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Brace Yourself for Trump's Great Recession

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From Robert Reich Blog

Trump and businesses demanded America "reopen" to revive the economy. But we've reopened too soon, before COVID-19 is under control. So we're needing to close or partly close again, which will prolong the economic downturn and wreak even more havoc on millions of Americans' livelihoods.

It never should have been a contest between public health and the economy, anyway. The economy has always depended on getting public health right. And we still haven't.

Trump has downplayed the risks. He got in the way of governors trying to keep people safe. And now all of us are paying the price.

Brace yourself. The wave of evictions and foreclosures in the next two months will be unlike anything America has experienced since the Great Depression. And unless Congress extends extra unemployment benefits beyond July 31, we're also going to have unparalleled hunger.

Eviction protections for federally subsidized properties run out at the end of July. In some states that enacted their own moratoria on evictions, renter protections are already running out. One study estimates that 19 to 23 million renters, or one in five people who live in renter households, are at risk of eviction by September 30th.

The people most likely to be evicted are Black and Latinx people, single mothers, people with disabilities, formerly incarcerated people, and undocumented people. This is systemic racism playing out in real time.

Meanwhile, delinquency rates on mortgages have more than doubled since March.

Unemployment itself is different than what we saw back in March and April. Today's layoffs are permanent, the result of businesses throwing in the towel or permanently slimming down.

In the public sector, loss of state tax revenue is running up against state constitutions that bar deficits. This is putting vital public services on the chopping block -- schools, childcare, supplemental nutrition, mental health services, low-income housing, healthcare -- at a time when the public needs them more than ever.

In April and May alone, states and localities furloughed or laid off some 1.5 million workers, about twice as many as in the entire aftermath of the Great Recession a decade ago. These cuts will be just the tip of the iceberg if the federal government doesn't provide more fiscal aid for states and localities.

Let me remind you: Expanded unemployment benefits are set to expire by July 31, leaving at least 21 million unemployed Americans with a 60% income reduction and no stimulus check to fall back on.

To make matters worse, over 16.2 million households have lost employer-provided health insurance. The Census Household Pulse Survey shows large losses in income in coming months, along with high food and housing insecurity.

So what's Trump's and Mitch McConnell's response to this looming catastrophe?

Do nothing.

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Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.

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