May 2020 – Page 8 – Lone Candle

Why the US shouldn’t let states go bankrupt

Posted on May 8, 2020 by Lone Candle

“Senate Majority Leader Mitch McConnell’s suggestion that maybe states and cities should just go bankrupt amid the coronavirus-induced economic crisis they’re facing has not been particularly well-received. A big part of the issue: As the law stands right now, states can’t declare bankruptcy.

But the controversy points to a broader problem states across the country are facing — their costs have skyrocketed and their revenue has plummeted, and unlike the federal government, they can’t run a deficit. They’ve got to balance their budgets so that they take in what they put out. And right now, a lot of states are sounding the alarm that they’re going to need to make deep spending cuts unless the federal government steps in.

New Hampshire Gov. Chris Sununu, for example, warned his state could need to make $500 million in cuts next year. Missouri Gov. Mike Parson estimated he’ll have to cut $700 million and has already put a pause in $227 million in state funding. Los Angeles Mayor Eric Garcetti has said he plans to furlough thousands of city workers.

The problem — at least with most states and cities — isn’t that they’ve managed their finances particularly poorly. It’s that they’re in the midst of an unprecedented crisis.

“States have balanced budget rules to keep them from doing things that are fiscally imprudent. In practice, when we’ve hit recessions that’s led to difficulty,” explained Kim Rueben, director of the state and local finance initiative at the left-leaning Urban Institute. States are able to raise more tax money when the economy is doing well, not when it’s doing poorly, even though that’s often the time when it needs money for things like unemployment and health care most. Many states have rainy day funds to cover downturns — the 50-state total recently hit $75 billion.

“Not all of the states were good, but on average, they had actually put money away to try and handle what is your normal economic cycle,” Rueben said. “What we are entering into right now is not normal in any way, shape, or form.””

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“the first state to put in place a balanced budget amendment in its constitution was Rhode Island in 1842, and other states followed. As of 2015, 46 states plus Washington, DC, have some sort of balanced budget requirement, which basically means they can only spend as much revenue as they’re bringing in. How stringent these requirements are varies by state; some experts say the only state that doesn’t have to balance its budget is Vermont”

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“The United States has a system where many of the country’s priorities are handled at the state and local level — the local school systems, colleges and universities, infrastructure, prisons and jails, the health care systems. The federal government is supposed to work in partnership with states and cities by design, the idea being that they’re closer to the ground on understanding the needs and wants of their citizens.

“You want the financing of them to be solid,” Leachman said. “It’s in the national interest to make sure that that happens, and it’s another reason why it should be a no-brainer for the federal government to provide the fiscal relief that states and localities need right now.””

Mitch McConnell is gaslighting Democrats (again)

Posted on May 7, 2020 by Lone Candle

“Republicans know such aid is necessary just as well as Democrats. They say in the press that these are concessions, things they are giving up, but why should anyone else adopt that absurd framing?

By theatrically “conceding” money for hospitals, Republicans get the optics of a bipartisan achievement while ensuring that they define the limits of the possible.

Now House Speaker Nancy Pelosi is saying that it wasn’t a concession at all to give up funding for states, that governors are just being “impatient,” and that the next stimulus bill will contain state and local aid “in a big way.” She envisions a thoughtful, phased approach, based on demonstrated need. But there’s little reason to think Republicans will cooperate.

Think back to the debt ceiling fight of 2011. Raising the debt ceiling was also something every independent analyst agreed was necessary to keep the economy healthy. But Republicans framed it as a Democratic ask, something for which they could extract enormous concessions. They were entirely willing to gamble with the economy.”

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“When Democrats pushed for state aid and McConnell suggested that it was a “blue state bailout,” an attempt to rescue fiscally irresponsible blue-state governors who had let their pension obligations get too large, he knew full well that it was bullshit. There is no moral hazard in a pandemic. There’s no point means testing states. It’s not a reward to states to bolster their budgets when consumers are literally being told by the government to stay home. It’s one reason the federal government exists.

And red states need money too — there are, after all, red-state governors pleading for help.

It makes no sense, but McConnell’s not trying to make sense. He’s just trying to put Dems on the defensive and force them to fight for the basics. He wants to frame state aid as a concession to Democrats and send a signal to the right-wing base that Democrats are up to something shady. He doesn’t give a rat’s ass about pension obligations. This is a 1,000 percent cynical maneuver. (Now Treasury Secretary Steven Mnuchin has picked up this nonsense and run with it.)

The same goes for McConnell’s sudden concern that stimulus spending might raise the deficit too much.

Oh, please.

More than almost any other purported GOP principle, deficit concern comes and goes depending on the party’s immediate interests. It was nowhere to be found in 2017 when McConnell’s own Congress passed a giant tax cut for corporations that will add $2.6 trillion to the deficit over the next 10 years. It was nowhere to be found when Trump ran up the deficit, or when George W. Bush, George H.W. Bush, or Ronald Reagan ran up the deficit.”

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“for the last 15 years, McConnell has heard pundits tell him that it’s risky to obstruct too much, attack too hard, violate norms too flagrantly, or act too openly against the national interest for partisan gain. Pundits wring their hands endlessly about such things.

Democrats have heard and internalized those messages. They worry about how they look to the media and political class. But McConnell has completely ignored them, and it has redounded to his benefit again and again.

When he refused to hold confirmation hearings on Obama’s Supreme Court nominee Merrick Garland in 2016, everyone in the political ecosystem (outside of conservative media) warned him of the dangers, the grave risk to comity and tradition and institutional integrity. He blew them all off. For his troubles, he got Brett Kavanaugh.

(Last month, McConnell said that he would happily hold a confirmation vote on a Trump Supreme Court nominee, even in the last year of a Trump presidency. Critics accused him of hypocrisy. He didn’t care.)

McConnell used the filibuster to block everything Obama tried, and then when Democrats killed the judicial filibuster, he used that to pack the federal bench, winning on both sides.”

Has Sweden found the best response to the coronavirus? Its death rate suggests it hasn’t.

Posted on May 6, 2020 by Lone Candle

“using the Our World in Data website’s coronavirus statistics, helps put Sweden’s situation in perspective. It compares countries’ rates of coronavirus deaths per 1 million people.
As the chart shows, Sweden is actually faring worse than other Scandinavian nations and even worse than the United States, which has the highest number of confirmed total cases in the world.”

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“Following the advice of the country’s chief epidemiologist, Anders Tegnell, the Swedish government chose not to impose strict lockdowns, curfews, or major border closings because the government felt it would hurt the economy and would only push the crisis further down the road.”

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“while experts say the vast majority of Swedes followed the government’s social distancing guidelines and voluntarily stayed home, those who continued to drink at bars and shop at stores likely spread the disease around.”

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“Sweden’s public health officials now admit: That “more than 26 percent of the 2 million inhabitants of Stockholm will have been infected by May 1.””

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“Where Sweden does compare favorably to the US is the country’s death rate when compared to New York City’s (not the whole US). About 12,000 reported deaths as of April 28 in a city of 8 million is surely worse than 2,300 deaths in a country of 10 million.

But there are three main reasons why the Big Apple would be worse off than the entire country of Sweden, experts say.

The first is population density: New York City has more than 38,000 people per square kilometer, while Sweden has just 25 people — meaning it’s harder to socially distance in New York.

Second, some hospitals in New York City were overwhelmed while Sweden still has about 250 hospital beds unoccupied. There are indications, though, that the hospital surge in New York City is declining.

Finally, there is significantly more international travel to New York City than there is to Sweden, which means there were more opportunities for people from countries suffering from severe outbreaks to spread the virus to the city than to the European country.

But when zooming out, it’s clear that Sweden as a whole is worse off than the US as a whole. That could, of course, change down the line, but any current arguments that Sweden got its outbreak response right are premature at best and dangerous at worst.”

Trump is keeping meatpacking plants open — but employees are scared to show up for work

Posted on May 5, 2020 by Lone Candle

“More than 3,000 meat processing workers across the country have tested positive for the virus in recent weeks, leading to additional spread in their communities, and more than 15 have died. Dozens of facilities have been forced to close temporarily or indefinitely.

Executives at America’s largest meat and poultry processing companies have warned of disastrous consequences for consumers should these facilities stay closed: Tyson Foods chair John Tyson said on Sunday that the “food supply chain is breaking.” Livestock prices have plunged because farmers have nowhere to send their animals for slaughter, while the price of consumer-ready meat has spiked.

While supply chain experts don’t anticipate a nationwide shortage of meat in light of the recent closures, they say there could be spot shortages at local grocery stores of certain types or cuts of meat.

But reopening the plants could come at great cost to their workers, who assert that their companies are doing too little to protect them from the virus. They say companies are failing to enforce social distancing on the production line and only recently beginning to offer additional protective equipment, if they do so at all.

Many employees also say they don’t have paid sick leave, health benefits, or substantial savings, offering them little assurance should they get infected and incentivizing them to work while sick.”

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“Trump’s executive order instructs the Department of Agriculture to ensure that meat and poultry plants can continue operating uninterrupted as much as possible while abiding by guidance for Covid-19 preparedness issued by the Centers for Disease Control and Prevention and the Occupational Safety and Health Administration. The executive order leaves room for the agency to provide personal protective equipment to workers or issue additional regulations concerning worker safety — but it doesn’t explicitly provide any additional worker protections.”