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Nobel economist says he’s done the math — and the risk Trump and McConnell pose to the economy is ‘terrifying’

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Donald Trump and Mitch McConnell (Screen Capture)

Very much a student of New Deal economics, New York Times columnist Paul Krugman has often stressed that helping the unemployed during an economic downturn not only helps those who are out of work — it also benefits the economy on the whole. Krugman made that point many times during the Great Recession, and in a column published this week, the liberal economist warns that the “coronavirus recession of 2020” will become even worse if unemployed Americans don’t receive the help that they need.

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“I’m not sure how many people realize just how much deeper the coronavirus recession of 2020 could have been,” Krugman explains. “Obviously it was terrible: employment plunged, and real GDP fell by around 10%. Almost all of that, however, reflected the direct effects of the pandemic, which forced much of the economy into lockdown. What didn’t happen was a major second round of job losses driven by plunging consumer demand. Millions of workers lost their regular incomes; without federal aid, they would have been forced to slash spending, causing millions more to lose their jobs.”

But with that federal aid having expired, Krugman adds, the “coronavirus slump” could deepen and go from bad to worse.

“The suffering among cut-off families will be immense, but there will also be broad damage to the economy as a whole,” Krugman warns. “How big will this damage be? I’ve been doing the math, and it’s terrifying.”

The economist continues, “Unlike affluent Americans, the mostly low-wage workers whose benefits have just been terminated can’t blunt the impact by drawing on savings or borrowing against assets. So, their spending will fall by a lot. Evidence on the initial effects of emergency aid suggests that the end of benefits will push overall consumer spending — the main driver of the economy — down by more than 4 %…. The expiration of emergency aid could produce a 4% to 5% fall in GDP.

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According to Krugman, the coronavirus pandemic decreased GDP by “around 10%” in the U.S. — and without help for the unemployed, it will fall even more.

“What we’re looking at now may be another shock, a sort of economic second wave, almost as severe in monetary terms as the first,” Krugman argues. “And unlike the pandemic, this shock will be entirely self-generated, brought on by the fecklessness of President Trump and — let’s give credit where it’s due — Mitch McConnell, the Senate majority leader.”

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Krugman concludes his column by warning that as painful as the Great Recession was, the “coronavirus recession” might inflict more long-term damage on the U.S. economy.

“Not having learned anything from the last crisis almost seems to be a requirement for Republican economic advisers,” Krugman laments. “So, at the moment, we seem to be headed for a Greater Recession — a worse slump than 2007-2009, overlaid on the coronavirus slump.”


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GOP lawmaker indicted for allegedly choking woman with Ethernet cable and threatening to ‘hog tie’ her

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On Monday, The Washington Post reported that Kentucky state Sen. Robert Goforth has been indicted for strangulation and assault, after allegedly attacking a woman with an Ethernet cable.

"Earlier this year, a woman said Goforth, 44, strangled her with an Ethernet cable to the point where she had trouble breathing and threatened to 'hog tie' her, according to a police report reviewed by the newspaper," said the report. "The charges have renewed calls from local Democrats for Goforth, a staunch supporter of President Trump who had previously been accused of sexual assault, to resign from his seat. Neither he nor his attorney, Conrad Cessna, immediately responded to requests for comment from The Washington Post."

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‘Maybe by the end of October’: Trump claims COVID-19 vaccine just weeks away

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President Donald Trump predicted a vaccine would be available before the Nov. 3 election.

The president gave himself an A-plus on his response to the coronavirus pandemic that has killed 200,000 in the U.S., and told "Fox & Friends" it would soon end.

"We're rounding the corner, with or without a vaccine," Trump said. "They a hate it when I say it, but that's the way it is. We're rounding the corner on the pandemic, and we've done a phenomenal job -- not just a good job. Other than public relations, but that's because I have fake news. You can't convince them of anything, they're a fake, but we have done -- on public relations, I give myself a D. On the job itself, we take an A-plus with the ventilators and now with the vaccines that are years ahead of schedule."

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Trump tells Fox & Friends that RBG’s dying wish may be a hoax written by Adam Schiff

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President Donald Trump on Monday told "Fox & Friends" that he believed Supreme Court Justice Ruth Bader Ginsburg's dying wish may have been a "hoax" concocted by Democrats.

During the interview, the president was asked about Ginsburg saying that she did not want to be replaced until after the 2020 presidential election.

"I don't know that she said that, or was that written out by Adam Schiff and Schumer and Pelosi," the president said. "I would be more inclined to the second."

As CNN fact checker Daniel Dale notes, Ginsburg's dying wish was "conveyed by the granddaughter."

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