October 15, 2020
Deal or No Deal?
Do we really need more stimulus?
$2 trillion here, $2 trillion there… Suddenly, it adds up. Our national debt level has just exploded beyond $27 trillion… And if we’re not careful, we’ll soon have a debt-to-GDP ratio that looks like Greece’s once did before the onset of the European debt crisis!
In my most recent weekly podcast, American Consequences With Trish Regan, the famed economist (and medal of freedom recipient) Arthur Laffer told me he has NO interest in more stimulus…
The bills are adding up… “They’re just out having a spree on our credit card,” as Ronald Reagan used to say. They take the spending card, the taxpayers’ spending card with them everywhere they go. We don’t need any of this stuff.
We could have just given $600 billion and would have had plenty of money to bring this economy back even faster.
But it’s a political year… And lawmakers are, well, political. Washington, D.C. seems to be caught in a standoff with a deal that’s remarkably close.
Yet the White House’s proposal of $1.8 trillion is being met with a big ‘ole refusal from Speaker of the House Nancy Pelosi, who wants to see a $2.2 trillion deal. And although even members of her own party have advised her to take the deal, she seems quite adamant it’s not a deal worth taking.
In a rare interview, one that momentarily restored a little of my faith in the mainstream media (albeit very little), the CNN anchor Wolf Blitzer pushed Pelosi quite heavily, asking why she couldn’t meet the president halfway on this one, considering the challenges many Americans now face.
The House Speaker was indignant and even accused the host of trying to advance the Republicans’ agenda…
When Blitzer kept pushing, Pelosi countered with, “What I say to you is, I don’t know why you’re always an apologist – and many of your colleagues – an apologist for the Republican position.” Then the whole interview went off the rails… with Pelosi getting increasingly flustered as she spoke over the anchor.
The CNN spectacle aside, politicians on the Left like Pelosi are making one thing clear: They’re not going to give an inch. Though President Trump is happy to “Go Big!” as he tweeted, few Republicans are willing to follow that advice… And Washington is stuck in a standoff just weeks ahead of the 2020 election.
But maybe that’s not such a bad thing. Perhaps in the long run, it’s for the better. Because believe it or not, we’re actually faring pretty well these days…
Don’t Underestimate the Power of Optimisim
The unemployment rate has descended to 7.9%, roughly half what most economists anticipated at this stage, while GDP for the third quarter is expected to grow 33% according to the Atlanta Fed. Meanwhile, no matter how hard the mainstream media may try, it can not seem to stop Americans from being optimistic. At least not according to the most recent Small Business Optimism Index.
The National Federation of Independent Business released its monthly survey of small-business hiring and expansion plans this week, and amazingly, small-business confidence has climbed all the way back to where it was at the start of the year. In other words, we’re back at pre-pandemic levels. The Optimism Index, as it’s known, jumped 3.8 points to a historically high reading of 104.
Small businesses are the lifeblood of the American economy, so this improvement in confidence levels is vital. It suggests there are better things ahead, proving that the reopening of our economy (finally!) has had a significant effect on businesses, that, despite everything they’ve been through, are still predicting a strong future.
As a kid, I loved the musical Annie. I knew every song, every line… I got the 8-track when I was five years old (remember those?), and I played it nonstop. When I was 10, I earned the chance to play Annie in a local equity production. It was my first entry into showbiz, as they say… I loved every minute of it.
It wasn’t until years later that I realized how much the musical was an indictment of conservative free-market policies and a celebration of FDR’s liberal spending (proving perhaps that Hollywood really does have a big say on how history is interpreted). A belief in the future is fundamental to American success. Because despite all the socialist-style spending, the one thing FDR did do (as the play outlines so well) is provide Americans with a sense of hope…
Optimism matters. The belief that the future WILL be better is crucial to our economy. How else will people take chances and invest in themselves and the future?
Despite all we’ve been through, the administration has indicated its belief in the American people, the American spirit, and the American economy… This is partly why the small-business index is showing a historically high level of confidence.
Meanwhile, this optimism mimics the news revealed in a recent Gallup poll in which 56% of Americans reported they are better off now than they were four years ago.
This seems entirely out of line with the mainstream media’s interpretation of what is actually happening. Even Joe Biden seemed surprised by the number in an interview with a local reporter in Ohio this week…
The reporter quoted the recent Gallup poll number and asked Biden why people should vote for him. Biden didn’t quite get the number right and seemed incredulous upon hearing the news. (Perhaps he thought it was fake??) Clearly, his team hadn’t quite prepared him for this…
54% of Americans think that they are better off economically today than they were in our administration? Well, their memory is not very good, quite frankly… And in addition to that, we have a president who doesn’t share the values of most Americans.
Because if you can’t convince Americans that they’re miserable, you might as well convince them they’re bad people for voting for such an evil man as Trump…
A quick reminder, while people would love to vote for the policy AND the personality of the leader they most admire – when in doubt, sometimes it’s just the policy. The policy itself WILL affect every Americans’ bottom line.
Anyway, the big takeaway is… let Washington squabble over stimulus. They can do their thing (argue) and we’ll do ours – succeed.
The American spirit will not be crushed by the media, by bickering politicians, not even by the coronavirus itself.
Regardless of whether or not we see stimulus, we will move forward. As Annie famously sings, “Tomorrow, tomorrow, I love you tomorrow. You’re only a day away.”
P.S. Have you checked out my new weekly American Consequences podcast yet? I discuss politics, finance, monetary policy… with new big-name guests each week. And just like American Consequences, it’s free – you can sign up here.
Now here are some of the stories we’re reading…
Meltdown! Pelosi Goes Rabid On Wolf Blitzer! Ron Paul discusses Pelosi’s on-air meltdown…
States Face Monumental Challenges Readying Vaccine Distribution As states race the clock to ready their plans to vaccinate millions of people by an Oct. 16 federal deadline, they are pushing ahead with the health planning equivalent of wearing blindfolds.
Despite recessions, a pandemic, and decades of war, young people are optimistic According to a new survey, two-thirds of young people today believe that the American dream is within reach.
And let us know what you’re reading at [email protected].
Executive Editor, American Consequences
With P.J. O’Rourke and the Editorial Staff
October 15, 2020