Tag: U.S. economy

Now In Government Food Aid Boxes, A Letter From Trump

Millions of Americans who are struggling to put food on the table may discover a new item in government-funded relief packages of fresh fruits and vegetables, dairy and meat: a letter signed by President Donald Trump.

The message, printed on White House letterhead in both English and Spanish, touts the administration’s response to the coronavirus, including aid provided through the Farmers to Families Food Box Program, a U.S. Department of Agriculture initiative to buy fresh food and ship it to needy families.

The letter is reminiscent of Trump’s effort to put his signature on stimulus checks and send a signed letter to millions of recipients. It’s the latest example of the president blurring his official duties with his reelection campaign, most prominently by hosting Trump’s acceptance speech for the Republican nomination last week on the White House lawn. Continue reading.

U.S. government debt will nearly equal the size of the entire economy for first time since World War II, CBO finds

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Report comes after huge increase in the deficit this year as government attempted to limit coronavirus fallout

For the first time since World War II, the U.S. government’s debt will roughly equal the size of the entire American economy by the end of this year, the nonpartisan Congressional Budget Office said Wednesday.

The rapid change is largely due to the surge in new spending that the government authorized as it tried to control the economic impact of the coronavirus pandemic.

By the end of 2020, the amount of debt owed by the United States will amount to 98 percent of the nation’s gross domestic product, the CBO said. That is up from 79 percent last year. Total government debt will surpass the U.S. economy’s size next year, the CBO said. Continue reading.

Fed changes its approach to inflation, as leaders aim to navigate future crises and reach full employment

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“This change may appear subtle, but it reflects our view that a robust job market can be sustained without causing an outbreak of inflation,” Fed Chair Jerome H. Powell said Thursday.

Federal Reserve Chair Jerome H. Powell on Thursday announced a major shift in the way the central bank aims to achieve maximum employment and stable prices, marking lessons learned from the most recent economic expansion.

The new approach signals that the Fed won’t increase interest rates to respond to low unemployment levels and also won’t worry as much about low rates triggering a rise in prices.

Speaking at the Fed’s yearly economic policy symposium in Jackson Hole, Wyo., Powell emphasized achieving full employment. As the Fed debuted a long review of its monetary policy framework, the Fed concluded that inflation could temporarily run a bit over its 2 percent target if that means more Americans stay in the workforce. Continue reading.

Paul Krugman explains how life is getting ‘rapidly worse’ for millions of Americans as the GOP cheers the stock market

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Although the coronavirus crisis has brought double-digit unemployment to the United States, some affluent Americans are continuing to prosper in the stock market. Liberal economist Paul Krugman addresses that disparity in his New York Times column this week, noting how the wide gap between the haves and have-nots continues during the pandemic.

Krugman points out that earlier this week, the S&P 500 “hit a record high” — and Apple “became the first U.S. company in history to be valued at more than $2 trillion.” He quickly adds, however, that “the economy probably doesn’t feel so great to the millions of workers who still haven’t gotten their jobs back and who have just seen their unemployment benefits slashed.”

“The $600-a-week supplemental benefit enacted in March has expired, and Trump’s purported replacement is basically a sick joke,” Krugman explains. “Even before the aid cutoff, the number of parents reporting that they were having trouble giving their children enough to eat was rising rapidly. That number will surely soar in the next few weeks. And we’re also about to see a huge wave of evictions, both because families are no longer getting the money they need to pay rent and because a temporary ban on evictions, like supplemental unemployment benefits, has just expired.” Continue reading.

Markets rise as economy struggles; ‘It does not make sense’

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The expression “stock markets are not the economy” may have never been truer.

The S&P 500, an index that tracks the country’s largest publicly traded companies, has all but erased its pandemic losses and closed within a fraction of a percentage point of its all-time high Thursday. 

But far away from Wall Street, the economy on main streets in cities and towns across the country feel as if they are in tatters. Continue reading.

Self-employed won’t get to defer taxes under Trump’s payroll break

Tax directive also contains unusual ‘cliff’ cutting off any benefit for those earning more than $104,000

Millions of self-employed individuals would be left out of President Donald Trump’s move to defer payroll taxes for the last four months of the year, according to tax experts.

That’s because the executive action specifically refers to taxes paid under Sec. 3101(a) of the Internal Revenue Code, which set the Social Security tax rate at 6.2 percent for those employed by someone else. There is no similar reference to Sec. 1401(a), which requires the self-employed to pay 12.4 percent on their own wages, or both the employer and employee share of Social Security taxes.

The $2 trillion March relief package allowed companies to defer their portion of Social Security payroll taxes and pay them back in stages, half by mid-2021 and the rest a year later. That included half of the 12.4 percent rate paid on self-employment income.  Continue reading.

Here’s what is actually in Trump’s four executive orders

Washington Post logoThe details on payroll taxes, unemployment and evictions are not as generous as he made them sound.

President Trump took the unusual — and highly controversial — step Saturday of attempting to provide additional economic relief to millions of Americans on his own, without the approval of Congress.

At his golf club in Bedminster, N.J., Trump announced he was postponing payroll taxes through the end of the year, extending the unemployment “bonus” at $400 a week (down from $600), helping people “stay in their homes” and waiving student debt payments through the end of 2020. The details, however, are not as generous as he made them sound.

He is ordering a payroll tax deferral, not a cut, meaning the taxes won’t be collected for a while but they will still be due at a later date. On housing, he instructs key officials to “consider” whether there should be a ban on evictions. He also insists that state governments pick up the tab for some of the unemployment aid. Continue reading.

Trump’s Go-It-Alone Stimulus Won’t Do Much to Lift the Recovery

New York Times logoA series of executive actions will provoke lawsuits but is unlikely to stoke faster growth in an economy that has cooled this summer.

The executive actions President Trump took on Saturday were pitched as a unilateral jolt for an ailing economy. But there is only one group of workers that seems guaranteed to benefit from them, at least right away: lawyers.

Mr. Trump’s measures include an eviction moratorium, a new benefit to supplement unemployment assistance for workers and a temporary delay in payroll tax liability for low- and middle-income workers. They could give renters a break and ease payments for some student loan borrowers. But they are likely to do little to deliver cash any time soon to Americans hit hard by the recession.

Even conservative groups have warned that suspending payroll tax collections is unlikely to translate into more money for workers. An executive action seeking to essentially create a new unemployment benefit out of thin air will almost certainly be challenged in court. And as Mr. Trump’s own aides concede, the orders will not provide any aid to small businesses, state and local governments or low- and middle-income workers. Continue reading.

Robert Reich dissects Trump’s dangerous lies about the COVID economy

AlterNet logo“The recovery has been very strong,” Donald Trump said last week. Then the Commerce Department reported the U.S. economy contracted between April and June at the fastest pace in nearly three-quarters of a century, which is as long as economists have been keeping track. The drop wiped out five years of economic growth.

But pesky facts have never stopped Trump. Having lied for five months about the coronavirus, he’s now filling social media and the airwaves with untruths about the economy so he can dupe his way to election day.

The comeback “won’t take very long,” he reassured Americans on Thursday. But every indicator shows that after a small uptick in June, the US economy is tanking again. Restaurant reservations are down, traffic at retail stores is dwindling, more small businesses are closing, the small rebound in air travel is reversing. Continue reading.

Coronavirus talks collapse as negotiators fail to reach deal

The Hill logoBipartisan talks aimed at finding a deal on a fifth coronavirus bill collapsed on Friday, all-but-guaranteeing Congress and the White House will not be able to reach a compromise despite a steady uptick in cases and lingering economic aftershocks.

Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows met for less than two hours with House Speaker Nancy Pelosi(D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) as part of a Hail Mary effort to revive the negotiations on a fifth coronavirus bill, which already appeared to be on life support.

But they emerged with no progress. Instead, the GOP negotiators and Democratic leadership traded blame over the impasse, and the administration officials said they will recommend President Trump move forward with executive orders as soon as this weekend. Continue reading.