Friday, White House economics adviser Joseph Lavorgna said the economic slowdown caused by the outbreak of the novel coronavirus chaos caused the lion’s share of an estimated $3.3-T budget deficit, and said that he did not believe this is the climate was to attack it.
Mr. Lavorgna, the special assistant to the President and the chief economist for the National Economic Council, said with unemployment dropping nearly 2% from July to August, that the emphasis needed to be placed on expanding the economy.
“A primary reason why these deficits look so bad is the economy was forced to shut down for 6 weeks,” he said. He was the chief US economist for Deutsche Bank for more than 20 yrs. “And when you cannot operate, you cannot have economic commerce, you cannot have tax revenues, and that explains a big part of it.
“At some point, some day, there will be a time when we need to address this longer-term fiscal situation, the president will do it. But now certainly is not the time.
“Now we need to get unemployment back to where it was before, get the job market purring even faster, getting wage growth, which was already booming, up 5% now year on year, get those trends to persist. That is going to bring in revenues, and the economy is, a good part of it, is going to fix itself. We will deal with the fiscal side at some point. I just do not think, right now, is the time to do it. It is not prudent.”
Me Lavorgna said President is spending to stimulate economic growth and limiting extraneous projects are targets.
“You have to look at the spending the President has put forward, the administration has put forward in terms of needed relief to certain selected areas of the economy and not have it go to ‘pork-barrel’, wish-list type of program spending that is inefficient, and that the context of what you need to put the spending initiatives we are putting forward.”
“Without employment and stimulation focus, idleness will continue to result in street rioting and protesting. An idle and unoccupied mind is a person’s worst nightmare and disease. This is where Congress must now focus. It is the best election year medicine that they could serve, with bi-partisan unity. This is next to a vaccine for Covid – 19.
Congress must put aside election year politics and start thinking of what is bests for their constituents – employment which puts food on the table and pays for sheltering. Disruptive partisan politicking must stop, ” said Economist Bruce WD Barren, Chairman of The EMCO/ Hanover Group.
Have a healthy holiday weekend, Keep the Faith!