While Congress has passed a coronavirus funding bill that Trump is expected to sign, the White House has not called for passing an economic stimulus package to offset the impact of the virus.
There's no need for stimulus, they say, because everything is just dandy.
Moreover, Trump's top economic adviser, Larry Kudlow, says stimulus doesn't work anyway.
“We’re not there yet. First of all, the economy is in good shape,” says Kudlow, who heads the president’s National Economic Council, before rattling off a flurry of recent positive statistics. “I am aware that there are going to be some speed bumps coming. But in talking to the president about this, a) We’re not going to panic over this at all, because the economy is sound, and we will get through this, and then the virus will end. Secondly, frankly, short-term fixes never work. You know, these temporary tax cuts or rebates and things of that sort. You look at the history—I mean I’ve lived with this for decades—they just never work.”
On the wall behind him hangs a framed copy of a 2018 Kudlow speech headlined “The Trump Economy,” overwritten with the unmistakable black Sharpie autograph of the president and the declaration “Larry, So great!”
Kudlow is partially correct, just not in the way that he thinks. Tax cuts and rebates definitely do not help, but legitimate stimulus packages like the American Recovery and Reinvestment Act (ARRA) signed into law by President Obama in 2009 definitely do.
We probably haven't reached the point of needing something that significant, at least not yet, but material needs and economic conditions are not what's driving White House opposition to the very idea that some sort of stimulus may be necessary.
Trump's advisers are rejecting the notion that stimulus may be necessary not because the economy is actually "in good shape," as Kudlow says; they're rejecting it because admitting that the economy may need help is to admit that Trump's great economy may not be so great after all. It's the same reason the White House seemingly abandoned the idea of trying to pass more tax cuts before the coronavirus arrived. Trump quickly shot down reports that they were developing new tax cuts by saying his economy is so great it doesn't need another tax cut.
The idea that stimulus may be necessary would also put the lie to Kudlow's own claim that they've placed an "airtight" lid on the virus and that it won't lead to economic turmoil.
The Dow Jones dropped by over 1,100 points again this afternoon. Businesses and schools in the Seattle area are beginning to shut down and officials are renting space to serve as makeshift quarantine housing. New cases have been identified in multiple states and some of them have no known origin, meaning it's already spreading among communities undetected.