In Focus: Trump’s Disastrous Coronavirus Response, Volume #3
March 24, 2020
The coronavirus pandemic in the United States is getting worse because of President Trump. Full stop. The seeds of this public health disaster were planted on President Trump’s first day in office.
Volume #3: Trump’s Fragile Economy Left Americans Vulnerable
Workers are being laid off at an unprecedented pace; the stock market has plummeted to the point of erasing all gains made since Trump’s inauguration; and the economy is almost certainly heading toward a recession.
There’s no question that Trump’s mismanagement of the coronavirus crisis severely worsened the pandemic’s impact on our economy. His failure to fully accept the severity of the moment and take action early worsened the spread, and his numerous incorrect claims unnecessarily rattled financial markets.
But our current economic troubles were a long time coming. Part of the reason our economy was so vulnerable to coronavirus is that many people were already hurting and struggling, and most Americans hadn’t felt any benefits from Trump’s economy. Wages were stagnant and costs were too high, so when the crisis hit, there was no buffer. Tax cuts for the rich and wealthy corporations failed to trickle down to workers. Factories and farmers struggled because of Trump’s reckless trade policies. And now, Trump’s short-sighted economic policies weakened some of the tools available to fight the downturn.
The coronavirus outbreak is hurting sectors that were already stretched to their breaking point by Trump’s reckless trade policies and broken promises:
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U.S. manufacturing was already on unstable footing when the coronavirus hit. Manufacturing hasn’t kept pace with the overall economy, and industrial output fell by 1.2 percent last year. In fact, U.S. manufacturing was in a mild recession for the entirety of 2019, as factory production shrank by 1.3 percent. And now, the weakened manufacturing and transportation sectors have slowed the supply of vital products amid the coronavirus pandemic.
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Farmers were struggling because of Trump’s reckless trade policies and false promises about increased purchases. While Trump continued to claim he had saved U.S. agriculture, farm bankruptcies increased by nearly 20 percent in 2019, and Trump’s own Department of Agriculture said that it expected farm debt in 2020 to rise to a record $425 billion.
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The retail industry cut more than 75,000 jobs last year and closed more than 9,300 stores, a huge spike from the previous year.
Trump’s economic policies benefited the rich while leaving millions of Americans vulnerable to the impacts of the coronavirus outbreak:
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More than half of American jobs are at risk and millions have already lost jobs or hours because of the coronavirus outbreak, which only exacerbates the struggles for working families. About half of Americans already live paycheck to paycheck and many worry daily about being able to pay their bills, as household debt hit a record high of $14 trillion at the end of 2019.
Trump’s economy is built on shaky foundations of short-term stimuli and corporate debt:
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The coronavirus outbreak has already begun to take a toll on consumer spending, which was a rare bright spot and one of the few factors keeping Trump’s economy on stable footing.
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Corporations racked up $19 trillion in debt that made the economy more vulnerable to a downturn after spending the money they got from Trump’s tax cuts on stock buybacks for themselves and their wealthy shareholders. Despite Trump’s promises, corporations did next to nothing to boost workers’s paychecks.
Trump’s short-sighted economic policies weakened some of the tools available to fight the downturn:
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Despite inheriting a strong economy, Trump racked up $1 trillion deficits by pushing massive tax cuts that didn’t provide a sustained economy boost to benefit workers like he promised.
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Trump forced the Federal Reserve to cut interest rates because of his reckless trade policies, leaving it with little room to lower rates even further and half as much firepower as it did going into the last recession.
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Trump’s tax law eliminated provisions to help companies avoid laying off workers during an economic downturn in order to help fund a bigger cut to the corporate tax rate.
The bottom line: Trump created a fragile economy that was especially vulnerable to the downturn that resulted from the coronavirus outbreak. Despite his promises, the gap between the richest Americans and everyone else grew bigger than ever under his watch, making it more difficult for working Americans during this economic downturn. Once the coronavirus hit, Trump’s lies and failed response only made things worse.