Sunday, August 9, 2020

Trump's "orders" aren't laws, and would mess up the economy even more

Look, the president's "actions" yesterday on our economic crisis are things he cannot legally do. You cannot change tax law or change payments under certain programs or send out new money for new programs without an act of Congress. But let's leave those legal questions aside for now, and instead look at how absurd those actions would be.

I wanted to show you a great Twitter thread from an economic advisor to Elizabeth Warren (aka - someone who really has to know his stuff), who shows just how empty Trump's promises are. We'll start with the provisions on preventing evictions and the alleged suspension of the payroll tax, neither of which seems to do anything new.

The evictions item is basically "have Cabinet agencies try to figure something out to help people pay their bills." Which isn't going to do much for the millions of Americans who can't pay their bills today, and likely won't be in place for September.

On the payroll tax - even if employers do hold off on taking out the 7.65% you pay for Social Security and Medicare for the next 4 months, you'll have to pay all that back in one paycheck in January 2021. So not only does it cost Social Security and Medicare funding in the short run, it causes a major drop in take-home pay at the start of next year. Lose-lose!

And that's if you are working in the first place! We know tens of millions of Americans still are not.

"But Jake, those people will be kept afloat by Trump's move on unemployment benefits." Yeah, that scheme really doesn't work either.

To go further, note that the added unemployment benefits would be paid under the Stafford Act, which deals with people who lose their jobs due to a natural disaster, with the money reimbursed via FEMA. That's different than the previous $600-a-week add-on, which was done by the US Department of Labor through the already-existing unemployment laws.

In other words, even if Trump's request on unemployment had any force of law it would:

1. Cut unemployment benefits by at least $200 a week

2. Require states to pass laws to pay an extra $100 a week to every unemployed person. Which takes time to get in place and is money they don't have.

3. Would be done as a separate disaster assistance program, which means agencies like the Wisconsin Department of Workforce Development would have to set up yet another program (without the funding to do so) and figure out how much people would get in these expanded unemployment benefits. Which likely means more delays in getting checks.

And oh yeah, it uses FEMA money right as hurricane season is ramping up. Brilliant!

So if anything, this screws things up even more, and won't allow people to get the aid they need today. That'll mean a whole lot of Americans will continue to be cut off, and will continue to cut back on their spending, which will make for an even larger hole in economic activity.

But this is how Trump rolls. Say some things that sound good, but never actually take the steps to get those things done.

That's the real bottom line. It's just Con Man Trump BS'ing about things he can't do, in an attempt to snooker low-information types to believing he's trying to deal with the economic problems CAUSED BY HIS OWN FAILURES TO DEAL WITH COVID-19. It's really insulting to anyone with an ounce of pride.

And why is he this desperate? Because he is losing, bigly.

EDIT- It's an even worse idea than you thought.

Also, do states have to add $100 before they get anything extra from the Feds? How many won't do that at all? (answer, most of them).

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