Judd Gregg: Observations from inside the lockdown

Judd Gregg: Observations from inside the lockdown
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If nothing else is positive about the coronavirus, at least it gives us time to think about where we are and where we are going as a nation.

Winston Churchill famously said of us: “You can always count on Americans to do the right thing after they have tried everything else.”

It’s a rather appropriate thought for our present state of affairs.

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The Congress and the president have, after a much too extended dance, finally reached an agreement on a legitimate and huge package of initiatives aimed at easing the harms, both physical and economic, done by this pandemic.

It took too long to get there and the final product leaves out some critical needs.

But, on balance, it is big enough and broad enough that, if it is implemented effectively, it should significantly abate much of the damage that this national shutdown is doing on Main Street.

Now is the time for responsible leaders to stop pointing fingers and to lean into the work of helping those the package is aimed at — specifically, the healthcare community, small business, industries that have suffered disproportionate impacts, and folks who are out of work.

In time there must be an evaluation, and it must be honestly done, as to why the nation was so unprepared for this virus’ effects, which were fairly predictable.

We need to get ready in a much more aggressive manner for the follow-on viruses that will potentially occur.

In the early years of this century, after the SARS and anthrax events, Congress set up a program called Project Bioshield which was supposed to focus on developing therapies for a biological event.

Unfortunately, over time it was under-funded and muted.

Coming out of this crisis, a significant agency needs to be created that crosses the authorities of the National Institutes of Health, the Food and Drug Administration and the Department of Health and Human Services. It should be dedicated solely to anticipating and rebuffing every conceivable biological threat, both manmade and natural-mutated.

Dr. Anthony Fauci would be the ideal person to head up this body, if he would take on the task. It should also have Cabinet status and extremely broad powers.

We are now seeing the most massive expansion in the money supply in our history. The virus has generated an economic shock unlike any seen since the Great Depression.

The lesson of the Great Depression was to explode liquidity.

This lesson has been learned.

It was practiced during the financial crisis of 2008.

Today, both the Federal Reserve, with monetary policy, and now the Congress and the President with fiscal policy, are putting it on steroids.

This expansion is necessary to put people back to work and allow the wheels of commerce to keep rolling even amid the shutdown of the economy, nationally and globally, that the virus is causing.

It is also totally unprecedented.

With all this new money being pumped into the engine of the American free market, there will be a reaction. It is inevitable.

The country was already on course to have a serious debt issue towards the end of this decade, when our debt-to-GDP ratio would have passed 100 percent due to the massive deficits the federal government was running.

This timeframe for this problem has now been accelerated.

It is not an issue today; it will probably not be an issue in the immediate future because the recession that will be caused by the reaction to the virus is an inherently deflationary event.

However, at some point, probably towards the middle of this decade rather than the end, there will be an accounting for the printing of all this money and the dramatic expansion of the federal debt.

It will probably come in the form of a currency crisis.

People, especially those who lend to us or fix their commercial activity in dollars, will lose confidence in the ability of the nation to pay back their debts with dollars that are worth the same as those lent or used in commerce.

This will be a very, very large economic event and it will potentially cause another desperate crisis.

The nation’s leaders need to start today, even though we are deep into the need to create this liquidity, to consider ways to retain confidence in our currency.

This needs to be a bipartisan effort.

It needs to involve a gathering of the best financial minds we have in the nation.

They should have a direct authorization from Congress to develop plans and initiatives to reduce the impact of this reduction in the worth of the dollar.

It may be too much to expect a Congress with a horizon that barely looks over the next election to do this, but if its leaders really want to protect and preserve the nation’s future, it should be done and soon.

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On the left, there is deep antipathy to carbon and especially oil and gas. But almost every industry and undertaking that is being affected by the dramatic drop-off in activity on Main Street is also affected by the need for oil and gas.

The Saudis in the middle of our national economic crisis have decided to declare what amounts to war on America’s oil and gas producers.

The price of oil has been driven down to a point where its producers here in the United States are being decimated.

We could soon be back to that very unfortunate time where America was not energy independent.

The Middle East will once again become a political problem driven by our need for oil.

This is not a place to which we should return.

At a minimum, as a response to Saudi aggression, Congress needs to authorize and fund the purchase of oil for the Strategic Petroleum Reserve. This would be a good deal for the taxpayers at the present price and would help to stabilize domestic production.

The self-proclaimed green folks of the democratic left have opposed this. Their position can only be excused if you believe we ought to become dependent on the vagaries of Middle East politics again.

Nobody shakes hands anymore, groups do not congregate, people wash their hands a lot and kids learn from a distance. The virus has changed much about our culture.

But it has not changed is the natural resilience of our people and our country.

We have a singular advantage over the virus and, for that matter, over most of the world.

We are an inherently optimistic nation, filled with people, and even a government, who will do what is right after we have tried everything else.

We are now on the course of what is right.

Judd Gregg (R) is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee, and as ranking member of the Senate Appropriations Foreign Operations subcommittee.