Thread by @DianeSwonk

Where are we?

The the resurgence in COVID cases, hospitalizations and deaths is overwhelming our health care system.

Employment slowed to a crawl in Nov as temps dropped and restaurants and bars cut back or closed for good. Traditional retailers cut back or closed for good...

State and local governments shed jobs, mostly in education for the fourth month in a row.

Cases and hospitalization predictably picked up *again* as social distancing was discarded and community spread of COVID during the Thanksgiving holiday.

The percent of the labor force working from home in November edged higher. They spent online and created a false sense of security about how well the economy is holding up and the prospects for a rebound once we are all vaccinated.

States were forced to do more aggressive containment measures as people discounted the risks of COVID.

Initial unemployment claims jumped in early December, some due to a late filing of claims associated with Thanksgiving holiday week, some reflecting deeper hardships.

The ranks of those who can’t pay for the basics of life - food and shelter - rose. Lines at food banks swelled and crimes of survival - shoplifting food and diapers for babies - jumped.

States set up makeshift hospitals and rationing of beds for other emergencies intensified.

A vaccine is great news. The FDA is close to approval of an emergency use authorization. But the path to herd immunity, which is necessary given our failure to stem the spread of the disease to reopen the economy more fully, is littered with speed bumps.

State and local governments have been left to fend for themselves to actually set up vaccination sites, hire the personnel needed to do actual vaccinations & set up follow-up protocols - at least two of the vaccines require two doses, 3-4 weeks apart.

The cost of such an vaccination undertaking is estimated to cost between $7-8 billion. States have gotten $200 million and already burned through rainy day funds. This is at the same time that the hole left by the blow COVID has dealt to state and local budgets is deepening.

The logistics of vaccine distribution are complex and are already siphoning resources from other sectors of the economy. Dry ice is scarce. The first quarter risks being flat to negative.

Vaccine shortages are also possible in the spring.

The ranks of the unemp, those going hungry and about to suffer eviction grow.

We know that the rebound in growth will be less dramatic if we don’t do more to help the worst affected households and businesses with aid. The CAREs Act played a large roll in spurring the recovery in May and June. It just didn’t get us far enough into the fall.

What are we risking besides a horrific humanitarian crisis? After 6 mos of unemployment, mental and physical health suffer. Those losses could be much worse than we see in a usual recession bc of they are adding to stress on healthcare triggered by COVID.

We also know family structure, the well being of children and worst affected communities suffer. We may not see what we usually see in terms of people having to accept lower paying jobs given how many of those hardest hit are already at bottom of the pay scale.

Educational attainment is suffering across age groups and we know from other disasters - Katrina and Maria - many of those losses will be permanent. That further undermines lifetime earnings and the potential of the economy to grow.

Chronic health consequences are also mounting, which will limit the ability to work for all ages. This will further stress the health care system, raise health care costs and undermine our potential to grow and heal from the crisis.

M&A activity has accelerated, which could further consolidate employment and innovation into a few firms, undermine dynamism and our job generating capacity. I haven’t even begun to discuss the inequality that COVID has exposed and exacerbated.

Inequality fuels inefficiencies and further undermines our ability to grow. It is also deeply immoral. Yes, that is a value judgement.

If we don’t deal with these issue via fiscal policy, we could suffer much worse short and term consequences.

What is good? We know all of this. That knowledge and persistently low interest rates have changed the math of deficits and debts and enabled us a rare opportunity to dress the wounds inflicted by COVID and invest in our people and our infrastructure.

Another positive is the accelerant to productivity growth triggered by the fact that we have all finally learned to use existing technology. My mom can zoom and my husband can use the universal remote. Both have enhanced my personal productivity and that of my kids.

Ok. I am tired but relentless. I have tweeted out research on all of this. I have written on this but know reading is hard. I mean that. I am dyslexic. I am but a translator. Doing my best. Hope it helps. / Fin