Trump Tries to Kill Covid Relief
Is it
ignorance, or is it cynicism?
By Paul Krugman
Opinion
Columnist
- Dec. 10, 2020
The next few months will be terrible.
Several thousand Americans are now dying from Covid-19 every day; given the lag
between cases and deaths, the daily toll will almost certainly rise through the
end of this year, and if people are careless over Christmas it could surge even
higher in the new year. Economic recovery has stalled, with employment still
down almost 10 million from pre-pandemic levels.
The most we can hope for at this point
are policies that mitigate the suffering, getting us through the horror while
we wait for widespread vaccination. And a few days ago it seemed possible that
we would in fact get some good news on the economic front. A bipartisan group
of senators seemed close to agreement on a Covid relief bill that would fall far short of what we
should be doing, but would be much better than nothing.
Then the lame-duck Trump administration
intervened — destructively.
Before I get to what’s wrong with the
administration’s proposal and why it may do a great deal of harm, let’s talk
about what the goal of economic policy ought to be right now.
I still keep seeing
news reports that frame congressional arguments about relief bills as a debate
about “stimulus.” But stimulus is what you do when unemployment is high because
people aren’t spending enough. And that’s not the problem we face.
Think about it. Why are there still two
million fewer workers in “food services and drinking
places” than there were before the coronavirus struck? It’s not
because people can’t afford to eat out or go to bars. It’s because eating out
and gathering in bars are dangerous activities. In many parts of
the country these activities are, rightly, either banned or sharply restricted;
even where they’re allowed, many people, understanding the risks, choose to
stay home.
The role of economic policy in this
situation isn’t to bring those jobs back while the pandemic is still raging —
we actually don’t want a resurgence of employment in high-risk sectors until
vaccines are widely available. What we should be doing, instead, is minimizing
the suffering while we wait. That is, the issue isn’t stimulus, it’s disaster
relief.
What should this relief involve? It
should provide support for the unavoidably unemployed, sustain businesses
through the dark months ahead and aid state and local governments that are
suffering severe declines in revenues and that will otherwise be forced to make
drastic cuts in essential services.
And no, this last problem isn’t
restricted to blue states. In fact, six of the seven states expected to face
the biggest revenue declines have Republican governors.
House Democrats have
always been willing to pass a relief bill along the lines I’ve described. And
as I said, until a few days ago the Senate appeared to be moving toward a bill
that, while much smaller than Democrats wanted, would be better than nothing.
The main obstacle seemed to be the determination of Mitch McConnell, the Senate
majority leader, to include a poison pill — a blanket exemption of businesses
from any liabilities related to exposing their workers to Covid-19 risks. But
observers were hopeful that an agreement could still be reached.
Then came the Trump administration
intervention — a proposal from Steven Mnuchin, the treasury
secretary, that McConnell quickly endorsed even though it was disastrously
wrongheaded.
I’m not sure whether the coverage of
this discussion has fully explained just how bad Mnuchin’s proposal is. Many
headlines emphasized the cost, a bit over $900 billion, which was similar to
that of the emerging bipartisan bill, suggesting that the administration was
weighing in with something positive.
In fact, however, the administration
proposal completely eliminated the most important piece of any relief deal —
expanded benefits for the unemployed — replacing it with one-time $600 checks
that would be sent to everyone.
Again, think about it. For Americans
who won’t be able to return to work while the pandemic is still raging, a
one-time payment of $600 is grossly inadequate, while for those who haven’t
lost their jobs it’s unnecessary. It’s true that people might spend some of the
grant, boosting overall demand — but overall lack of demand isn’t the main
problem right now.
So what is Mnuchin thinking? We can’t
rule out sheer ignorance. It is, sad to say, entirely possible that, nine
months into the pandemic slump, administration officials still don’t understand
the basic logic of relief. Or they may be in thrall to the thoroughly debunked myth
that unemployment benefits actually cause high unemployment.
Or maybe this proposal reflects the
expiring administration’s special combination of delusion and cynicism.
President Trump is still trying, in ever more desperate and destructive ways,
to overturn the results of the election. And in his madness he may imagine that
he will gain more politically from sending everyone another check with his name
on it than from helping those truly in need.
Whatever the motivation, Mnuchin’s
proposal couldn’t have come at a worse time. It may well undermine the economic
relief millions of Americans need.
Paul Krugman has been an Opinion columnist
since 2000 and is also a Distinguished Professor at the City University of New
York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences
for his work on international trade and economic geography. @PaulKrugman
