The latest Democratic stimulus plan, the massive, $3 trillion Heroes Act, sets aside about a third of that total sum for aid to state and municipal governments. That’s on top of the hundreds of billions of dollars these governments have already received from the CARES Act and other measures, including money for additional Medicaid costs, mass-transit subsidies, and direct aid to budgets. Most of the new money allocated in the legislation, passed by the House of Representatives, comes in the form of unrestricted aid—cash that local governments can use as they see fit to address their budget concerns amid the Covid-19 lockdown. The National Governors Association has called for $500 billion for state governments alone to meet “budgetary shortfalls that have resulted from this unprecedented public health crisis.”
The Republican-controlled Senate has balked at these huge numbers, and with good reason. The amount that officials are seeking is likely well beyond the estimated total cost of the current recession for states and municipalities. The huge funding requests, moreover, essentially assume that the entire recession is a function of the virus and that governments deserve to be made whole for any losses, even though fiscal analysts have warned for years that another recession was coming and many states were unprepared for it. As the parties negotiate in Washington on a compromise plan, we need a realistic, focused approach that sends more aid where the virus has had a direct impact—such as on mass transit—and ties further aid to reform proposals that recognize how local government policies have created many of the financial problems that officials now blame on the virus.
The Heroes Act includes sending new rounds of stimulus checks to Americans, forgiving student debt for “economically distressed” borrowers, funding the arts and humanities, and repealing the $10,000 limit on state and local tax deductions. While those elements of the package have generated attention and controversy, the bill also sets aside upward of $1 trillion for states and cities. Added to the money that states and cities have already received, their total stimulus would surpass $1.5 trillion if the legislation passed as the Democrats proposed it. The Heroes Act is especially generous when it comes to unrestricted aid, which alone amounts to about $900 billion, to be distributed based on population, unemployment figures, and number of coronavirus cases. Based on population figures alone, states and cities would divide about $667 billion, according to the Tax Foundation. California state and local governments would share about $73 billion of that money. Texas would get $51 billion, New York and Florida $33 billion each, and Illinois $24 billion.
Consider those numbers compared with local government revenues. Last year, states collected about $1 trillion in taxes. That means that the Governors Association’s request is for aid equaling half of one year’s tax collections. In the Great Recession of 2008–2009, state tax collections declined in one year by about 9 percent, from $784 billion in 2008 to $713 billion in 2009. Then collections slumped slightly again to $705 billion the next year. When all was said and done, the cost was around $250 billion in forgone tax revenues.
What can we expect this time? Moody’s has estimated, based on what states themselves are projecting, that revenue could decline next year by 15 percent, or $150 billion. Local government revenues, which amounted to about three quarters of a trillion dollars last year, will also fall, but at a slower rate at first because municipalities rely more on property taxes, where changes in valuations are phased in over time. If the economy does not recover rapidly, the cost of this downturn over four or five years could reach $500 billion. That’s a lot, but not out of line with what analysts were predicting the next recession would bring, even before anyone had heard of Covid-19.
A study by Moody’s published in October 2017, for example, estimated that the “fiscal shock” of the next recession—if it was severe—could cost states about $137 billion in the first year, not far from what a virus-accelerated recession may cost next year. As Moody’s observed: “One of the few great inescapable facts in the field of economics is the business cycle. No matter how high-flying an economy might appear, another recession is coming sooner or later.” Another study from 2019, looking just at California, calculated that a severe recession could cost that state alone up to $170 billion in revenues over four to five years. The state is facing a $54 billion deficit next year, but in 2008, it had to contend with a $40 billion budget hole that had nothing to do with the virus. Some states, moreover, were already facing a deficit. In January, for example, New York governor Andrew Cuomo projected a $6 billion budget gap—the result of years of soaring costs—during what was still an economic expansion. When you consider those numbers within the context of what state and local officials are asking for now, it’s clear that they are essentially angling to be held harmless.
Americans have been debating the effectiveness of COVID-19 lockdowns for months now. To what extent did broad business closure and stay-at-home orders—as opposed to narrower interventions and voluntary precautions—reduce virus transmission, thereby avoiding hospital crises, buying time to develop testing and tracing capacity, and preventing deaths that otherwise would have occurred? Conversely, to what extent can loosening those restrictions be expected to increase transmission, leading to more infections and deaths?
According to The New York Times, that debate has now been settled. "Data show," the Times reports, that "lockdown delays cost at least 36,000 lives." Researchers at Columbia University "found" that "even small differences in timing would have prevented the worst exponential growth," the Times says.
"If the United States had begun imposing social distancing measures one week earlier than it did in March, about 36,000 fewer people would have died in the coronavirus outbreak," the paper reports. "And if the country had begun locking down cities and limiting social contact on March 1, two weeks earlier than most people started staying home, the vast majority of the nation's deaths—about 83 percent—would have been avoided, the researchers estimated." The "cost of waiting to take action," the Times concludes, was "enormous."
Already we see a problem with the way the Times has framed the issue, since "the United States" never "impos[ed] social distancing measures," and "the country" never "lock[ed] down cities and limit[ed] social contact." Instead of a single national response to COVID-19, we have seen a wide variety of local and state responses.
Worse, by conflating social distancing not only with coercive government interventions but with the most sweeping kind, the Times ignores everything else that was happening as politicians decided how to fight the epidemic. Americans were learning about the threat posed by the COVID-19 virus, especially to people with serious preexisting medical conditions, and they were reacting accordingly. They were taking to heart advice about avoiding crowds, minimizing travel and social contact, and working at home when feasible. The same scary increases in COVID-19 cases and deaths that motivated politicians to impose lockdowns also motivated people throughout the country to take precautions.
Stay-at-home orders intended to curb the spread of the coronavirus could end up causing “irreparable damage” if imposed for too long, White House health advisor Dr. Anthony Fauci told CNBC on Friday.
“I don’t want people to think that any of us feel that staying locked down for a prolonged period of time is the way to go,” Fauci said during an interview with CNBC’s Meg Tirrell on “Halftime Report.”
He said the U.S. had to institute severe measures because Covid-19 cases were exploding then. “But now is the time, depending upon where you are and what your situation is, to begin to seriously look at reopening the economy, reopening the country to try to get back to some degree of normal.”
However, Fauci also cautioned states against reducing social distancing measures too quickly, adding they must take “very significant precautions.”
A roughly $21 million Brooklyn field hospital authorized by the de Blasio administration at the height of the coronavirus pandemic opened and closed without ever seeing one patient, according to city officials.
The Brooklyn Cruise Terminal in Red Hook was one of several sites across the five boroughs converted into a medical facility as a way to relieve the city’s overburdened hospital system as the COVID-19 crisis mounted.
Hundreds of doctors wrote a letter to President Trump this week asking him to end the coronavirus shutdown, saying it is a “mass casualty incident” spurring deaths from other factors such as substance abuse and suicides.
The letter, shared online, estimates about 150,000 Americans each month that the shutdown remains in place would have had new cancer detected, millions more are missing dental exams that could discover problems linked to heart disease, while others are experiencing domestic violence like child abuse.
“Suicide hotline phone calls have increased 600%,” the letter sent to the president on Tuesday read.
Before Covid-19, a recent US census estimated that 5.2% of US workers (8 million people) worked from home. I’d personally say that number likely increased by a factor of 10, based on Zoom’s daily active user growth (10 million in December 2019 to over 300 million in April 2020), the world forced by disaster into an almost fully remote workforce for many sectors, including the entertainment industry and services like yoga and personal training. As companies like Salesforce and Twitter make working from home permanent, many are already dreading our remote future.
Kevin Roose of the New York Times recently warned that remote work leads to isolation, and removed the serendipity of the office. Nick Martin of the New Republic warned against the push of people to be “more productive” working from home – that we should not be expected to use the hours of commute time that we’re saving to do more work, but live healthier lives, a sentiment echoed by Roose’s colleague Taylor Lorenz.
And they’re right. Hustle culture is poisonous: the idea we must endlessly strive for personal and professional productivity is degenerative to society. But to assume it’s entirely tied to tech-based work is missing a larger problem of the corporate workforce – the religious attachment to work, that work should give our lives meaning.
Getting America to full employment again won’t be easy. As a recent study by the University of Chicago’s Becker-Friedman Institute shows, the COVID-19 lockdown has changed the dynamic of working. Some workers are now collecting more dollars under the CARES Act, the law that funds payroll protection, than they did when they worked. Those workers may not be eager to return to jobs. Whatever temporary funds they are receiving, employers for their part hesitate to rehire because they don’t know whether they will have cash for wages when their COVID-19 benefits expire. This mismatch suggests unemployment will linger.
What’s the best way to proceed? And what pitfalls must be avoided? The past can be a guide. The record of both the United Kingdom and the United States a century ago offers revealing evidence — and suggests the basics of a plan for strong recovery.
As World War I ended, workers in Britain and the United States struggled to find their footing. Then, as now, a pandemic compounded the recovery challenge; influenza ravaged both nations. Many veterans were mildly or seriously disabled.
Britain attempted to move out of its labor crisis by creating and expanding payments for the unemployed, then a new idea. Authorities viewed such payments as unlikely to generate huge costs — they expected the equivalent of the “V” recovery discussed today in the U.S. But work in Britain at the time was tough, with shop conditions few would live with today. “The dole,” as the unemployment payments were known, made returning to the factory floor even less alluring. English workers didn’t have to be lazy — just logical — to choose to stay home. And since the booming recovery anticipated didn’t materialize, sustaining those workers proved very expensive.
My old boss Michael Chertoff, former secretary of the US Department of Homeland Security, went on Face the Nation this past weekend where he opined that K-12 schools should not reopen until there is a vaccine for the Wuhan virus. Now, I have enormous respect for Sec. Chertoff. I believe he is one of the smartest people I’ve ever known. But his opinions on this topic should carry no more weight than mine or yours.
The reality is that it is time for the evidence and common sense to determine what states do in the fall in terms of reopening our public schools. Virtually all of the evidence on the Wuhan virus indicates it has little impact on the five-year-old to 18-year-old school age population. Most states have had few, if any, deaths of school-aged citizens. For example, according to the Ohio Department of Health Coronavirus Dashboard, of the nearly 1,800 deaths in Ohio, not one person under 19-years-old has died.
The Center for Disease Control and Prevention (CDC) noted that ‘relatively few children with COVID-19 are hospitalized, and fewer children than adults experience fever, cough, or shortness of breath.’ The CDC reports that nationwide, of the more than 93,000 deaths, 0.0 percent occurred in the 0-14 age range and 0.1 percent occurred among those 15-years-old to 24-years-old. Based on this evidence, it is safe to say that our kids are simply not at much risk of harm from the pandemic. At worst, they face less risk than they have faced for decades from the seasonal flu, which has killed 174 kids this flu season.
As Purdue University President Mitch Daniels stated when he reported that Purdue would be fully open in the Fall, the focus for the university is on protecting the professors and workers with risk factors such as obesity, diabetes, and respiratory conditions. Most of those adults working at Purdue, like America’s K-12 teachers and staff, are under the age of 65. For those between 24-years-old and 64-years-old, the percentage of deaths nationally is just 20 percent of the total. Most of those dying from the pandemic are retired senior citizens, with 59 percent of all deaths occurring in those 75-years-old or older.
Novavax has begun the first phase of the trial in which 131 volunteers in the cities of Melbourne and Brisbane will test the safety of the vaccine and look for early signs of the vaccine’s effectiveness, the company’s research chief Dr. Gregory Glenn said.
“We are in parallel making doses, making vaccine in anticipation that we’ll be able to show it’s working and be able to start deploying it by the end of this year,” Glenn told a virtual press conference in Melbourne from Novavax’ headquarters in Maryland.
The doctor in charge of a Bay Area, Calif. trauma center said the state should end its lockdown orders after an “unprecedented” spike in suicide attempts amid the coronavirus pandemic.
“We’ve never seen numbers like this, in such a short period of time,” Dr. Mike deBoisblanc, head of trauma at John Muir Medical Center, told local station ABC7. “I mean, we’ve seen a year’s worth of suicide attempts in the last four weeks.” He added that he thinks “it’s time” to end the state shutdown.
