Will America’s future following COVID-19 be a beautiful rose garden or a bed of thorns?
As usual, opinions vary with some incurable optimists proclaiming a booming future economy, a rising tide that will lift all boats. Gloom-and-doom prophets predict mass bankruptcies, millions unemployed and a many-years long recovery. No one has ever produced a reliable crystal ball, so projections are just guestimates at this point. Currently there can be no doubt the pandemic has had a disastrous effect on the population of nearly the entire world. We should not totally ignore problems in other countries, but our primary focus must be on the United States.
If the U.S. stock market is a reliable predictor, our financial future will be very bright.
While the market dropped greatly at the beginning of the pandemic, it has recovered most of its losses. However, some analysts predict a massive drop in the market’s value, a development that seems quite likely once the budget-busting COVID-19 relief program ends. Economic assistance was essential on a short-term basis, but the massive expenditures are vastly in excess of income and cannot continue forever.
President Trump apparently disagrees, believing our ever-ballooning deficits are not a problem; in fact, he has proposed more costly tax cuts. Assisting the unemployed and struggling small businesses during these challenging times is almost certainly necessary. A moratorium on evicting those who do not have the money to pay rent is critical also, but most landlords have bills to pay too so they also need protection. Big corporations and businesses can borrow money and should not require help from our government, also known as “Uncle Sugar.”
Our Treasury is borrowing heavily so we cannot afford to subsidize all businesses and rich and/or retired individuals. Doubtlessly many retired people are struggling too, but the pandemic should not have had an effect on most of them. Financial prudence requires that retirees should not receive further stimulus money. Payments for everyone were understandable initially because the unemployed needed immediate income, but there has been sufficient time to delete the names of the retired and the prosperous from the stimulus list.
Agreement on the next economic aid is currently stalled due to major disagreements on its scope with democrats favoring a $3 trillion package and republicans far less. Naturally, each side blames the other for the stalemate – politics as usual – but the unemployed need financial assistance soon, as in immediately. If a compromise is not reached quickly, the political party getting the primary blame from the majority of voters will suffer at the voting booth this November. Both parties know this so the pressure is on to assist the unemployed, but it would be foolish to continue adding indefinitely to our exploding national debt.
The Democratic Party has, with just cause, been described as the “Tax and Spend Party,” while the Republican Party has been judged prudent in financial matters. It appears their caution is dependent upon the way the political wind is blowing.
Our economy was doing OK during the last years of President Obama’s term so there was no need for President Trump’s budget-busting tax cuts, reductions that increased the national debt approximately $1 trillion – and that was prior to COVID-19.
Both republicans and democrats voted almost unanimously for the pandemic relief plan; it was necessary to provide financial assistance to the struggling millions, but taxes on those doing OK should have been raised to lessen the expensive impact of the economic aid.
After the pandemic, gigantic deficits were understandable. But it is unfortunate neither party has the political foresight and courage of civilizations of thousands of years ago, Egypt for one example. Knowing from past experiences there would be both good and bad years for crops, the Egyptians constructed huge warehouses to store grain surpluses during the good years and thus had food during the inevitable times when yields were poor.
Similar money wisdom appears to be impossible for our politicians to agree on but a workable solution is possible, providing lawmakers can convince the public while at the same time feeling the heat from many displeased citizens.
The answer could be a “balanced budget law,” a rule that would require a two-thirds majority vote to override the adopted budget. Our states follow a don’t-spend-more-than-you-take-in rule, so why can’t the federal government? There would be much screaming from those who would feel their constitutional rights were being abused, but a stable financial base is mandatory for the long-term existence of our country. Even for the prosperous U.S., bankruptcy is not impossible.
If we do not reverse our financial foolishness, we will eventually be broke. Given the expensive homes and vehicles many of our citizens own, somewhat higher taxes should not diminish their lifestyle appreciatively.
Millions of Americans have fought for and hundreds of thousands have died to preserve our country; surely a few more dollars from we taxpayers would be a cheap price for a balanced budget and a sustainable economy.
Ted Shannon lives in Mokelumne Hill and is a retired California Highway Patrol officer. He can be contacted via email at email@example.com.