Politics - News Analysis
This Economic Challenge Is Unprecedented in All of History
The only way to fight this epidemic to lose fewer people and not break our health care system is to shut down our economy. There is no other way.
We are in uncharted waters, in all of history, there is no precedent.
Frightenly, the government shut-down of businesses has already impacted the economy more than predicted according to a Washington Post report.
This is difficult to hear:
“The U.S. economy is deteriorating more quickly than was expected just days ago as extraordinary measures designed to curb the coronavirus keep 84 million Americans penned in their homes and cause the near-total shutdown of most businesses,”
“In a single 24-hour period, the governors of three of the largest states — California, New York and Illinois — ordered residents to stay home except to buy food and medicine, while the governor of Pennsylvania ordered the closure of nonessential businesses.
If anyone had contemplated such a thing before hearing about this epidemic, such actions would seem bizarrely overdone. Sitting here now, one hopes it is enough. As bad as this disease is going to be over the next two months, we may be in some sort of unknown situation for the next 12-18 months. Maybe far less, but maybe a year or more.
With each day, an unprecedented stoppage gathers force as restaurants, movie theaters, sports arenas and offices close to shield themselves from the disease. Already, it is clear that the initial economic decline will be sharper and more painful than during the 2008 financial crisis.
No shit? Yes, it will quite obviously be worse than in 2008. We have one advantage. This time there is a Republican president in office who is up for election in seven months. Usually, it is the Republicans who are more resistant to stimulus from the bottom up. They much prefer top-down. This time, they have to go with what works.
So it is good to have a Republican up for reelection and not one year into his term. Of course, having this particular Republican is catastrophic. This one is so focused upon the election, he is saying very dangerous things:
Little more than seven months before the presidential election, President Trump already is looking past the crisis and promising a swift recovery. “We’re going to be a rocket ship as soon as this thing gets solved,” he said Thursday. “… We think it’s going to come back really fast.”
No doubt that when we’re out the economy will shoot-up. The problem is how many businesses will even be around to enjoy that rise? Goldman Sachs predicts an economic shrinkage of 30% according to the article.
As we get three to four months in (which is likely) it will be very hard for many businesses to not have to declare bankruptcy and fire employees. How can those fired employees make it? No one will be hiring? They may still well be in “shelter in place.”
I am not an economist, just a lawyer. I do know two components that simply must happen. The government is already planning a one trillion dollar stimulus. Before you freak out about that sum, know that the Iraq war of choice cost quite a bit more.
But one trillion will not be enough, and they know it will take more as we go deeper. Solutions? Well, one is going to have to be a “Patriotic Tax to Save America,” there is a shitload of money at the top. The economic inequality of the last forty years has created a lot of people with over one-hundred million, quite a few people with well over a billion.
Time for those people to help pay for the nation that made them so rich. A tax of 33%? 50%? of any wealth over $100 million? That would collect one shitload of money to help the bottom get by without homelessness and despair. The other advantage of that tax? It still leaves each person taxed richer than beyond fcking belief, instead of $500 million, somebody might have to try to live on $250 million. It might be a little tight, but I have faith they will eat and be housed with $250 million. They might have to get by on only three houses. If you are left with an amount of over $100 million, you have no right to bitch, at all. You are still rich as fck and will never have to work again.
How does one justify such a tax?
It is the price you pay for being rich, free, and alive, all at the same time.
If the cities become ghettos with violence and uncertainty, that money does little good. There would be a lot of anger directed at people living like kings while some face homelessness. Violence against the rich would be very possible, and not unprecedented.
The other partial solution? Print fcking money. A lot. Yes, it causes some inflation, it impacts interest rates and national credit ratings. But it might keep people alive and hopeful. Keep checks coming for the bottom people. It is the only way.
Sorry for the length here, but other than those of us that get very sick – and those of us that do are the ones facing the scariest challenge, this is the next biggest threat. Answers must come from somewhere.
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