The Morning Dispatch: Speeding Up the Debt Clock

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Quick Hits: Today’s Top Stories

• As of Thursday night, 2,421,134 cases of COVID-19 have been reported in the United States (an increase of 40,644 from yesterday) and 124,402 deaths have been attributed to the virus (an increase of 2,433* from yesterday), according to the Johns Hopkins University COVID-19 Dashboard, leading to a mortality rate among confirmed cases of 5.1 percent (the true mortality rate is likely much lower, between 0.4 percent and 1.4 percent, but it’s impossible to determine precisely due to incomplete testing regimens). Of 29,207,820 coronavirus tests conducted in the United States (640,465 conducted since yesterday), 8.3 percent have come back positive. (*New Jersey updated its COVID-19 statistics reporting yesterday to include probable deaths from the virus, boosting yesterday’s figure by 1,854. We have included that tally in the table below, but because these deaths were spread out over the past several months, the additional 1,854 deaths are excluded from the chart’s trendline.)

• The Centers for Disease Control believes that 5 percent to 8 percent of Americans have been exposed to the coronavirus, though only about 0.7 percent have tested positive for it. “Our best estimate right now is that for every case that’s reported, there actually are 10 other infections,” the agency’s director, Robert Redfield, said on a call with reporters.

• With a surge in new COVID-19 cases and the state’s hospitalizations at all-time highs, Texas Gov. Greg Abbott announced Thursday he is pausing Texas’s reopening and once again banning elective medical procedures. Abbott has not yet rolled back any existing reopening progress, meaning restaurants can continue to operate at 75 percent capacity and other businesses at 50 percent.

• Colorado Gov. Jared Polis ordered the state’s attorney general to reopen an investigation into the August 24, 2019, death of Elijah McClain, a 23-year-old black man who died after being put into a chokehold by three police officers. McClain was walking down the street in suburban Denver wearing a ski mask, which his sister said he wore due to a blood condition that caused him to get cold easily. An officer can be heard on body camera footage of the incident saying, “I have a right to stop you because you’re being suspicious.”

• In a 7-2 ruling, the Supreme Court limited judicial oversight of expedited removal, strengthening the Trump administration’s ability to rapidly deport asylum-seekers from the United States.

• A report by the U.S. Government Accountability Office—an independent congressional watchdog—found that between March and April, the Treasury sent roughly $1.4 billion in stimulus payments to 1.1 million dead people.

• The House of Representatives passed its version of police reform—the Justice in Policing Act—by a vote of 236-181. Republicans Will Hurd, Fred Upton, and Brian Fitzpatrick broke from their party to vote for the bill, but the legislation will not pass the GOP-led Senate.

• According to data from the Department of Labor, another 1.5 million people filed for unemployment benefits this week, marking the 14th week in a row that claims have exceeded 1 million.

• The Federal Reserve—citing the pandemic’s economic fallout—announced large banks must suspend share buybacks and cap dividend payments at their current level through the third quarter of 2020.

Wherefore Art Thou, Deficit Hawks?

The International Monetary Fund (IMF) released its latest World Economic Outlook report on Wednesday, projecting a 4.9 percent global economic contraction this year— 8 percent in the United States—because of the pandemic. As a result, the IMF predicts global public debt will reach all-time highs both this year and next, exceeding 101 percent of worldwide GDP in 2020 and and 103 percent in 2021.

In the U.S., the coronavirus packed a powerful one-two punch for the remaining deficit hawks left in the country, an ever-shrinking group. Just as consumer spending plummeted—and with it GDP—because of state-imposed lockdowns and social distancing mandates, the federal government spent some $2 trillion to prop up the economy.

Brian Riedl—a senior fellow at the Manhattan Institute—believes that our debt-to-GDP ratio will soon surpass levels not seen since World War II. But “World War II ended and the debt came down,” he added. “The danger we face is that because of continued recessionary costs, as well as the retirement of the baby boomers, the debt is going to hit about 130 percent of the economy within the next decade.” Over the next couple of decades, Riedl projects, debt could exceed 200 percent of the economy.

Congressional Republicans have expressed much more concern about the long-term effects of another relief/stimulus bill than either their Democratic colleagues, who recently unveiled the $3 trillion HEROES Act package in the House, or the president, who is now considering a second round of stimulus checks. Is the Senate GOP fighting a losing battle? “Lawmakers will start paying attention to the debt when it is seen as an impediment to economic growth,” Riedl told The Dispatch. Either it starts to put a drag on the economic recovery, or the bond market panics and decides the government is in danger of not being able to pay its interest.

The biggest question facing economists is how many businesses will rehire their old staff when the economy reopens. “If the recession continues long enough that businesses and industry start to disappear, then there won’t be jobs for a lot of people to come back to,” Riedl said. As opposed to labeling the federal government’s relief programs as stimulus packages, Riedl believes these programs are “better described as social insurance, which is to say, they were giving money to businesses and individuals in order to stay afloat and make ends meet.” The number of Americans filing new unemployment claims has hovered around 1.5 million each week this month. 

The IMF has warned against rapidly slashing stimulus spending so as not to destabilize people’s income or send them into bankruptcy. The federal government’s so-called stimulus checks were not necessarily intended to stimulate demand and spending in the classical Keynesian sense, but to make sure small businesses and jobless Americans could stay afloat. Riedl thinks it may be necessary for Congress to roll out additional business rescue programs and unemployment checks, but remains skeptical that Keynesian style tax rebates and infrastructure stimulus programs will help. Any additional federal stimulus plans will likely face scrutiny, after it was uncovered this week that the Treasury sent more than 1 million paychecks to dead people.

He’s How Old?

Madison Cawthorn is on track to be the youngest member of Congress in modern American history, after defeating Trump-backed establishment candidate Lynda Bennett in the Republican primary for North Carolina’s 11th Congressional District.

Cawthorn, 24, who is a wheelchair user as the result of a near-deadly 2014 car accident that left him partially paralyzed, will turn 25 on August 1, the required age to be viable for the House of Representatives. And in a congressional district that went for Trump by 17 points in 2016, Cawthorn’s surprise Republican nomination win has likely stamped his ticket to Washington.

The wunderkind’s success came as a surprise to many Republican insiders. Bennett was a close friend of Mark Meadows, who had represented the district since 2013 before abruptly retiring from the House to serve as President Trump’s chief of staff. The president himself had also backed Bennett’s candidacy—something she touted often on social media and in campaign videos—and he even recorded a robocall encouraging voters in the district to support the 62-year-old businesswoman. 

But Bennett’s support from the GOP establishment—which included endorsements from heavyweights like Rep. Jim Jordan and Sen. Ted Cruz in addition to Meadows and Trump—was cleverly turned against her by Cawthorn’s campaign, which ran advertisements accusing Bennett of being “hand-picked” by “Washington, D.C. insiders and political bosses” and lambasting her for skipping debates. 

And, against all odds, the ploy worked: In spite of Bennett’s two-to-one fundraising advantage, Cawthorn’s emphasis of his personal story—alongside his vocal commitment to pro-life legislation, gun rights, and other top-line conservative initiatives—won him a surprisingly close second-place finish behind Bennett in March 3rd’s Republican primary. Bennett’s inability to clear the 30 percent threshold necessary to clinch the nomination led to a run-off, which Cawthorn won handily—with almost two-thirds of the vote—on Tuesday night.

“My opponent was really focused on Washington, D.C.,” Cawthorn said in an interview with The Dispatch on Thursday. “She was focused on who she knew, how much she spent, and which PACS were in for her. But you know what? None of those people could vote for her. They all live outside the district. And the people of North Carolina do not take cronyism lightly. They very much believe in selecting their own leaders, and they take the right to vote very seriously. I ran a campaign saying, I’m not going to be bought and paid for by any Washington insider. I’m not going to be beholden to any Super PAC or to any big-name endorsement. I’m going to represent you. And I think that’s what made a big difference.”

But one of those “big-name endorsements,” as we mentioned, was the president himself. Despite Cawthorn’s rhetorical defense of Trump—a post-victory campaign press release emphasized his support for “our great president” and added that he doesn’t buy into his victory being “a referendum on the president’s influence”—the 24-year-old’s victory flies in the face of Trump’s purported power over the Republican base. Until recently, Trump held a very strong—albeit imperfect—record of successful GOP primary endorsements. But the upset in NC-11 marks the second time in two weeks that Trump-backed Republicans have lost their primaries, after Virginia’s Denver Riggleman succumbed to a challenger earlier this month. Kentucky Rep. Thomas Massie also won his primary by 76 points earlier this week despite the president’s calls to “throw [him] out of [the] Republican Party.” (Trump did not officially endorse his opponent.)

Cawthorn chalks his success up to a generational advantage. “It’s because we were raised in this digital age for our entire lives,” he said. “It’s just second nature to post on Instagram, or to explain what’s going on over social media to an audience that you might never actually see. Whereas the older generation of Republicans, they’re not so used to being so constantly accessible to people. And I don’t think they’re used to being so constantly under the microscope.”

That much seems to be clear. As Cawthorn’s upset win sent shock waves through Republican party politics in North Carolina, a similar phenomenon was occurring on the other side of the aisle, with young progressive challengers like Jamaal Bowman and Sural Patel mounting strong primary challenges against older establishment Democrats like Eliot Engel and Carolyn Maloney in New York.

“I’m looking at the direction we’re headed in and it’s troubling,” Cawthorn says. “I just got engaged. I don’t want to raise a kid in the place our culture is going. I don’t want to ever have to hold my head in shame and tell my son that we are where we are because I didn’t stand up and fight.”

Worth Your Time 

• Over at The Forward, Cathy Young weighs in on two forms of authoritarianism we’ve witnessed spring up in recent days: the authoritarianism of the militarized state and the authoritarianism of the mob. The former is dangerous, she argues, but of lesser immediate concern than the latter: “At least so far, this Putinesque/Trumpian authoritarianism has been largely a bust. The protests only grew stronger, and arguably prevailed insofar as we’re seeing real progress on police reform. Military leaders including former Trump administration officials have pushed back strongly against the use of troops to disperse non-violent protesters. Trumpism is dangerous. But at the moment, I’m more worried about Soviet-style zealotry and witch-hunting on the left.”

• Much of the internet was mystified by a Washington Post story last week that dredged up a years-old incident where a white woman who is not a public figure wore a misguided ironic blackface costume to a D.C. Halloween party, a story that subsequently got the woman fired from her job. This New York Magazine deep dive from Josh Barro and Olivia Nuzzi examines how the piece came to be written—and raises the unsettling possibility that the Post threw the woman to the mob because they feared that otherwise the mob might come after them. 

• Anthony Bourdain, the celebrity chef who somehow turned food writing into a dangerous-seeming and even sexy endeavor, would have turned 64 yesterday. In light of the occasion, we wanted to share this piece from last year—not one of Bourdain’s, but Foodbeast writer Emily J. Sullivan’s week-long adventure trying to cook Bourdain’s recipes. 

Something Fun

Ben Folds’ newest song—“2020”—asks, “How many years will we try to cram into one?” (Note: the song contains some salty language and gratuitous criticism of the Tax Cuts and Jobs Act.)

Presented Without Comment, Throwback Edition

Also Presented Without Comment

Toeing the Company Line

• On this week’s Dispatch Podcast, Sarah and the guys get you up to speed on the state of the 2020 race going into the summer stretch and chew over the news from John Bolton’s book about his time in the Trump administration. 

• And be sure not to miss David and Sarah’s latest episode of Advisory Opinions, which covers, among other things, the latest developments in the Michael Flynn case and a SCOTUS decision that foreign nationals denied asylum in the United States cannot challenge that decision in U.S. courts. 

• Scott Lincicome explains just a few of the problems with the “Phase One” trade deal with China and says it was designed—perhaps unintentionally—to fail. “The entire deal rested on China’s willingness to fulfill its commitments—and that’s always been the big problem with China.”

Let Us Know

We’re going to take a wild guess and assume you were not, at age 24, a near lock to be elected to Congress. What were you busy doing at the quarter-century mark instead?

Reporting by Declan Garvey (@declanpgarvey), Andrew Egger (@EggerDC), Sarah Isgur (@whignewtons), Charlotte Lawson (@charlotteUVA), Audrey Fahlberg (@FahlOutBerg), Nate Hochman (@njhochman), and Steve Hayes (@stephenfhayes).

Photograph by Chip Somodevilla/Getty Images.