We’re Heading for ‘Covid Hell’

We’re Heading for ‘Covid Hell’

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Plus, a looming benefits cliff for the unemployed
Wednesday, November 11, 2020

We’re Heading for ‘Covid Hell’

The Covid-19 pandemic is raging across the United States, and the numbers are simply staggering:

  • New cases have topped 100,000 a day for seven straight days as of Tuesday, with an average of 119,000 new infections a day over that time. We hit another record high of 136,325 new coronavirus infections yesterday, according to data from Johns Hopkins University.
  • More than 1,400 deaths were reported on Tuesday, reportedly the highest total since August.
  • The U.S. had more than 1 million new cases over the first 10 days of November, with infections rising at an accelerating pace.
  • The 15 days with the highest number of new cases have all taken place over the past 18 days, Axios notes.
  • Hospitalizations, up about 30% since the beginning of the month, have reached a new high of 61,964, according to the Covid Tracking Project, surpassing levels seen in April and July.
  • In all, about 10.3 million Americans have tested positive for the virus and more than 240,000 have died.

Texas has become the first state to surpass 1 million confirmed cases. And CNBC reports on the grim picture across a number of other states: “Ohio has had an ‘unprecedented spike’ in Covid-19 hospital admissions. ICU beds in Tulsa, Oklahoma, are full. North Dakota’s hospitals don’t have enough doctors and nurses. And hospital administrators in Iowa are warning that they are approaching their limits.”

But the surge this time isn’t limited to any one region. All but eight states are in the “red zone” for Covid-19 cases, meaning they had more than 100 new cases per 100,000 residents over the prior week, according to a White House coronavirus task force report issued Tuesday and described by the Center for Public Integrity.

Public health experts warn that the situation is likely to grow much worse over the coming months, with the holidays posing the threat of super-spreading events across the country and hospitals in many places ill-equipped to handle the rising number of cases even as medical treatment of cases has improved substantially. Experts are again worried about the strain on hospital capacity, and burnout among health-care professionals. "We have legitimate reason to be very, very concerned about our health system at a national level," Lauren Sauer, an assistant professor of emergency medicine at Johns Hopkins University who studies hospital surge capacity, told NPR.

That all portends a very difficult winter ahead. “What America has to understand is that we are about to enter Covid hell,” Dr. Michael Osterholm, director of the Center of Infectious Disease Research and Policy at the University of Minnesota and a member of President-elect Joe Biden’s new coronavirus advisory board, told CNBC on Monday. “You’re going to see not just case numbers going up, the number of people hospitalized going up, but you’re going to see the case fatality rates also increase substantially. The next three to four months are going to be, by far, the darkest of the pandemic.”

That outlook is made all the more troubling by the prospect that President Trump could be focused on contesting the election results or, if he accepts his loss, may nevertheless be even less interested than before in addressing the pandemic and enacting measures to control it.

Trump’s efforts to impede the transition to a Biden administration could also be costly, as Andy Card and John Podesta, who served as White House chiefs of staff under Presidents George W. Bush and Bill Clinton, respectively, warn in The Washington Post. “With the covid-19 pandemic continuing to wreak havoc, the costs of a delay are much higher today than almost any time in U.S. history,” they write. “Specifically, a delayed transition and the absence of cooperation between the outgoing and incoming administrations could hinder economic recovery, slow the distribution of a vaccine and, God forbid, put American lives at risk.”

What we need to do: “
This is not a question of lockdowns vs no lockdowns,” Dr. Scott Gottlieb, former commissioner of the Food and Drug Administration, said Wednesday. “The question is how do we take targeted measures, get broader compliance to prudent steps like masks, distancing, avoiding large gatherings; to reduce, slow spread so that the healthcare system doesn't risk getting overwhelmed.”

Expiring Unemployment Programs Could Leave Millions Out in the Cold

Two federally funded unemployment programs are scheduled to expire at the end of December, threatening about 13 million people with a loss of benefits in the new year. The loss of income support could leave millions at risk of eviction and hunger, Ben Casselman of The New York Times writes Wednesday, while creating an additional drag on an economy that is already slowing as it recovers from one of the most severe economic shocks on record.

The emergency aid programs were created by Congress as part of the Cares Act in March. The Pandemic Unemployment Assistance program provides aid to workers who are usually left out of the system, including gig workers and the self-employed. It allows for 46 weeks of benefits, administered through state employment offices, covering February 2, 2020, to December 26, 2020. There were 9.3 million people participating in the program as of the middle of October (though experts say the number is likely inflated to some degree by double counting and other administrative errors).

The second program, Pandemic Emergency Unemployment Compensation, provides a 13-week extension of support for workers who have exhausted their state benefits. The program, which will expire at the end of the year, has seen a big jump in participation in recent weeks as people hit the time limit on their state benefits, which typically last for 26 weeks. The number of long-term unemployed —usually defined as those out of work for more than 26 weeks — rose to 3.6 million in October, an increase of more than 1 million.

Savings depletion: Many unemployed workers saw an income boost in the spring and early summer, as $1,200 relief checks and enhanced unemployment benefits hit their wallets. The Cares Act created a third program, called Federal Pandemic Unemployment Compensation, which provided an additional $600 per week in jobless benefits for all unemployed workers, but it expired on July 25. The Trump administration provided a few weeks of additional payments at about half that level, but that effort has also come to an end. As a result, unemployed households have started drawing down their savings and now face an income deficit that will become more severe as the emergency aid programs come to an end.

“The safety net still has kind of held up until now, and I think we have been maybe lulled into a sense of complacency,” Andrew Stettner of the Century Foundation told Casselman. “We’re just putting people in this really precarious financial position where the damage of unemployment can just hit really hard.”

Relief bill stuck in neutral: Congressional leaders and the White House have been negotiating another coronavirus stimulus bill that would include new funds for unemployment benefits for months now, but real progress remains elusive. House Speaker Nancy Pelosi (D-CA) is still pushing for a relief package worth more than $2 trillion, but Senate Republicans have signaled that they won’t go anywhere near that high, and instead are focused on a smaller bill totaling closer to $500 billion. The White House, which before the election said it would support a $1.9 trillion bill, appears to have left the playing field entirely as the administration turns all of its attention to contesting the election (“Trump's public schedules show little interest in work,” a CNN headline said Wednesday).

Speaking about the stimulus bill Tuesday, Senate Majority Leader Mitch McConnell (R-KY) leader said he saw no signs of progress: “We need to think about, if we’re going to come up with a bipartisan package here, about what size is appropriate. It seems to me that snag that hung us up for months is still there. I don’t think the current situation demands a multitrillion-dollar package. So I think it should be highly targeted, very similar to what I put on the floor both in October and September.”

A New Tax on Stay-at-Home Workers?

A report funded by Deutsche Bank that examines the economic recovery from the pandemic suggests that people working at home should be taxed for the privilege of doing so, in order to pay for aid to workers who can’t stay home.

Those who can work from home are contributing less to key parts of the economy, the report says, spending less on travel, clothes, dining and other services, inadvertently pushing workers in those sectors into crisis. At the same time, they are gaining valuable benefits, including less stress from commuting and reduced consumption outside the home.

The analysts estimate that the direct financial benefits received by stay-at-home workers are worth about $10 per day, and they argue that a tax of that amount would leave workers no less well off than if they had gone into the office. They propose a 5% tax to collect that amount from the average worker, which they say would raise something like $48 billion, money that could be used to pay $1,500 grants to 29 million low-wage workers who cannot work from home.

"For the first time in history, a big chunk of people have disconnected themselves from the face-to-face world yet are still leading a full economic life,” said Luke Templeman, a macro strategist at Deutsche Bank. “For years we have needed a tax on remote workers – COVID has just made it obvious.”

On this Veterans Day, we extend our heartfelt thanks to all who have served the country, and to their families as well.

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