Jumpstarting American Business – Stimulus Package And More

We are not going to talk about the election.  But, what we are going to talk about are the two issues that likely voters stated in surveys as being the top issues the candidates should address: Covid and the economy.  Of course, the two go hand-in-hand.  

In a way, the feelings that Covid imbues are somewhat like the feelings the Great Depression imbued: uncertainty and “will this ever end?” and “if this ends, when will it end?”  In a recent survey sponsored by American Express Travel, only about 40{a1a1c2aadef71e97d3d8dc505175168462e21e65098a9638786aefb22bafcd71} of respondents stated that they felt comfortable to travel.  Which means that 60{a1a1c2aadef71e97d3d8dc505175168462e21e65098a9638786aefb22bafcd71} are uncertain about traveling.  When people are uncertain, they go into hunker-down mode.

Roughly 60{a1a1c2aadef71e97d3d8dc505175168462e21e65098a9638786aefb22bafcd71} to 70{a1a1c2aadef71e97d3d8dc505175168462e21e65098a9638786aefb22bafcd71} of economic consumption comes from the consumer.  Whether or not a household is affected by Covid-related unemployment, the above-mentioned uncertainty will lead many households to lower spending — just in case.  Lower revenues will lead businesses to go into hunker-down mode . . . requiring less staff, which adds to unemployment.  And, we enter a self-reinforcing economic contraction.

Until Covid is contained — whatever that means and how ever that is determined — the economy will be under pressure.  Between now then, something needs to be done to keep things afloat.  In short, this means 1) keeping consumers afloat and 2) keeping businesses afloat.  And, when we say “keeping businesses afloat,” we need to recognize that roughly 60{a1a1c2aadef71e97d3d8dc505175168462e21e65098a9638786aefb22bafcd71} to 70{a1a1c2aadef71e97d3d8dc505175168462e21e65098a9638786aefb22bafcd71} of economic output and employment comes from small and mid-sized companies, not from large firms.  A commitment by the government to keeping things afloat translates into confidence — we reverse the cycle.

Over the past several weeks, there had been negotiations among our elected leaders over a second stimulus package.  Those negotiations stalled.  But, with the election behind us, we can look at restarting those negotiations.  Given the recent surge in Covid cases, it would seem that a second stimulus package has become an imperative — perhaps a deal is cut in late January.

Turning to “and more,” elected leaders must recognize that Covid is not going away anytime soon.  Their predisposition to “one and done” solutions will not work.  Scientists warned of this and we now have what we have.  Lockdowns destroy businesses and destroy jobs — some permanently.  So, we need to deploy solutions that are sustainable and avoid lockdowns — practices that we follow indefinitely but that allow us to conduct business, work, and live our lives.  That will restore confidence, that will jumpstart business, and that will put people back to work.

Bo says, “Just do it.”