic pieces back together, but it won’t be easy.
We are called “These United States” because a one-size-fits-all solution rarely works. There are massive differences between our states. Some are largely metropolitan, some are mostly rural. Some have mostly warm climates, some are Alaska. Ultimately, the states are best equipped, and constitutionally empowered, to make decisions about public policy in their own sovereign spheres.
We didn’t abide by these fundamentals over the past couple of months and our demolished economy is the result. Now that we know much more about the coronavirus, we’ll need to move quickly back to federalism and capitalism if we hope to rebuild an economy that was enjoying unprecedented growth and job participation before the pandemic.
Unsurprisingly, the data is showing us that the most vulnerable are those 65 and over with comorbidities like cardiovascular disease, diabetes, and obesity. And old age determined hospitalization and death to a greater degree than any of these underlying conditions. This information comes from a New York City Langone Health Center study of coronavirus patients, the largest one to date. Despite how desperately some journalists want us to see COVID-19 as an example of implicit racism, the study found “less influence” with regard to race. In other words, we know who really needs the attention of our resources and quarantine measures and it’s not healthy Americans and their school-age children.
The data is also overwhelming in terms of the vulnerability of elderly care facility residents. It’s only common sense that elderly people living in facilities without lots of sunlight and fresh air and in close proximity, are going to be even more vulnerable. It seems this group of Americans needed our care, our technology, and our quarantine.
Helping the sick should not mean controlling the healthy. We can help the sick without violating civil liberties and without disintegrating our economy. We can choose to use a scalpel or a knife instead of a sledgehammer. We can honor the personal responsibility and common sense of citizens rather than impose a virtual martial law in the name of preventing every person, including healthy citizens, from getting sick. But this is what happens when we demand our government solve all our problems and cure all our diseases. Why would we ask this of the same government that manages the USPS, the IRS, and the DMV?
On the day most Americans are normally mailing off their tax payments to the IRS, most Americans are receiving a payment from the IRS, or will later this week. What an upside-down world it is!
Millions of small business owners and nonprofits are anxiously awaiting Payroll Protection loans from the Small Business Administration, through their local banks, in an effort to keep employees employed. The $350 billion allocated from Congress is supposedly flowing through the system and will be exhausted by week’s end and Congress is debating another $250 billion for small businesses. Expect a lot of pork to be added to the plan. It’s clear that certain ideological partisans are not about to let a pandemic go by without attempting to leverage it to the max. They see this as a rare gift to justify massive and permanent government spending and control of the economy. This puts us at something near $6 trillion in costs to “compensate” for the sledgehammer approach. And the various “stimulants” are only getting started.
Industries are being bailed out, states are receiving billions to compensate for lost revenue, and the Federal Reserve is now a crisis lender. These types of actions lead us toward a dangerous precipice. The American economic system is based largely on the energy and interplay of private businesses, private banks, capital providers, and consumers. If our federal government continues to add massive spending and its related borrowing, it could crowd out free enterprise and capitalism as the preferred recovery mechanism. That’s not a future we should want.
According to the Committee for a Responsible Federal Budget, all of this spending will produce a deficit of $3.8 trillion this fiscal year. That is three times the largest deficit in U.S. history. Interest on our national debt is now the fourth largest item in the federal budget. Just wait until we calculate the intertest costs on the ballooning debt after all of these measures to counter the effect of the sledgehammer!
The best way to counter our cratering economy is to get people back to work.
Americans love to work hard and play hard. We can’t do either right now. We can’t even watch others play hard. The governors should take the lead here, with some general guidance from the White House and the President’s healthcare and economic advisors. Governors know what things look like on the ground in their states. It makes no sense for Mississippi and New York to be using the same strategy. And we need action now.
Small business owners are running out of savings and cash to keep employees. White collar workers, like lawyers, doctors, marketers, and accountants, are feeling the same pain that many service level workers felt six weeks ago. Formerly healthy companies are rapidly filing bankruptcies. Banks are setting aside billions to deal with defaults and bad loans. Consumers are maxing out credit cards and missing mortgage payments. This cannot continue.
Mississippi has just under three million residents. As of today, 122 Mississippians have died. While there will be more, and every life is precious, we should recognize our numbers of confirmed cases and confirmed deaths are quite small. Our testing numbers and our capacity for hospital beds and emergency equipment compare well to most of our neighbors and other states.
We need to stay vigilant and listen carefully to healthcare experts, but we can do this while we start opening up our economy. These are not mutually exclusive actions. Keeping nearly three million people in quarantine for much longer is not the correct public policy.
Gov. Tate Reeves should be given credit for his approach to date. He has resisted the urge to act like an authoritarian and given local leaders the flexibility to govern, until such time as a statewide approach was required. And his instinct on not trying to force churches to close was correct. Now let’s see how his instincts are on how to reopen the economy. We know Reeves will have loud detractors on social media, but it’s time to put the pieces of our economy back together. It just won’t be easy.