What Austerity Will Cost Us

 

First Response    David Dayen. American Prospect

After a weekend full of impasses and breakthroughs, today a COVID relief bill will pass, nearly nine months after the last one, nearly five months after the boosted unemployment from the last one expired, a little over eight months after the first people got government checks to deal with the economic pain. The final sticking point, on the extent of cancellation of Fed lending programs, was handled over the weekend. The relief package is paired with an omnibus spending bill that includes a fix on surprise billing (our coverage, with the addition that Medicare and Medicaid rates have been thrown out of the assessment of the median network rate, making this friendlier to private equity-backed providers), an energy bill, a water bill (our coverage), a 25-years-in-the-making fix that restores Medicaid for Marshall Islands natives living in the U.S., $1.4 billion in border wall money, the entire tax extenders bill (which yields annual chuckles about tax breaks for Puerto Rican rum and thoroughbred horses), loan forgiveness for HBCUs, technical corrections to the trade agreement with Mexico and Canada, and an intelligence authorization bill. Obviously, this was the last train leaving the station this Congress. But with federal spending now set until September 2021, there’s no obvious must-pass moment for the next nine months, and with tight margins in Congress making this a "starter home," with additional relief down the road, will be very difficult. That makes the scope of the bill rather important.

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There’s nothing objectionable in this bill. (OK, one thing, which I’ll explain later.) It takes as its framework something I suggested on November 12: "Slice the money cannon into money for the people." This was kind of an accounting gimmick, as the money cannon didn’t technically have a CBO score (it’s complicated). But that’s what helped sell Republicans, the idea that they weren’t spending much "new" money because they were canceling out the corporate credit facilities. Whatever myth they told themselves, it got this deal done. (That and the threat of losing their Senate majority in the Georgia runoffs. The nation thanks David Perdue for coming 0.3 percent short of a simple majority in November!) So roughly $430 billion in corporate trickle-down money was converted into $600 means-tested checks for adults and children; mixed-status families will get the money and the checks could roll out as soon as next week. It was converted into 11 weeks of extended unemployment programs for gig workers and freelancers, as well as extended benefits, and a $300/week increase for all UI programs. Those two pieces have a value of $286 billion, less than the money cannon reserve. Add $25 billion in rental assistance, $20 billion for businesses in low-income communities, $14 billion to maintain mass transit systems, $13 billion for expanded nutrition assistance, $10 billion to sustain child care facilities, and $7 billion for broadband assistance for mostly poor families, and you’re still not there. There’s another $525 billion in the bill besides all that, mostly for another round of PPP for small business (with bigger grants for restaurants), another $15 billion airline bailout, $82 billion for schools, $69 billion for hospitals, vaccines, testing and tracing (will elaborate later), and a ridiculous meals deduction to satisfy Trump. So again: nothing objectionable. OK, here’s the one thing: the PPP tax "double dip." PPP grants are already tax-free, but small business owners want to be able to deduct expenses like payroll, as they would normally do, that was paid out with those tax-free grants. Progressives call this a "double dip" while a bipartisan group of lawmakers, pushed by affected industries, wanted this badly. Steve Mnuchin sided with the progressives, actually, but Republicans complained on a call yesterday and he reversed himself. What’s odd is that no Democrats come up in the conversation at all. This deductibility issue, while not scored, could be worth up to $200 billion to the affected businesses. Did Democrats ask for something in exchange for business relief? Looks like they didn’t.

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The only issue with this bill is, simply, it’s not enough. An artificial cap placed on the total cost limited the spending: the checks and the unemployment boost is half of its equivalent in the CARES Act. About 13.5 million adult dependents are ineligible for checks—this includes people with disabilities—for no articulable reason. Five weeks were slashed from the unemployment extension. State and local government aid doesn’t exist (there are individual grants for things state and local government provides, but it doesn’t amount to very much). Hazard pay and lots of other provisions were excised from Democratic wish lists for the sake of fiscal probity. This popular tweet about America spending twice as much as its industrialized counterparts is really about the paucity of our safety net; other countries do this stuff automatically. How "not enough" is it? That entirely depends on the vaccine rollout. The unemployment provisions start to fade in mid-March and are gone by April. The one-time check is one time. PPP grants cover two and a half months of salary (three and a half for restaurants). Are we going to be back to normal by April? Incoming surgeon general Vivek Murthy told Meet the Pressyesterday that widespread distribution may not come until "early fall." That would be the biggest failing of this bill. Negotiators did increase funds for vaccine procurement (up to $20 billion) and distribution (around $9 billion). They also extended the deadline for states to use CARES Act funds for COVID-related costs, which could go to vaccines. But far greater amounts would have to be expended to really shift the timeline of immunization. Put it this way: in the first week of the Pfizer vaccine, 556,000 Americans got a dose. Joe Biden’s vision is for twice as many to get doses per day in his first 100 days. And if you say that 150 million people have to be immunized to reach herd immunity, and each need two shots (at least of the vaccines approved now), that gets you to herd immunity in … about 300 days. Nearly a year. Now, there are now two vaccines approved for use, and maybe more coming. This will accelerate, and it’s the most significant logistical project in history, not one that will begin perfectly smoothly. But any expenditures that accelerate takeup will immediately pay off for the economy. That should have been the biggest item in this bill, not a $29 billion afterthought. In fact, eight months ago we should have been spending significantly to build and retool factories, hire logistical personnel, etc. Right now we can spend to re-orient vaccine production for non-approved makers to produce this vaccine. We did Operation Warp Speed for vaccine development and not distribution. If things work out and we start rolling out the vaccine widely in spring, this will have been a successful effort, for which we can thank Republican fears about Georgia. There will still be the nettlesome problem of state and local austerity to take care of, and a whole bunch of economic disruption. But the longer vaccine distribution takes, the worse this ends up looking.

To Control the Virus- Spend Big !

 To control the virus, Biden needs to spend big.  Stimulus.

 

https://inthesetimes.com/article/biden-stimulus-covid-debt-green-new-deal

 

Max Sawicky. 

California lags behind in available hospital beds

 By Thomas Fuller and Manny Fernandez

·       Dec. 1, 2020NYT>

SAN FRANCISCO — For all its size and economic might, California has long had few hospital beds relative to its population, a shortfall that state officials now say may prove catastrophic.

California is experiencing its largest surge in coronavirus cases with an average of nearly 15,000 new cases a day, an increase of 50 percent from the previous record over the summer.

https://www.nytimes.com/2020/12/01/us/california-hospital-bed-shortage.html

The Continuing Coronavirus.

The profound and continuing effect of the Corona Virus.

Dr. Nicholas Christakis

https://www.pbs.org/newshour/show/even-with-a-vaccine-covid-19-will-last-for-years-expert-says 

The U.S. and the Virus

America Stands Alone: The Unique Legacy of the Corona Virus

https://www.nytimes.com/2020/08/06/us/coronavirus-us.html?searchResultPosition=1
David Leonhardt. NYTimes

How the Virus Defeated America.  The Atlantic.

https://www.theatlantic.com/magazine/archive/2020/09/coronavirus-american-failure/614191/

Trump Removed From Office the Person Who Was In Place to Warn of a New Virus Outbreak

The Trump administration told the United States’ embed at the Chinese Center for Disease Control and Prevention (CDC) that the position would be defunded, causing her to leave her post in July 2019, according to a report from Reuters’s Marisa Taylor. The embed helped train Chinese pubic health experts and served in part as a liaison between Chinese officials and their counterparts in the US. 

With the administration planning to discontinue the role, the embed return to the US about five months before China began to see its first Covid-19 cases. Under normal circumstances, the embed likely would have passed information about the novel virus to US officials. Instead, Chinese officials were able for weeks to conceal the virus and the threat it posed, leading to a delay in the world’s response to what was then a matter of great concern and is now a pandemic.

Vox news

https://www.vox.com/policy-and-politics/2020/3/23/21190713/coronavirus-trump-china-cdc-embed-quick

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WASHINGTON (AP) — A series of missteps at the nation’s top public health agency caused a critical shortage of reliable laboratory tests for the coronavirus, hobbling the federal response as the pandemic spread across the country like wildfire, an Associated Press review found.


President Donald Trump assured Americans early this month that the COVID-19 test developed by the Centers for Disease Control and Prevention is “perfect” and that “anyone who wants a test can get a test.” But more than two months after the first U.S. case of the new disease was confirmed, many people still cannot get tested.


In the critical month of February, as the virus began taking root in the U.S. population, CDC data shows government labs processed 352 COVID-19 tests — an average of only a dozen per day.


“You cannot fight a fire blindfolded,” Tedros Adhanom Ghebreyesus, head of the World Health Organization, said at a recent briefing. “We cannot stop this pandemic if we don’t know who is infected.”


The Department of Health and Human Services, which includes the CDC, has begun an internal review to assess its own mistakes. But outside observers and federal health officials have pointed to four primary issues that together hampered the national response — the early decision not to use the test adopted by the World Health Organization, flaws with the more complex test developed by the CDC, government guidelines restricting who could be tested and delays in engaging the private sector to ramp up testing capacity.


Combined with messaging from the White House minimizing the disease, that fueled a lackluster response that missed chances to slow the spread of the virus, they said.

Stock Market Meltdown

This week’s stock market meltdown, explained

A warning that things are going to get worse.

By Matthew Yglesias@mattyglesiasmatt@vox.com  Feb 28, 2020, 4:20pm EST

https://www.vox.com/2020/2/28/21157689/coronavirus-stock-crash-dow-recession

Mr. Trump Meets the Covid Virus

So, here’s the response of the Trump team and its allies to the coronavirus, at least so far: It’s actually good for America. Also, it’s a hoax perpetrated by the news media and the Democrats. Besides, it’s no big deal, and people should buy stocks. Anyway, we’ll get it all under control under the leadership of a man who doesn’t believe in science.

From the day Donald Trump was elected, some of us worried how his administration would deal with a crisis not of its own making. Remarkably, we’ve gone three years without finding out: Until now, every serious problem facing the Trump administration, from trade wars to confrontation with Iran, has been self-created. But the coronavirus is looking as if it might be the test we’ve been fearing.

And the results aren’t looking good.

The story of the Trump pandemic response actually began several years ago. Almost as soon as he took office, Trump began cutting funding for the Centers for Disease Control and Prevention, leading in turn to an 80 percent cut in the resources the agency devotes to global disease outbreaks. Trump also shut down the entire global-health-security unit of the National Security Council.

Experts warned that these moves were exposing America to severe risks. “We’ll leave the field open to microbes,” declared Tom Frieden, a much-admired former head of the C.D.C., more than two years ago. But the Trump administration has a preconceived notion about where national security threats come from — basically, scary brown people — and is hostile to science in general. So we entered the current crisis in an already weakened condition.

And the microbes came.

The first reaction of the Trumpers was to see the coronavirus as a Chinese problem — and to see whatever is bad for China as being good for us. Wilbur Ross, the commerce secretary, cheered it on as a development that would “accelerate the return of jobs to North America.”

The story changed once it became clear that the virus was spreading well beyond China. At that point it became a hoax perpetrated by the news media. Rush Limbaugh weighed in: “It looks like the coronavirus is being weaponized as yet another element to bring down Donald Trump. Now, I want to tell you the truth about the coronavirus. … The coronavirus is the common cold, folks.”

Limbaugh was, you may not be surprised to hear, projecting. Back in 2014 right-wing politicians and media did indeed try to politically weaponize a disease outbreak, the Ebola virus, with Trump himself responsible for more than 100 tweets denouncing the Obama administration’s response (which was actually competent and effective).

And in case you’re wondering, no, the coronavirus isn’t like the common cold. In fact, early indications are that the virus may be as lethal as the 1918 Spanish Flu, which killed as many as 50 million people.

Financial markets evidently don’t agree that the virus is a hoax; by Thursday afternoon the Dow was off more than 3,000 points since last week. Falling markets appear to worry the administration more than the prospect of, you know, people dying. So Larry Kudlow, the administration’s top economist, made a point of declaring that the virus was “contained” — contradicting the C.D.C. — and suggested that Americans buy stocks. The market continued to drop.