The future looks bleaker day by day, as the knock-on effects of the pandemic and political incompetence, intransigence, shortsightedness, and general disarray become more obvious.
In a few short days the stimulus money will run out. McConnell is holding a second stimulus hostage for immunity from accountability for nursing home operators who failed to provide adequate staffing, housing, nursing care they had contracted for and as a result many more people died. Such immunity from responsibility he would extend to the entire corporate community as well.
Along with Stone’s commutation, such a demand shreds the concept of the rule of law.
It appears that no stimulus package will pass before the August recess, and at best, one might arrive in October, possibly September if a miracle of bipartisanship were to occur.
So what happens when the stimulus ends and nothing replaces it?
The economy craters is what happens.
A number of converging and intersecting economic factors explicitly point the way, and one doesn’t need a degree in economics to comprehend it.
With the infection rate increasing at a ferocious rate, states have had to halt or roll back reopening. In combination with the stimulus ending, there will be a lot of businesses, having held on by their fingernails to this point, needing the reopening to survive, will go bankrupt. Those bankruptcies, along with the halt or retreat in reopening will cause unemployment to increase, increasing the burdens on state and local governments.
At the same time, eviction protection will expire in many places, and many places have no eviction protection. Without continued stimulus, several things will occur by the first week of August. Many families will be unable to pay their rent or pay the backlog, and will be evicted by landlords operating out of habit. Likewise, many small businesses will be unable to meet their obligations and be forced to close their doors, as mentioned.
Landlords will operate under the assumption that people need housing and will pay the current rates, without taking into account that the pool of people who need housing is much larger than the pool of people who can afford housing, and that pool of renters shrinks daily. The lag time between evictions and the realization that far fewer can afford the rents demanded will be around two months, I think, but by then it will be too late for many of the marginal REITs, whose bankruptcies will put stresses on banks. Combined with the loss of office space and retail rentals, real estate will no longer look quite so attractive.
Now let’s go back to the pandemic itself.
In two weeks the hospital systems in Texas, Florida and much of the South will begin to collapse. That isn’t a guess, it is predictable based on what we know of the virus. We have just experienced days of record numbers of infections, we know that a percentage of them will be hospitalized, a further percentage will require treatment in ICUs within the next two or three weeks. Many of the hospitals are at, near or have exceeded capacity already, any large increase in patients will very soon overstress the system. As families are evicted, controlling the spread of the virus, already exceedingly difficult, will become impossible, and we can expect more days of record infections.
More importantly, not only are we running out of beds where they are needed most, we are running short of personnel. After six months of non-stop work and exposure to the virus, medical personnel are dying disproportionately to the needs, and the survivors are exhausted. There is a genuine limit to how long one can continue to work under such stressful circumstances, facing and seeing death every day.
Then there is the school reopening looming, which without doubt will spark yet another resurgence of the virus. Beyond the physical risk, sending children back to school is an expensive thing to do, and without the stimulus, many will be unable to afford spending what they usually do, with the result of much lower economic activity in the school supplies sector at the time of their highest expectations for business. Again, marginal stores and companies in the sector will fail or require help to survive.
All this adds up to lower revenues for state and local governments coupled with higher demands. Plus preparations for voting in November. State and local governments need bailing out far more than any corporation does.
Now set all that against the backdrop of massive, nationwide protests of police brutality met with example after example of the police responding with more brutality.
Then realize the leadership of federal agencies has been allocated to unqualified Trump loyalists or left vacant.
Add a Congress on vacation rather than working on the critical issues facing the nation, creating a sense of abandonment of the citizenry to whatever fate their personal economics has in store for them.
Add nearly four years of relentless efforts to delegitimize federal government, endless lies, callous decisions, and the stoking of divisiveness along multiple lines, not the least racism.
Add hundreds of thousands of new homeless, millions more unemployed, tens of millions of angry, frightened, frustrated people with a lot of time on their hands.
Add obvious GOP efforts to suppress voting.
Add likely record-breaking heat waves in August and a natural disaster or two.
Add a loss of faith in the rule of law.
What you end up with is a recipe for civil war, especially if the November vote is seen as tainted by either side. Not a given, but the risks are far too high for comfort. Angry, frustrated, frightened people who think their government and system is corrupted beyond repair and has abandoned them in favor of the wealthy have historically risen against such to correct injustice and inequality.
It doesn’t have to be this way.
A very strong stimulus package directed at the citizenry is what is needed to keep the economy going. Consider direct payments to individuals and families as the fertilizer necessary to grow the next economic crop.
Corporations don’t need any more direct payments to them if the money is directed towards the citizenry instead. They will get most of it anyway as people use the cash to pay for their necessities.
Keeping citizens in their homes is a win for everyone. Keeping children safe, fed, clothed, and housed is a win for everyone. Giving people free money so they can spend it in an economy utterly dependent on consumer spending is a win for everyone.
But we don’t have much time left in which to act, in which to force Congress to act.
Not much time left...for too many things, there’s not much time left.
Call, email, tweet your political leadership on all levels to get a stimulus passed before the recess, or demand they stay in place until they do. Demand more cash for citizens and far less for wealthy corporations.
