The USA's In The ICU

Unless Congress gets their shit together fast, there's not going to be an American economy left after COVID-19 lockdowns.

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, 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. Across the globe, health officials are struggling to cope with the growing number of patients, with the World Health Organization noting that while it required three months to reach 100,000 cases, it took only 12 days to hit another 100,000.

The resulting economic meltdown, which is sending several million workers streaming into the unemployment line, is outpacing the federal government’s efforts to respond. As the Senate on Friday raced to complete work on a financial rescue package, the White House and key lawmakers were dramatically expanding its scope, pushing the legislation far beyond the original $1 trillion price tag. 

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.

Next week, the Labor Department will likely report that roughly 3 million Americans have filed first-time claims for unemployment assistance, more than four times the record high set in the depths of the 1982 recession, according to Bank of America Merrill Lynch. That is just the start of a surge that could send the jobless rate spiking to 20 percent from today’s 3.5 percent, a JPMorgan Chase economist told clients on a conference call Friday.

Estimates of the pandemic’s overall cost are staggering. Bridgewater Associates, a hedge fund manager, says the economy will shrink over the next three months at an annual rate of 30 percent. Goldman Sachs pegs the drop at 24 percent. JPMorgan Chase says 14 percent.

Amazingly enough, despite everything I've been warning about since Trump took over, the reality is far, far worse.  Unless Congress passes the mother of all stimulus packages and mobilizes things within days, not weeks or months, we're in a no-shit depression that will last years.

We're talking hundreds of small businesses go away for good, they don't come back, and 25% of the workforce is out of work, and the solution at that point is going to be "as much stuff gets automated as possible because it'll be cheaper."

So either we take a deep breath and take the plunge into a multi-trillion dollar economic rescue package, or the economy collapses and we use that as the starting point once COVID-19 is dealt with.

The NY Times makes is very clear:

Any bailout plan will come too late to avoid a large increase in unemployment. The federal government’s failure to prepare for the arrival of the coronavirus, particularly the lack of large-scale testing, has forced policymakers to shut down many kinds of commercial activity. California and New York have ordered most workers to stay home.

A proposal to send $2,000 to every American would help, but the government needs to do more for those who lose jobs by expanding unemployment benefits. In most states, the benefits cover about 45 percent of lost wages for low-income workers, and a lot of workers don’t qualify. Congress can get help to those who need it most by requiring states to raise the minimum benefit and to expand eligibility, both at federal expense. The government also should offer partial unemployment benefits: Companies could shift some workers to part-time arrangements, and the government could supplement their salaries.

There is no need to choose among the various kinds of aid that Congress is considering. The abrupt plunge in the nation’s economic fortunes has no obvious precedents; it requires a massive response. Send checks to every American. Lend money to every business. Strengthen the social safety net. The risk of doing too much is greatly outweighed in this moment by the consequences of failing to do enough.

The correct answer right now is D) All of the Above.

But remember and keep in mind the most critical part of this disaster: Donald Trump is in charge.  He's lost control, and as I've said for weeks now, he's going to overreact with astonishing federal emergency powers and some sort of national quarantine order, or worse, do nothing more than what the GOP is offering, a mealy-mouthed bailout where the rich get the money and tens of millions get nothing whatsoever, because doing anything more would be a tacit admission of his place as the absolute worst leader in the country's history.

Some people aren't going to survive the national lockdown, should it come to that. Shortages and being unable to deal with the new normal are going to cause hardships for those with no ability to adapt, and it's going to be something people aren't going to be able to handle. Even without COVID-19, they're going to be evicted, lose everything, and end up on the streets in the middle of a depression caused by a pandemic with no safety net.

And they will be lost.

Good luck, everyone.

We're going to need a miracle.

Odds are very good that the cost of that miracle will be mind-numbing.