Back in March, less than 10 days after the first person in San Antonio tested positive for the coronavirus, I wrote an open Letter to Washington: Invest Smartly in a More Secure Future. Don’t recall reading it? Not many people did, actually.
Readers were watching their bank accounts for the arrival of $1,200 stimulus checks. Furloughed workers and others who had lost their jobs were signing up for $600 weekly unemployment checks. The temporary sense of security people felt after passage of a $2 trillion stimulus package made reading about the future of our economy a task easily deferred.
Now, however, the party is almost over. Many more of us have experienced COVID-19, or know someone who did, and the worsening spread of the coronavirus has made facial masks and prolonged social distancing essential. The stimulus checks were quickly spent on rent, food, and other necessities, and the unemployment checks run out at the end of July. It’s time for the Trump administration and Congress to focus on public health, education, and American workers.
San Antonio and the nation need another stimulus bill because federal and state elected leaders have failed to control the spread of the virus and limit its continuing impact on the economy, jobs, and small businesses. Failure to pass an adequately funded package now will mean that Washington ultimately only delayed rather than prevented true economic disaster with its first stimulus bill. Inaction now will have a lasting impact on working-class families and anyone without savings or job security.
A second stimulus bill will require the federal government to increase its deficit spending beyond the record levels already reached this year. That is not a reason not to act. The biggest federal budget deficits in history relative to the size of the economy came during World War II, and the country fared just fine in the ensuing decades. Record deficits occurred again under President George W. Bush in 2008 as the Great Recession hit. That deficit spending continued as President Barack Obama took office. Again, robust economic growth in the following decade negated the impact of that spending.
The only time after 1969 the federal government has enjoyed a budget surplus came in the second term of President Bill Clinton, lasting through the first year of the Bush presidency that followed.
Any risks associated with deficit spending are outweighed by the risk of not providing a safety net for the millions of Americans out of work right now and their families, and the millions of small businesses at risk of bankruptcy.
Some conservatives argue that extending unemployment benefits serves as an incentive for individuals to not return to work. Most can’t return to work, anyway. The federal government will have to invest significantly in the country’s aging infrastructure if it wants to create good jobs that spark the post-pandemic economy and actually produce tangible social and economic benefits.
Right now, the number one priority should be investment in public health. Economists agree that sustained economic recovery will not be possible until the virus is contained and people can move about freely again. Years of disinvestment in public health have left the country exposed to the pandemic. There is nothing great about America, political slogans and gimme caps aside, when it comes to protecting public health. Almost all other Western democracies are doing better. There will be another new virus someday. Investing now and staying invested is vital to avoid a repeat of what we have experienced these past months.
An extension of unemployment benefits and a far better managed small business assistance program that cannot be looted by undeserving billionaires, deeply capitalized businesses, and con artists is vital. There is growing evidence of fraud that is going uninvestigated. Hundreds of billions of dollars would still be available in the original stimulus program had there been real oversight, but the Trump administration has signaled it now wants to forgive the loans without review.
Why should more than half of all restaurants, bars, and cafes, for example, now fail as businesses when they were only following emergency orders to shut down? Providing a safety net now will protect businesses and jobs, and preserve the meeting places that help define community and culture.
After public health comes public education. America’s students are at risk as educators seek to reopen in September, obligated for now to continue virtual distance learning while they struggle to make campuses and outdated buildings safe for students, teachers, and school workers. States cannot provide that essential funding. It will have to come from Washington. Failing to invest in education will produce negative consequences for a whole generation of young people and have serious long-term social and economic consequences.
It would be great in this highly contentious election year if the Trump administration and Congress could quickly reach some accommodation. That may be hoping for too much, but we should settle for nothing less.