Deficit spending unsustainable in the long run
If you are among those who have not lost their jobs because of the COVID-19 epidemic, congratulations. Perhaps you share the widespread opinion that the current “lock down” of the economy should continue, to keep everyone safe.
How would you like the government to collect your share? That is, your share of what it will take to support those laid off or perhaps fired altogether in order to keep many American businesses closed.
We’ll do the math for you: About 30 million people in our country have lost their jobs because of COVID-19. That leaves about 133 million working. For them to pay their laid-off neighbors even at a minimum-wage rate, each working person will have to chip in about $3,400 a year.
That is at the federal minimum wage. Some states are higher (California is $13, Washington state is $13.50 and — you guessed it — Washington, D.C. is highest, at $14).
So, again, how do you want the government to collect your share of supporting people without jobs because of the coronavirus shutdown?
Of course, we are not being serious. The government would never, ever attach the wages of those with jobs in order to support the unemployed. But support such as that through state unemployment compensation programs and the federal CARES Act has to be paid for, somehow.
Our solution in the United States has been to print more money. We call it deficit spending and it has increased the national debt to more than $25.8 trillion. If you have a calculator, you can determine your share of that. Sit down, first.
The bottom line is that the COVID-19 lock down is unsustainable, and not just in the long run. We simply cannot afford to maintain an economy on this basis.
Clearly, we have to get back to business across the United States. That must be done very, very carefully.
But it does have to be done.