First identified in Wuhan, China in December 2019, COVID-19 has dramatically altered how America, as well as the rest of the world, operates. Described as “the new normal,” everyday life during COVID-19 entails wearing masks, social distancing, and testing. Despite the magnitude of the fiscal response and enforcement of safety measures, the United States’ initial response to the pandemic left hundreds of thousands dead and millions of jobs lost (The Hub, 2020). Specifically, President Trump’s actions in understating the degree of the crisis caused turmoil throughout the country. 

The preliminary response to the pandemic was muted; rather than immediately banning travel to the United States and instituting stay-at-home orders, President Trump downplayed the danger of COVID-19. Leaked soundbites from February 7th have the president quoting that it is “more deadly than... your strenuous flus,” although he presented it to the public as just that— “a little problem” that was to be treated “like a flu” (Liasson and Ordoñez, 2020). Instead of making testing widely available and immediately stockpiling resources for frontline health workers, as other countries were doing, the United States was static. It took 55 days to reach a testing rate of 1 test per 1000 residents, making the United States one of the last countries to meet this threshold. (Zamarripa, 2020). 

The administration’s failed public health response is directly correlated to their mishandling of the consequent economic crisis. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump on March 27th, 2020, and entailed an economic relief package of over $2 trillion dollars (U.S. Department of the Treasury,  2020). The act also authorizes employee retention credit, in order to prevent job loss, payroll tax deferral, and payroll tax support for employees (U.S. Department of the Treasury, 2020). Although the CARES Act was the largest economic response the world has ever seen, its funding distribution mechanisms failed to aid the public where they most needed it. People lost benefits that come with being formally employed, including health insurance for employees and immediate family, paid sick leave, and reimbursement of partial expenses. Furthermore, since the funds were disbursed through the IRS, “an estimated 12 million Americans who do not typically file federal taxes will be required to do so or submit a non-filer form” (Nuñez and Ahmad, 2020). Some found it difficult to file at all, given the lack of volunteer tax income sites and the complications with online assistance. People without social security numbers (approximately 16.7 million Americans, including legal residents), self-employed and gig economy workers, and some essential workers are receiving little to no aid. Three years of eliminating safety nets—including a 12% budget cut to the U.S. Department of Health and Human Services, a 10% cut to the CDC, and measures to undermine the Affordable Care Act—dramatically hurt preventative measures Americans could have taken to protect themselves  (Zamarripa, 2020). In this way, the president’s continuous downplaying of the pandemic, as well as his actions over the years, led to a lack of focus on the health implications of millions of Americans. This fiscal support is also unsustainable; rather than establish and cushion health programs, the administration was flailing to prevent deaths by pumping money into the economy. Their short-term stimulus response was also how they approached the crisis at the non-federal level. 

During the onset of the pandemic, the federal government failed to provide aid to states and localities, forcing them to “cut payrolls for more than 1 million [government] employees”  (Zamarripa, 2020). Quarantine, unemployment, and forced business closures also led to a demand shock; essential businesses, including grocery stores and pharmacies, saw an increase in demand, whereas clothing, furniture, and other non-essential businesses saw a decrease  (Bauer et al, 2020) In this sense, states had to cope with declines in local tax revenue, leading to budget crises across the country  (Zamarripa, 2020). Safety protocols also hampered industrial spending, financially harming the employees of the steel production, manufacturing, and mining industries through budget and payroll cuts (Bauer et al, 2020). The $150 billion encased in the CARES Act under the Coronavirus relief fund—meant to cover necessary and unpredicted expenditures for states and eligible localities—failed to adequately supply funds to combat the severity of the crisis. When petitioned for more, President Trump turned it into a partisan issue. He was quoted as saying that “all of the states that need help are Democratic,” so allocating funds would be unfair to Republicans  (Zamarripa, 2020). The clear partisan bias the president has demonstrated extends to his actions throughout the pandemic; his skepticism about the effectiveness of masks, supporting non-mask wearing right-wing cohorts, and doubting Dr. Anthony Fauci’s stance on mask-wearing. His biases, questioning of science, and state-level missteps only continue to prove his incompetence in handling the administrative response to the pandemic. 

Although consumer spending and national output have slowly been recovering as the country has been reopening, small businesses still face economic struggles. While the Paycheck Protection Program established by the CARES Act “provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits,” it isn’t nearly enough to sustain businesses for the duration of the pandemic (U.S. Department of Treasury, 2020). Their expenses outweigh the funding they were provided to stay open. Compared to January, revenue is still “down by 47.5 percent in the leisure and hospitality sector, 16.4 percent in the education and health services sector, and 14.1 percent in the retail and transportation sector; aggregate small business revenue across all industries had fallen by 19.1 percent”  (Bauer et al, 2020). Small businesses employ nearly half of all private sector workers and represent the majority of businesses in the United States, making these statistics damning. Steps must be taken to stabilize revenue, “not only to avoid costly layoffs and firm closures, but also because reduced revenue will result in diminished investment, which can compound the future output and income damages of a recession”  (Bauer et al, 2020). Similarly, although the unemployment rate has decreased to 7.9% from its high of 14.7% in April, the number of people without jobs has remained elevated; they just aren’t looking for them due to potential illness, childcare responsibilities, or issues with transportation. These forms of discouragement have left a large part of the labor force in limbo (Bauer et al, 2020). 

 Seven months after the initial response, President Trump was diagnosed with COVID-19 on October 2nd, 2020, shortly after hosting an event at the White House Rose Garden to announce his nominee for the Supreme Court. At the event, guests were seen mingling sans masks and multiple tested positive for COVID-19 afterwards. Continuing to downplay the severity of COVID-19—despite his clear difficulty breathing—President Trump diagnosis has yet to have any profound impacts on the economy. The market reaction was fairly muted; although stocks were down, the effect can be attributed to the temporary shock of President Trump’s diagnosis. Seemingly recovered during the final presidential debate, any serious impacts on the market are unlikely. 

Given the lack of long term stock market or health implications, it is improbable that President Trump will change his reactions or approach to the pandemic going forward. His response to his loss to former Vice-President Joe Biden in the 2020 presidential election corroborates the same behaviour; he refuses to admit where the administration has been going wrong. The continual failures of President Trump’s administration caused the American public to vote him out; hopefully going forward, the pandemic will be better handled under a new administration who learns from the failings of the last. 

Sources

Hub staff. “COVID-19's Historic Economic Impact, in the U.S. and Abroad.” The Hub, 16 Apr. 2020, hub.jhu.edu/2020/04/16/coronavirus-impact-on-european-american-economies/. 

Liasson, Mara, and Franco Ordoñez. “Trump Knew Seriousness Of The Coronavirus Early On, New Book Says.” NPR, NPR, 9 Sept. 2020, www.npr.org/2020/09/09/911188322/trump-knew-seriousness-of-the-coronavirus-early-on-new-book-says. 

Zamarripa, Ryan. “5 Ways the Trump Administration's Policy Failures Compounded the Coronavirus-Induced Economic Crisis.” Center for American Progress, 3 June 2020, www.americanprogress.org/issues/economy/news/2020/06/03/485806/5-ways-trump-administrations-policy-failures-compounded-coronavirus-induced-economic-crisis/. 

Bauer, Lauren, et al. “Ten Facts about COVID-19 and the U.S. Economy.” Brookings, Brookings, 18 Sept. 2020, www.brookings.edu/research/ten-facts-about-covid-19-and-the-u-s-economy/. 

Council of Economic Advisors. Evaluating the Effects of the Economic Response to COVID-19. Aug. 2020, www.whitehouse.gov/wp-content/uploads/2020/08/Evaluating-the-Effects-of-the-Economic-Response-to-COVID-19.pdf. 

“U.S. Department of the Treasury.” The CARES Act Works for All Americans | U.S. Department of the Treasury, 14 Oct. 2020, home.treasury.gov/policy-issues/cares. 

Stephen Nuñez and Halah Ahmad, opinion contributors. “Where the CARES Act Went Wrong.” TheHill, The Hill, 18 Apr. 2020, thehill.com/opinion/white-house/493458-where-the-cares-act-went-wrong.