One thing that Trump has always been able and willing to do is spend other people’s money for his own personal gain. Some of that gain has been financial; much of it has been reputational. And if there is one thing the United States now needs more than ever at a rate barely contemplated ever before is for the federal government to spend and spend and then spend some more. Cancel everything. Bail out everyone. And Trump will lead the charge, or at least take credit for not standing in its way.
This is not meant to be facetious. From 1929 to 1933, the Hoover administration adamantly stood against bailouts and spending while the economy unraveled and unemployment soared to 25 percent. The incoming Franklin D. Roosevelt administration initially cut budget spending in the belief that a balanced budget was needed to fight the Depression. FDR quickly realized that only massive spending on an unprecedented scale could stem the damage. In 2008-09, it took months for Congress and the White House to agree to financial bailouts and then a stimulus package totaling about $800 billion that was still inadequate. Today, within a week of recognizing the crisis, Congress is working on multiple bills that amount to over $2 trillion in the form of direct checks to Americans, interest-free, forgivable loans to small businesses provided they do not fire their workers, and bailouts for decimated airline, hospitality and other industries. In addition, the Federal Reserve is utilizing its almost unlimited balance sheet to shore up banks, municipal bonds and money market funds.
Via Treasury Secretary Steven Mnuchin, Trump has been making clear to Congress, to House speaker and nemesis Nancy Pelosi and to Senate Majority Leader Mitch McConnell that he wants to go even bigger and bolder, including more paid sick leave, a payroll tax holiday and student loan debt deferrals. Having dear-leadered themselves into a Trump bear hug, congressional Republicans who might otherwise balk at these measures have nowhere to go and nothing to fall back on. Having ignored ballooning deficits for the past few years, they already were on weak ground arguing for fiscal discipline, but the vestiges of their free-market ideology are no match for this current crisis.
Trump was never a budget hawk and has never touted the line that government shouldn’t spend the way most of his party has. But as president pre-corona, he was largely amenable to traditional Republican Party prescripts about cutting social spending, maintaining a robust defense budget and paring back the federal bureaucracy along with tax cuts for corporations. Post-corona, he is morphing into something rather different. He is embracing spend baby spend, and that is precisely what we need. Senator Bernie Sanders, who will not get the Democratic nomination, would have endorsed all of this. In a crisis, we are all socialists, and given that Trump never cared what he was, becoming that is painless.
Source: politico.com
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