With the United States of America now nearing the middle of its second full month of lockdown as a result of the COVID-19 Pandemic, we are now beginning to see the full result of our unfortunate but necessary action in saving hundreds of thousands of lives. The cost of protecting our people from serious harm as a result of COVID-19 has now led to the direst economic crisis in our country since the Great Depression. The unemployment rate has climbed to a record 14.7% in April 2020, up from a record low of 3.5% in February 2020, according to the Bureau of Labor Statistics, while other organizations such as Forbes projects that the number could be much higher, possibly at 20% or even higher. These numbers are worrying to economist or historian who is at all familiar with the Great Depression, which saw in 1933 an unemployment rate at 24.9%, which if trends continue for May 2020, which they likely will, the unemployment rate will likely reach or top that number. This situation is even direr when, as The New York Times notes, employment is now connected to health insurance. With COVID-19 appearing to be on the decline for this bout with the virus, and fears of a likely resurgence coming back later the year or early next year now present, questions are now being asked of how long this crisis will last. Is this a V-shaped recession with a quick sharp decline and then a sharp incline to a healthy economy, or a U-shaped recession with a steep decline followed by a long recovery. While we have yet to see what shape this recession/depression might take, with Vox noting that it could be either, and even with a V-shaped recession this crisis could still last a year or two, we must begin to look at how the economy could recover. That brings up the question of whether or not Americans could look forward to a New Deal-style of economic reforms, what they might be, and how in a post-COVID-19 economy we must think about creating a twenty-first-century economy.
During the Great Depression, President Franklin Delano Roosevelt implemented a series of policies called the New Deal, which not just included government spending, but also a private investment program with the government “helping businesses overcome risk-aversion and finance new opportunities for growth” according to The Atlantic. It is because of the New Deal and its follow-up program the Great Society that we have programs such as Social Security, Medicare, and Medicaid, as well as the minimum wage, and policies to reduce racial injustice. Both were implemented in similar times of economic uncertainty and inequality in our history, the New Deal coming at a time defined by massive unemployment numbers and an economy struggling to crawl out of the deep hole, and the Great Society endemic of a time filled with great social upheaval in the fight for equal rights. What can be done during this present crisis to ameliorate the problems everyday Americans face? The first and probably most radical change is implementing Medicare for All, which would effectively nationalize our healthcare services. Presently, every country in Europe, the Americas, and most of Asia and Africa have some form of universal or free healthcare. The exceptions are the United States, Suriname, Iraq, Afghanistan, Syria, Cambodia, Indonesia, Angola, Somalia, Tajikstan, Turkmenistan, Jordan, Lebanon, Sudan, Zimbabwe, and a handful of other nations. In a single-payer healthcare system like Medicare for All, care would not be linked to employers, and exorbitant costs of medical care would not exist.
Some other proposals, such as former Mayor of South Bend, Indiana Pete Buttigieg’s Medicare for All (Who Want It) could also be implemented, marrying the idea of a free public option available for all alongside private options to create a competitive system. Regardless of how the program is implemented and if there is a transition period, or some type of public option going up against private choices, support for Medicare for All has been on the rise. In November 2019, 47% of all Americans supported Medicate for All, while in March 2020, at the start of this crisis, support shot up to 53%. Although polls since March 2020 appear to have been sparse, what few polls since then show public support going up even more, with one Morning Consult poll from late-March 2020 showing that 55% of Americans support Medicare for All. Even among physicians the idea is somewhat popular, with a May 2019 Medscape poll showing that 49% of physicians supporting Medicare for All. The idea that Medicare for All is unpopular might have been true as recently as last year, but with the economy worsening and more Americans supporting the proposed program, the nation could see single-payer universal healthcare in the coming years.
Implementing a modern-day New Deal will be difficult, and in this political environment it might not entirely happen, but the time for economic conservatism is over. The way out of the crisis is not raising taxes and cutting social programs. While Medicare for All is perhaps most important in the aftermath of the greatest public health emergency this country has faced in over a century, other policies must also be implemented. Raising taxes for the highest incomes in this country should precede many major economic programs to help the American people. Presently, the amount of tax owed by the highest earners in this country is 37%, while from 1951 to 1964, the highest earners paid 91% of their income towards federal taxes. Even the most ambitious proposals by Senator Bernie Sanders, Senator Elizabeth Warren, and even Congresswoman Alexandria Ocasio-Cortez, had the tax rate for high earners at 70%, well below the record high of 91%. This would allow for the federal government to expand multiple programs from Head Start to the Supplemental Nutrition Assistance Program (SNAP), and forgiving all $1.6 trillion in student loans and implement policies to create free or affordable college educations. In reducing the cost of college education and forgiving student debt, consumer spending among young people would go up, as would the creation of new small businesses and would help young people start new families.
Although Medicare for All, raising taxes for the highest earners, and forgiving all student debt while making college affordable are only parts of wider proposed reforms in fixing the economy post-COVID-19 and dealing with the crisis of climate change, they could be the start of a modern-day New Deal that could help bring back the economy of a severe recession or even a depression. With 14.7% of Americans unemployed and that number likely to grow in the coming months, bold and necessary action is needed to ensure that this country is brought on the right track and to prevent a calamity like this from ever happening again. Although we do not know whether this crisis will be V-shaped, characterize by a year or two of recession, or U-shaped, which is a sharp crash followed by a slow recovery, these reforms could help everyday people to survive. In Medicare for All, by disconnecting health insurance from someone’s place of employment, the burden on the part of individuals and businesses could be lifted, while forgiving all student loans could allow for more consumer spending and the creation of small businesses and new families. Furthermore, raising taxes for the highest of earners from 37% to 70%, modest compared to the historic high of 91% for high earners in the 1950s, could help to keep current social programs afloat such as Head Start, SNAP, TANF, unemployment insurance, government-subsidized housing, and help to create new programs to help create protections for a twenty-first-century economy. In dealing with the world after COVID-19 and the economic crisis that we face today, we have the New Deal and the Great Society to look toward for bold action, and new modern-day ideas such as the Green New Deal and others to implement for a brighter future.