Experts explain executive orders and the impact on economy
BISMARCK, N.D. (KFYR) - President Donald Trump signed four executive orders Saturday designed to bring relief to those suffering financially due to the coronavirus pandemic.
A series of new, executive orders with one goal: “You have relief, and those are four targeted solutions and that will help deal with the pain,” said U.S. Office of Trade & Manufacturing Policy Director Peter Navarro. Leaving some concerned.
“They’re absurdly unconstitutional,” said Democratic Speaker of the House Rep. Nancy Pelosi.
The orders provide a payroll tax holiday for working Americans, extend unemployment benefits at a reduced rate of $400 per week, extend a federal moratorium on evictions and defer student loan payments through 2020. Experts say the orders could have major long term economic impacts.
The payroll tax suspension gives both employees a break on taxes and employers a break on their required match.
However, as of now, the deferment will only last through Dec. 31.
“You still owe the tax. And, your employer will have to take it out of your check, either the last check of the year or the or the first check of the new year. That’s a problem because if people take this money and spend it, they’re still going to owe it,” said Eugene Graner of Heartland Investor Services.
Unemployment dollars benefit those without a job and have the potential to stabilize the economy.
“In a perfect world, this money helps the economy by stabilizing the flip effect. Or, the living expense effect. It could maintain that apartment rentals get paid. Mortgages get paid. So there’s no defaults. It doesn’t necessarily make the economy thrive, It just helps sustain the economy by stopping defaults,” Graner said.
However, Graner says the creation of so much new money could cause inflation and weaken the U.S. dollar. Extending the moratorium on evictions will help those in federally subsidized housing who are struggling to pay bills due to COVID.
However, that leaves landlords vulnerable, potentially creating a bigger problem.
“Now, you’re going to have bankruptcies that start occurring because people that are owning these apartments. All of a sudden, ‘I can’t pay my bills because I don’t have the revenues coming in from the renter.’ It’s like the renter’s given all the advantage, not the owners of the properties,” Graner said.
Graner says student loan deferments shouldn’t impact the economy significantly either way.
Experts speculate there will likely be legal challenges due to push back from democrats who say the relief orders are unconstitutional.
Copyright 2020 KFYR. All rights reserved.