«TThe recovery has been very strong, ”Donald Trump said on Monday. Then the Commerce Department reported that the U.S. economy contracted between April and June at the fastest rate in nearly three-quarters of a century, which is as long as economists have followed. This decline wiped out five years of economic growth.
But pesky facts never stopped Trump. Having lied for five months about the coronavirus, he is now filling social media and waves with untruths about the economy so he can be wrong until election day.
The return “will not take very long,” he reassured Americans on Thursday. But every indicator shows that after a slight uptick in June, the US economy is once again recovering. Restaurant reservations are down, traffic in retail stores is dropping, more and more small businesses are closing, the small rebound in air transport is reversed.
What is Trump’s plan to revive the economy? The same that he has been insisting for months: just “reopen” it.
He wants the public to believe that the shutdown orders that started in March caused the economy to slow in the first place, so reversing them will bring the economy back.
Garbage. It was the virus that caused the recession, and its resurgence is pushing back the economy. The virus is resurfacing because governors reopened prematurely, before the virus was under control – at Trump’s repeated insistence.
The cause and effect sequence is clear. The virus has increased the most in states that were among the first to reopen, such as Florida, South Carolina, Texas and much of the rest of the solar belt.
Due to this resurgence, many states are suspending their reopening plans and some are reimposing restrictions. But these restrictions are not the reason the economy is slowing. They are the necessary consequence to allow the pandemic to get out of hand.
Even the White House Coronavirus Task Force concludes that 21 states have epidemics severe enough to warrant further restrictions.
Notably, the economy is slipping again even though the government has injected trillions of dollars into it. What happens when the money stops?
We’re about to find out. Senate Republicans can’t come to an agreement among themselves, let alone House Democrats, on more funding, while Trump says “we really don’t care” to reach a spending deal.
This means that as of this week, more than 30 million Americans will no longer receive $ 600 in additional weekly employment benefits. As a result, tens of millions of people will not be able to make rent or mortgage payments. Others will be hungry, including the children. The economy is likely to slide even further.
The White House argues that the extra unemployment benefits have discouraged workers from seeking employment, as some receive more money in benefits than they would earn while working.
“We don’t want to create disincentives at work,” says Trump adviser Larry Kudlow.
No more rubbish. A study by Yale economists finds “no evidence” that people who have lost their jobs are choosing to remain unemployed because of the additional federal aid. In fact, “workers faced with [unemployment] expansions generally seem faster to resume work than others, not slower. “
People cannot go back to work because they have very little work to do. Fourteen million more people are unemployed than there are jobs.
In fact, the extra perks have kept some 3 million employees going because the money has gone into the pockets of the people who spend it, thus supporting economic activity. Reducing these benefits will put less money in consumers’ pockets, leading to the loss of millions of additional jobs.
Lies about the economy are harder to spot than lies about the coronavirus, as the virus’s grim death toll is painfully apparent while the economy is complicated. But Trump’s economic lies are no less blatant, and they are about to cause a lot of unnecessary suffering.
Republicans in Trump and the Senate may not like it, but it’s the painful truth.