April 14, 2020
Trump claims “total authority” over re-opening economy. Governors form coalitions on east and west costs to push back.
Governors in New York, New Jersey, Connecticut, Pennsylvania, Delaware and Rhode Island have formed an east coast pact to coordinate a return to normal, while governors in California, Oregon and Washington have created a second coalition.
But this isn’t as bad as it sounds.
The Founders intended states to express the will of the people and federal government to adjudicate disputes between states and represent a united front to the world. They anticipated constant tension between state and federal governments. That was the original meaning of “Federalism”. The Civil War stripped much of this power from the states and shifted it to the federal branch.
In recent decades states ceded more of their power Washington. The lack of resistance to Obamas “legislate by executive order”, overriding Congressional gridlock, for example.
Now state government is asserting their original relationship. Democracy in action.
The $600 billion dollar Paycheck Protection Programs is on the verge of collapse. Intended to fund loans to small businesses, keeping them and their employee’s solvent during the economic shutdown. Will run out of money on Friday. States are asking for more money and Congress is looking for a fix.
Bernie Sanders dropped out of the Presidential race last week, but his supporters vow to undermine the Biden presidential campaign. Democratic progressives encouraged by increasing support from young liberal voters continue to push their agenda.
Historically, the Democratic Party fight like cats and dogs until the closing hours of their convention, then come together to support a candidate. This is especially true following years they have been out of power. If history holds, Biden will enjoy the unified support of the entire party.
The tremendous surge in the national debt has pushed the deficit – the difference between revenue, (that is, tax receipts), and the budget to record highs. That means more borrowing, driving down GDP and driving up the national debt.
This is not a good thing.
Economic distress is not limited to the Federal government. More than 2,000 cities will experience budget shortfalls. Unlike the Federal government they cannot run constant debt and deficits and are forced to increase taxes and cut spending. Look for entire cities to declare bankruptcies. Here’s a primer from Pew Trusts.
Organized protests against authoritarian government response to COVID-19 are becoming more frequent and strident. North Carolina, Michigan, and Wyoming have recently experienced organized protests at their state capitols. The looming years of economic despair are becoming clear and people are losing tolerance for extended business shutdowns, stay at home orders and increasing restraints on civil rights.
Millennials will continue to suffer in the years to come.
Their career success was undermined first by the Great Recession in 2008 and the rise of the gig economy, and now by the long-term downturn in opportunity to come. Read about it in this excellent Atlantic article: Millennials Don’t Stand a Chance.
COVID-19 is teaching a lesson about the consequences of over eating and a sedentary lifestyle. Obesity leads the list of factors leading to COVID-19 complications in the biggest study of its kind.
Eat less. Exercise more.
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