Need for Speed Part 2: The Case for Additional Fiscal Stimulus

There are several concerns associated with the additional fiscal spending I advocated in my last article. One is the additional debt. Many people, including my colleague, Jack Geiger, have expressed concern about the size of the federal stimulus already enacted. I share his concerns on potential defaults by companies loaded up on debt from pre-COVID-19. However, I am less inclined to agree with his concerns regarding the federal debt, including the devaluation of the dollar and potential future tax increases, at this stage.

A Parallel between Settler Mortality and COVID-19

Over the course of history, the economic development levels of core nations, which are the industrialized and capitalist nations of the world system, have come by virtue of globalization processes and state interdependencies. However, amidst the current pandemic, one of the main factors that is helping to curb the spread of COVID-19 is anti-globalization. In peripheral and developing regions that embody large rural geographies, where social distancing is already a way of life, citizens of these regions are noted to be at a lower risk of infection (Baragona, 2020). Currently demands for self-isolation have already eliminated years of economic growth. COVID-19 has, essentially, inflicted significfant economic strains for most core, or developed, nations. On the contrary, peripheral states, or poor, underdeveloped nations whereby most households engage in subsistence lifestyles, are actually experiencing an advantage with regards to their responses to the disease. According to Daron Acemoglu, Simon Johnson, and James Robinaon, exogeneity tends to incur a higher risk of disease and infectivity due to geographical and climate differences in certain regions, and that some regions and parts of the world have higher risk of disease in comparison with other geographical locales (Acemoglu et al., 2000). However, this notion is completely unrelated to the factors that have direct influences on GDP. In actuality, the spread of COVID-19 is more related to labor mobility and interstate dependency (Acemoglu et al., 2000). One of the causes for this has been the cross-border labor and resource mobility that determines the reach of the pandemic (Baragona, 2020). As such, it has come to light how imperative domestic institutional capabilities and import substitution are for coping with the prevailing supply and drug shortages currently being experienced and for effectively slowing the spread of COVID-19.

Boom or Bust: The Uncertainties of the Housing Market Following a Global Pandemic

Similar to the wavering bullish and bearish tendencies of the stock market, the housing market also has its ups and downs. These ups and downs, dubbed ‘Booms’ and ‘Busts’, are known to correlate conveniently with personal consumption, which makes sense intuitively. Those actively spending and consuming more frequently when the economy is doing well are much more likely to be in the market for a new home. Sadly, it is not quite this simple as mortgage debt and personal disposable income, to name a few, are just some of the factors that may be considered when attempting to predict the movement of the housing market. This is explained in depth by a 2018 publication from the Federal Reserve of San Francisco. There is one thing, however, that these findings, for the most part, do not consider: a completely unpredictable flu-like virus acting on a global scale. Which, if it wasn’t obvious from our new everyday lives, has had a substantial impact on our economy.

President Erdoğan’s Fatal Mistakes

Turkey’s divisive President Erdoğan has had a difficult year. From a stinging loss in the 2019 municipal elections to having to confront the coronavirus to lengthy and costly military deployments, the president has been struggling to keep his base satisfied and has given a chance for his opponents to unify against him. Furthermore, Turkey’s problems have been compounded by poor policy decisions that will impact his prospects for re-election in 2023.

Need for Speed Part 1: The Case for Additional Fiscal Stimulus

As America continues its fight against COVID-19, its economy has taken a serious battering. Even after two major rounds of fiscal stimulus totaling nearly $3 trillion, jobless claims have soared past 35 million in the last eight weeks as large swaths of the country shut down to slow the spread of the virus. Total nonfarm payroll employment fell by 20.5 million in April while unemployment reached 14.7%. The numbers undercount the losses due to methodology and labor force participation rate decline, yet they still represent the largest over-the-month loss in the history of the series. As hard to believe as this may be, current fiscal stimulus is insufficient. We must act bigger and faster if we hope to come out of this crisis any time soon.