In a series of tweets, US President Donald Trump announced to halt the much needed COVID-19 stimulus negotations until after the election after he supposedly would win. Is this being done as a means for Trump to win the election? or is it done out of spite? Several institutions emphasized the need for further stimulus to keep the economic wheels turning and to seed the potential economic recovery once a COVID-19 vaccine is found. This was emphasized by Fed Chair Jerome Powell who recently said that the economy has a long way to go and too little support would lead to a weak recovery which would create hardships for households and businesses.
Negotiations included Congress Democratic majority led by Nancy Pelosi pushing for $2.2 Trillion package whilst Steve Mnuchin who is heading the negotiations on behalf of Republicans is pushing for a $1.6 Trillion package. The Democratic proposed package includes a $1,200 direct payment to US citizens and $600 a week in unemployment benefits through January. This delay and now postponement of negotations comes against a 7.9% unemployment rate in the US and 210,000 COVID-related deaths which makes the US one of the hardest hit in the world from the virus.
Markets initially reacted negatively to this news but the following morning showed futures in positive territory. Nancy Pelosi reiterated with the following tweet indicating that this action would mostly hard hit struggling families.
Many questions arise from this decision to postpone negotiations. Is the president holding voters hostage? votes in exchange for stimulus assistance? Is he doing it out of spite? that is, he knows that the election will be lost and does not want the economy to recover under a potential democratic leadership? Are Democrats playing hardball on purpose? in order to declare a democrat victory that would aid Joe Biden?
One thing for sure is that this is highly manipulative behaviour from the President who clearly showed time and time again that he does not care about struggling citizens as long as he gets his way. Alot of questions will remain unanswered but one sure fact is that at the moment Biden is polling at 51% in national polls ahead of Trump’s 42.6% according to a most recent Financial Times polling. This comes with less than 30 days for election day.
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