President Trump solves economic problems in the sprint race

Difficulty reopening schools

The current climate is a challenging one for President Trump, as his approval ratings are falling. However, in public opinion polls, he still gets better results on the economy than his opponent, Joe Biden - the Democratic presidential candidate. According to a recent WSJ/NBC News survey, 54% of voters approve of President Trump's handling of the economy, even as his overall approval rating is down 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 for those efforts.”

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

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

Having more schools open by Labor Day (September 7) is perhaps the most important thing right now, prompting the Trump administration to put pressure on localities to find ways to reopen schools, even as many 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 remain closed,” said expert Michael Strain. “Local policymakers seem to want both, but that’s impossible. In many cases, parents can’t go to work with their children at home. And for those who are both at home with their children and working, productivity is declining.”

The White House Council of Economic Advisers said in an internal briefing last week that school revenue would fall 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 schools should have been a top priority after a long period of focusing on reopening restaurants, bars, and small businesses across the states.

Now, with school reopenings becoming a central theme for the president and his aides, one of the persuasive options being floated by senior administration officials is to reallocate budgets, either to provide more money to schools or to earmark some of the upcoming stimulus package for 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 this, making it a key campaign message, despite opposing views and warnings from teachers and health officials. It seems that President Trump has few tools to force states and schools to reopen, other than sheer pressure through administrative decisions.

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 set to convene this week, with lawmakers debating whether to extend the $600-a-week unemployment benefit.

If this blow does come, it will be felt not only by the unemployed but also by businesses, and threaten the economy more broadly. 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/week benefit for unemployed Americans, because this policy 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 option must be abandoned and the traditional unemployment benefits system must be returned.

“The president’s reelection 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 in their efforts to fight 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' votes in the November election. Photo: AP

Recently, on his Twitter, President Trump called for “Make America great again!” and economic recovery is his key “card” in the sprint period before the election. Trump’s political advisers still consider economic recovery to be the president’s top message this fall, because before the pandemic, President Trump made his mark in his term by bringing the unemployment rate to the lowest level in history. Therefore, Republican advisers plan to build a campaign based on 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.