We're In A Recession - And Trump Is Making It Worse

The nation is now in a deep recession. It didn't have to be this way.

If Donald Trump had listened to those who warned him about the Coronavirus, and acted before it got to the United States and began to spread, the recession (and the public health crisis) could have been avoided.

But he didn't act. He called it a hoax, and even after the virus reached this country, he delayed acting for several months. When he did act, it was not enough.

Now he is busy making both the recession and the pandemic worse by demanding the states reopen their economies. Many states did what he wanted and reopened, but it was too soon -- before the virus had been controlled. That has resulted in the Coronavirus raging across the country. And it means the recession will be much longer in length (because the economy can't be fixed until the virus is controlled).

Here's how former Labor Secretary Robert Reich describes the mess Trump has put the nation in:

Trump and businesses demanded America “reopen” to revive the economy. But we’ve  reopened too soon, before Covid-19 is under control. So we’re needing to close or partly close again, which will prolong the economic downturn and wreak even more havoc on millions of Americans’ livelihoods.

It never should have been a contest between public health and the economy, anyway. The economy has always depended on getting public health right. And we still haven’t.

Trump has downplayed the risks. He got in the way of governors trying to keep people safe. And now all of us are paying the price.

Brace yourself. The wave of evictions and foreclosures in the next 2 months will be unlike anything America has experienced since the Great Depression. And unless Congress extends extra unemployment benefits beyond July 31, we’re also going to have unparalleled hunger.

Eviction protections for federally subsidized properties run out at the end of July. In some states that enacted their own moratoria on evictions, renter protections are already running out. One study estimates that 19 to 23 million renters, or 1 in 5 people who live in renter households, are at risk of eviction by September 30th.

The people most likely to be evicted are Black and Latinx people, single mothers, people with disabilities, formerly incarcerated people, and undocumented people. This is systemic racism playing out in real time.

Meanwhile, delinquency rates on mortgages have more than doubled since March.

Unemployment itself is different than what we saw back in March and April. Today’s layoffs are permanent, the result of businesses throwing in the towel or permanently slimming down.

In the public sector, loss of state tax revenue is running up against state constitutions that bar deficits. This is putting vital public services on the chopping block – schools, childcare, supplemental nutrition, mental health services, low-income housing, healthcare – at a time when the public needs them more than ever.

In April and May alone, states and localities furloughed or laid off some 1.5 million workers, about twice as many as in the entire aftermath of the Great Recession a decade ago. These cuts will be just the tip of the iceberg if the federal government doesn’t provide more fiscal aid for states and localities.

Let me remind you: Expanded unemployment benefits are set to expire by July 31, leaving at least 21 million unemployed Americans with a 60% income reduction and no stimulus check to fall back on. 

To make matters worse, over 16.2 million households have lost employer-provided health insurance. The Census Household Pulse Survey shows large losses in income in coming months, along with high food and housing insecurity.

So what’s Trump’s and Mitch McConnell’s response to this looming catastrophe?

Do nothing. 

Don’t extend supplemental unemployment benefits beyond July 31, when they’re due to expire. 

Don’t help states and cities. 

Reject the HEROES Act, passed by the House of Representatives to keep struggling families afloat and the economy from going into a tailspin.

Trump has even asked the Supreme Court to strike down the Affordable Care Act. If the Court agrees, 23 million Americans will lose their health insurance, and the richest 0.1 percent of households with annual incomes of over $3 million will receive tax cuts averaging about $198,000 per year.

This is lunacy. The priority must be getting control over this pandemic and helping Americans survive it physically and financially. Extra unemployment benefits must be extended. 

The HEROES Act must be signed into law. Moratoriums on evictions and foreclosures must be extended. If it’s necessary to go back to sheltering in place to contain this pandemic, we must be willing to do so.

This shouldn’t be controversial. It’s the bare minimum of what our government must do to prevent an even worse economic and human catastrophe. 

Anything less is indefensible.