TNM: March 23-27
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Good morning, Let's break down the news. Here's a preview of this week's memo: 1. CoronaVirus: U.S. Has Most Cases in the World 2. Senate Passes $2 Trillion Stimulus Relief Bill + GetSmart (💰 How much money does a U.S. President make?) Link to Spotify. Audio will be available by the end of the day.
UK Prime Minister Boris Johnson has tested positive for the coronavirus and is experiencing mild symptoms. He said he will still lead the country’s response efforts while in self-isolation.
The number of unemployment claims last week in the U.S. was 3.28 million, obliterating the previous high of weekly claims set in 1982 at 695,000. Economists are predicting that GDP in the U.S. will contract by double digits in the coming months.
Coronavirus: U.S. Becomes World Leader in Confirmed Cases
Context: Countries Debate How to Contain Covid-19 Covid-19 has brought massive public health challenges, as well as economic ones. Thus, countries are trying to balance policy considerations of saving as many lives as possible, while at the same time trying to avoid irrecoverable economic recessions. Generally, there have been two approaches to defeating the virus. 1) Mass quarantines and economic shutdown to limit peoples’ movement. This is the most common strategy, implemented by China, and by Europe and the U.S. after some initial hesitation. More than ⅓ of the world’s population is currently under quarantine. 2) Aggressive testing, tracking, and isolation of those infected with the virus. South Korea, Singapore, and Sweden have elected for this strategy, keeping their economies relatively open, while the government aggressively tests scores of people and tracks those who’ve been in contact with infected persons. Meanwhile, there is still widespread adoption of masks and social distancing. Global Snapshot
Number of Cases: +537,000 up from ~244,000 last week.
Number of Deaths: +24,000 up from ~10,000 last week.
The Situation in the United States The U.S. surpassed Italy and China for the total number of confirmed cases as testing continues to be more widespread. In total, there are over 85,000 cases in the U.S. and more than 1,200 deaths, up from 10,500 and 150 a week ago. New York alone has over 37,800 cases and has said that anyone who has recently left New York should self-quarantine for 14 days. Meanwhile, Michigan, Illinois, and Louisiana appear to be the next growing hotspots. States With the Most Cases
See a visual map of the number of cases in each state. Trump Begins Discussion of When to Reopen the Economy In the president’s Monday evening briefing he addressed the pressing question of when the U.S.’ economy will begin to reopen. President Trump said the White House is looking at weeks, not months for reopening broad segments of the economy while maintaining social distancing and prevention measures. Pressed by whether he will listen to medical experts, President Trump said he will listen to the advice of his advisors and medical experts, but added that “we’re not going to let the cure be worse than the problem.” On Thursday, the Trump administration said it will soon categorize counties in the U.S. based on their risk levels, hypothetically allowing those with lower risk levels to resume economic activity before others. Such classifications will require more widespread testing. While testing in the U.S. has ramped up, it still lags behind that of many countries that have more effectively slowed the outbreak. Regardless of what President Trump decides, state governors will still be responsible for most of the quarantine and business restrictions in their states. In Europe, after initially being slow to halt economic activity, most countries have adopted strict quarantines and closed most businesses, deciding to first deal with the medical problem of the virus and address the economic problems through massive spending later. Hospitals in Hotspots Reaching the Brink Hospital systems in outbreak areas such as New York City and Seattle are on the threshold of being overwhelmed if the rates of infection continue as such. However, Governor Andrew Cuomo of New York indicated on Wednesday that the hospitalization rates in New York have been slowing, offering hope that the containment measures are having an effect. Further, two U.S. Navy ships are being established in Manhattan and Los Angeles to provide extra temporary hospital space. Experimental Antiviral Treatment Begins New York began conducting clinical trials of a trio of antiviral drugs used traditionally to treat malaria on Tuesday. President Trump and the FDA approved the drugs in record time. The drugs were not experimentally tested against the coronavirus, but a number of patients have reported anecdotal success. Meanwhile, antibody tests, which would allow people to see if they have already had the coronavirus thereby building up immunity to it, are also being made available. Spain, Italy Continue to Suffer The number of deaths surpassed 8,215 in Italy and 4,365 in Spain. Both countries now have higher death counts than China, at 3,290. While the number of deaths continue to remain elevated in Italy, the curve of new cases has shown signs of flattening. Medical experts contribute a number of factors to the high death count in Italy and Spain, including late responses and lack of testing, aging populations, and cultures with strong intergenerational familial ties. Meanwhile, although Germany has over 40,000 confirmed cases, they have registered less than 300 deaths. Part of Germany’s success has been attributed to their incredible testing capacity Here is a map showing the locations and number of cases worldwide. China Temporarily Bars Foreign Entries China announced on Thursday that it will temporarily bar entry to foreigners due to the "rapid spread of Covid-19 across the world,” slashing most international flights. While China has reported very few new domestic cases, it is working to stop the importation of new cases from abroad. Virus’ Death Rate Remains Unknown Estimates have been ranging from well below 1% to as high as 5%. The difficulty is that the death rate is based only on those who have actually been tested for Covid-19. However, many people who contract the virus never get tested because they show mild symptoms or are actually asymptomatic. Lack of adequate testing kits has also made it difficult to ensure the total number of cases is accurate.
Senate Reaches $2 Trillion Stimulus Package
Context The stimulus package is intended to relieve the economic strain put on Americans and businesses during this unusual halt in economic activity. Details of the bill are listed below. When did it pass? The bill passed 96-0 in the Senate late Wednesday night, with every Republican and Democrat voting yes. Although all senators voted yes, a few senators were not present: Senator Rand Paul of Kentucky, who tested positive for the virus on Sunday, and Senators Mike Lee and Mitt Romney who are in self-quarantine after interacting with Rand Paul in recent days. What’s next? Speaker of the House Nancy Pelosi said the House will vote and approve the stimulus package today (Friday) “with strong bipartisan support.”. President Trump has also indicated he will sign the relief bill into law, tweeting, “96-0 in the United States Senate. Congratulations AMERICA!”. What’s in the bill? The $2 trillion stimulus package is the largest spending bill in world history, let alone in U.S. history. Let’s break down what’s in it. Direct checks to qualified individuals
Individuals who earn $75,000 or less would be eligible to receive a $1,200 check or direct deposit. Individuals who earn up to $99,000 would receive smaller-sized checks, reducing $5 dollars for every extra $100 they earn.
Married couples who earn up to an adjusted gross income of $150,000 would receive a $2,400 check along with a $500 tax credit for each kid under the age of 17. Married couples who earn up to $198,000 would receive a smaller check, changing on a sliding scale.
Student Loans Suspended The Department of Education would suspend student loan payments without penalty until September 30. Unemployment Boost The stimulus bill would give the unemployed $600/month on top of their current state benefits for the next four months. $500 Billion in Business Loans Some of the loan money would be directed to specific segments of the economy: $4 billion for cargo air carriers, $17 billion for businesses who work in national security, and $25 billion for passenger air carriers. The remaining $454 billion would be widely allocated to businesses and states who need loans. Hospitals Get Relief The stimulus bill would provide $117 billion in funding for U.S. hospitals. Stock Markets React to Stimulus Hopes The stock market realized three consecutive days of gains over news of the stimulus package, as well as President Trump’s optimism for reopening the economy sooner than expected. However, markets opened sharply lower this morning. What to watch moving forward If you fall in the categories listed above, watch for a check or instructions in the mail regarding how to receive direct relief. Finally, take a step back to look at what just happened: the largest spending bill in the history of the world just passed 96-0 in the Senate and is expected to go into effect in the next two weeks. It will be fascinating to see whether the stimulus acts as intended in providing much needed economic relief for American citizens and businesses.
💰U.S. Presidents Receive a Salary of $400,000
Although presidents are free to take their salary, sometimes they donate it to a cause. President Trump donated his most recent paycheck to fight the opioid crisis, for example.