Image by Gerd Altmann from Pixabay
May 7, 2021 –
The coronavirus crisis could have been stopped where it started in China. But the Chinese Communist Party concealed the truth, eliminated the evidence, lied and has been blaming everyone from Italy to the U.S. military.
Now, China is more of a threat. Indeed, published reports indicate China’s objective is to surpass the U.S. and to be dominant economically and militarily.
The U.S. economy is finally off life support after becoming the best in history following three years of robust growth, roaring stock market and historically low unemployment. The Trump principles laid the foundation for tremendous economic growth after COVID-19 when the unemployment rate jumped above 16 percent.
You know the salient reason:
The coronavirus pandemic that originated in China has resulted in many deaths and economic havoc. Facing government shutdowns, countless businesses and citizens have been hurt financially. Twenty-six million American workers had once filed for unemployment.
Congress and the Federal Reserve kept putting stimulus in the nation’s economy with the support of President Trump for the Paycheck Protection Program that was out of money for seven days.
Another stimulus bill for small business, hospitals, and coronavirus testing — $484 billion dollars was signed into law by the former president. Treasury had already disbursed the equivalent of 14 years in small business loans just in the previous two weeks.
Calculators everywhere are breaking down. In 2020 alone, the year’s red ink was staggering — in excess of $4 trillion. The total tab of anti-coronavirus stimulus funds to U.S. taxpayers was $2.7 trillion.
Politicians keep planning more bailouts.
Governors in the high-tax states also beg for dollars. New York Gov. Andrew Cuomo and other governors want federal-government aid to the tune of $500+ billion.
They’re again pushing for tax cuts in high-tax states, including California and New York, that Speaker of the House Nancy Pelosi tried to force into the original stimulus package.
Flawed decision-making in Congress and by governors
Are politicians handling the COVID-19 crisis the right way? No.
Countless small businesses complained they have been ignored. The funds were quickly depleted — the criteria for getting funds was flawed.
Much of the coronavirus bailout for small business was exploited by big companies and universities that were already luxuriating in cash.
In the $350-billion small business package, 94 publicly traded or big private companies got $300 billion.
Major universities were set to get a lot of the cash, too. Harvard University was scheduled to get $8.7 million even though it already had a $40-billion endowment fund.
Other approved university recipients, such as Stanford and Princeton, also have huge endowments but were also to get money intended for small businesses to save jobs.
President Trump asked Harvard to decline the money, but the university refused. So, he had to intervene and he withheld the funds. The universities got the message and accepted it with grace, as President Trump later acknowledged.
He asked the publicly traded companies and other big companies to return the cash. Burger chain Shake Shack earlier agreed to give back $10 million.
President Trump’s bully pulpit worked. Now, restaurant giant Kura Sushi will return $6 million. Ruth’s Chris Steak House will repay $20 million.
Embarrassed by a Fox Business report on this nonsense, the Treasury Department tightened the rules — too late — after disbursing the money.
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Published reports indicate even strip clubs have received taxpayer money while many essential businesses have been locked out of loans.
A vital part of commerce — the nation’s food supply chain — is under threat unnecessarily because state governments have closed their department of motor vehicle offices and shut down driver training schools.
This means truck drivers cannot obtain drivers’ licenses as the driver shortages continue nationwide.
Politicizing the stimuli
The nation is polarized politically and Democrats are politicizing the stimuli for socialist causes.
Speaker Pelosi held up the first stimulus package for 16 days as she pushed for non-related items in coronavirus funds to promote their agenda — from mandating climate-change studies — to forcing airlines to pay for carbon offsets (but not for the employees) — to massive union giveaways.
With Republicans opposed to all the Democrats’ pork-spending unrelated to the current crisis, debate raged in Congress. That’s why most of the money was slower than necessary in flowing.
Economic downturns are caused in part by psychology and the nation’s collective psyche.
Economic downturns are caused in part by psychology and the nation’s collective psyche. That’s why Democrats also politicize the coronavirus by pushing irrational fears in the liberal mainstream media to cause an economic meltdown and change public opinion.
They even accused him of xenophobia — the fear and hatred of strangers or foreigners — after he banned travel from China to stop the horrifying spread of the coronavirus.
Why? They are continually striving to bring down the president. But he proved to be ahead of the curve, especially now after a Hong Kong study: The COVID-19 cases in China have ostensibly been four times higher than the country claimed.
The Trump Administration tirelessly worked to obtain and distribute medical supplies to patients in hospitals. But Democrats launched yet another congressional committee investigation into the handling of the crisis by the leader of the free world.
Furthermore, Gov. Cuomo and other governors demand handouts. However, local and state government governments are aready dangerously in debt with unbalanced budgets because of huge unfunded public-employee pensions.
The federal debt is also out of control as evidenced by the U.S. Debt Clock.
Common sense
These problems can all be cured if politicians, university presidents, CEOS of big companies and voters get a heavy dose of common sense.
But it will necessitate considerable efforts in old-fashioned, nonpartisan economic patriotism.
Meantime, everybody seems to forget two very important points about the stimulus money for small business, which weren’t available to many other businesses because the fund was easily depleted by big business and universities.
Already, many businesses have been getting checks in “forgivable loans” to keep workers on the payrolls for the time-being. But for these businesses, they now know accepting the loans is a huge risk to them.
By the time all the nation’s closed businesses can fully reopen, probably they’ll have already spent all the money on employees, so then they soon won’t have any money to keep employing their workers.
This also means the relief checks for recipient businesses will be a totally wasted exercise. Why?
By the time they’re ready to rehire, the loans will not be forgivable. So you can count on smart business owners to pay off their loans as if they never got the money in the first place.
Many essential businesses — in addition to truck-driving schools and DMV offices — are shut down under orders from the governors. To be facetious, the governors have forced good “non-essential” businesses to close but allowed “essential businesses” like liquor, lottery and pot stores to remain open.
After reopening for business, many of the companies anticipate controls on how well they will be allowed to run their operations.
For instance, bars, restaurants and gyms will likely be limited to minimal numbers of customers because of social distancing. Even if they become profitable, of course, they will face closure once again if the coronavirus gets new life as epidemiologists expect.
Leading economist’s perspective
“Unfortunately, the Coronavirus Aid, Relief and Economic Security Act (CARES) might have better been labeled Project Brigadoon, because it emphasizes subsidizing businesses to maintain pre-existing payrolls, union contracts and the like, and assumes the economy can be reawakened to its condition in February,” wrote leading economist Peter Morici.
Why?
“Unemployment benefits that exceed weekly pay encourages larger companies to lay off employees and for those workers to wait for old jobs to return, but many businesses are permanently closed or scaled back. Many loans the Treasury, Small Business Administration and Federal Reserve have underwritten will fail, and grants to keep workers in place will prove absolutely wasted,” he explained.
(The Biz Coach publishes his analyses here.)
Something’s gotta give
From the song, “Something’s Gotta Give,” here are apropos lyrics:
Something’s gotta give, something’s gotta break
But all I do is give and all you do is take
Yes, something’s gotta give.
Here are the obvious conclusions:
The impact of the coronavirus has been devastating. But the red ink before the COVID-19 outbreak coupled with the continuous ill-advised approaches by poor political and government decisions, and money-grabbing by big companies, has contributed to more massive waste.
Stop the madness.
The U.S. economy will break under all the stress and the nation is on its way to become subservient to China — unless economic issues are mitigated. Voters and consumers should implement consequences for the bad public-policy decisions. The November elections are just around the corner.
From the Coach’s Corner, see more public-policy articles.
“If you don’t want your dog to have bad breath, do what I do: Pour a little Lavoris in the toilet.”
-Jay Leno
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