President Trump solves economic problems in the sprint race

Difficulty in reopening schools

The current climate is a challenging one for President Trump, whose approval ratings are falling. However, he still does better in polls on the economy than his Democratic rival Joe Biden. According to a recent WSJ/NBC News poll, 54% of voters approve of how President Trump is handling the economy, even as his overall approval rating drops to 42%.

“If the president wants to see the economy on a new trajectory by early October, his aides will have to make the most of every opportunity. And the next six weeks are critical to that effort.”

Michael Strain - Director of Economic Policy Studies at the American Enterprise Institute

Compared to his opponent Joe Biden, President Trump is still highly regarded by voters in handling economic issues. Photo: NBC News

Having schools open by Labor Day (September 7) is perhaps the most important thing right now, prompting the Trump administration to put pressure on local governments to find ways to reopen schools, even as major universities across the country have announced plans for online learning for the new admissions season. “You can’t have an open economy while schools are closed,” said Michael Strain, an expert on the economy. “Local policymakers seem to want both, but that’s impossible. In many cases, parents can’t go to work with their kids at home. And for those who are both at home with their kids and working, productivity is going down.”

The White House Council of Economic Advisers said in an internal briefing last week that school revenue would drop by 7% to 11% if students were not in school. Some senior aides complained that the White House was focusing on reopening schools too late, when it should have been a top priority after a long period of focusing on reopening restaurants, bars, and small businesses across the state.

Now, with school reopenings becoming a central theme for the president and his aides, one of the more compelling options that senior administration officials have floated is to reallocate budgets, either to provide more money to schools or to allocate some of the upcoming stimulus package to local governments to cover the costs of reopening schools amid the pandemic.

A school in New York City, USA. Photo: Reuters

During the recent election campaign, President Trump’s ideas for reopening schools were all about making it a key campaign message, despite opposing views and warnings from teachers and health officials. President Trump seemed to have few tools to force states and schools to reopen, other than sheer pressure through executive orders.

Unemployment benefits controversy

While the debate over reopening schools rages on, unemployment insurance, the economic lifeline for millions of American families, is set to expire in less than 10 days, leaving families in limbo. Congress is in session this week, with lawmakers debating whether to extend the $600-a-week unemployment benefit.

If this blow does come, it will be felt not just by the unemployed but also by businesses, and threaten the broader economy. Cutting benefits for many at once means a drop in public spending (nearly $19 billion a week).

“The $600 a week payment is huge for workers and the economy. Unemployment benefits have served as a critical crutch for the economy. That’s why Congress should maintain the $600 a week payment.”

Ryan Nunn - head of applied research at the Federal Reserve Bank of Minneapolis

Lawmakers in Congress will meet this week to discuss extending unemployment insurance benefits. Photo: WSJ

Meanwhile, some economic advisers outside the Trump White House, such as economist Stephen Moore of the Heritage Foundation, have called for the government to end the $600-a-week benefit for unemployed Americans, saying it is inconsistent with the goal of restoring the economy. Stephen Moore's view is that it is impossible to pay people who do not work, and that the option must be abandoned and the traditional unemployment benefits system returned.

“The president’s re-election depends on getting this decision right and setting the stage for a strong economic recovery in the fall. President Trump will win if the economy recovers at a good pace, but at this point that is uncertain.”

Stephen Moore - economist at the Heritage Foundation

In recent weeks, President Trump has floated ideas that include more direct tax refunds to taxpayers, liability protections for workers and businesses, infrastructure spending and targeted aid to local governments to combat Covid-19. The White House hopes the next aid package will include tens of billions of dollars to ensure teachers can safely return to school and students can return to school.

President Trump hopes to win a majority of voters in the November election. Photo: AP

President Trump recently called on Twitter to “Make America great again!” and economic recovery is his key “card” in the run-up to the election. Trump’s political advisers still consider economic recovery to be the president’s top message this fall, because before the pandemic hit, President Trump made his mark in office by bringing unemployment to a historic low. Therefore, Republican advisers plan to build a campaign that sticks to this idea, creating a contrast with the economic proposals of his opponent Joe Biden.

That economic message will be reinforced every day to make it the top of voters’ minds, so that they will instinctively blame Covid-19 not on the president for the economic collapse.