Best Medicine: Open Up The Economy — Stimulus Will Provide Short Run Booster Shot – Forbes

Someone once observed that the power to legislate is the power to package. No better an illustration of that than the current legislative attempts to pass a second coronavirus relief bill. Democrats have pushed for major grants to states with serious budget problems (inc. NY, CA, IL). Republicans are opposed to using taxpayer dollars to bail out certain states and borrowing more money to finance it. Now Congress is considering two separate bills, one which provides more PPP and unemployment benefit payments but no lawsuit protection and one which contains the legal protection firms want but also contains the state bailouts that Democrats want. To get everything each side wants legislators will have to pass both bills.

In a recent survey of NFIB members, 25 percent indicated that they could not survive six months without assistance. That assistance could come in two forms, higher sales (or any sales at all) for many firms subject to government mandated business restrictions and shifts in consumer spending due to the virus or passage of a relief bill that makes additional PPP funds available and other financial assistance programs. With new vaccines already being deployed, more financial assistance is needed to support small businesses over the next few months until business restrictions are no longer necessary. Consumers have piled up billions of dollars in savings ($2.5 trillion accumulated to date) but can’t get out to spend it or are afraid to go out because of fear of contracting the virus. Sales are a much better “cure” than taxpayer funded (with debt) grants and transfers.

Thirty percent of the owners reported lower employment compared to year-ago levels (11 percent significantly lower). Only 8 percent reported higher employment. Over 30 percent have job openings but 47 percent (85 percent of those who tried to hire in November) reported few or no qualified applicants for their open positions, this with 16 million workers still unemployed (compared to only 5 million when the unemployment rate was 3.5 percent). However, these firms will not be able to hire any workers if they are not in business, and hundreds of thousands of our 6 million employer firms are at risk of failing before the economy can be fully opened up as the population reaches herd immunity from the vaccine.

Thirty-six percent of owners plan to encourage their employees to get vaccinated, 26 percent aren’t sure whether or not they will. Fifty-six percent said they will get the vaccine as soon as it is available. As the vaccine is successfully administered, interest in participating will rise as this is the only available hope for ending the damage being done by Covid-19. Eighty-four percent are concerned that their employees might catch the virus, a very disruptive event for firms with few employees. With the vaccines, we can start to put this ugly economic chapter behind us in 2021.

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