“10% Of GDP”: US Coronavirus Stimulus Package To Total $2 Trillion
First it was $850 billion. Then $1 trillion. Then $1.2 trillion. Then $1.3 trillion and the market still didn’t care, even as the fiscal stimulus package doubled faster than the number or coronavirus cases.
So in the Trump admin’s scramble to impress investors, on Saturday morning, Trump’s top economic advisor Larry Kudlow said that the latest and greatest financial package being assembled to offset the crippling economic impact from the coronavirus pandemic which according to Goldman will wipe out 24% of GDP in Q2 would total more than $2 trillion.
“The package is coming in at about 10% of GDP,” Larry Kudlow told reporters as he headed into a meeting with Republican senators. He said that would work out to a bit more than $2 trillion.
“We’re just trying to cover the right bases,” he added.
Larry Kudlow headed to a meeting to discuss emergency economic relief legislation; Photo Shutterstock.
As a reminder when TARP was originally unveiled (by serial bailout fanatic Neel Kashkari) it was a “back of the napkin” calculation which estimated US bank needs at $700 billion or 5% of the total $14 trillion in residential and commercial mortgages. Fast forward a little over a decade when we are now up to 10% of total GDP, and rising fast.
Kudlow also said that small businesses would get a payroll-tax holiday, without clarifying whether that component had been agreed to or merely was an item on the Trump administration’s wish list.
He declined to say whether the package would include more direct government spending, or appropriations, than thought. “We’ll see,” he said.
National Guard Chief: Don’t Federalize Us To Fight Outbreak – Will Waste “Billions”
Following Italy’s declaration of martial law, and with some US states like California coming very close to it amid rumors the White House has plans to mobilize the military on a federal level, the National Guard Bureau chief is hitting back against discussions to activate the guard.
National Guard Bureau Chief Gen. Joseph Lengyel told reporters at a Pentagon press briefing on Thursday that federalizing the National Guard to fight the Covid-19 pandemic would ultimately prove illogical and inefficient, as it was designed fundamentally for a state and local response.
This as President Trump mulls federal activation of the guard through Title 10. Gen. Lengyel acknowledged this is legally an option, yet would be imprudent. The general said it “would not make sense in this situation,” according to Air Force Magazine.
Chief of National Guard Guard Bureau, General Joseph L. Lengyel, via Utah National Guard/Flickr
“The best use of the National Guard is to use the National Guard for the unique authorities that it has, and that is to remain under the command and control of the networks in the states,” the National Guard general said. Another key argument was that it would essentially be “billions and billions of dollars” wasted.
“There is no need right now to have 450,000 Guardsmen on duty in any given state,” he argued. “As states need the National Guard to react to this kind of pandemic, governors have the authority to bring them on Active duty, as there are tasks and purpose for them to be used.” A federalized guard during this crisis would in reality result in “a lot of people won’t have things to do” under Title 10, given also the large numbers to be deployed.
Since Title 10 activation prohibits “military members in a law-enforcement capacity against the American,”a federal activation would inhibit troops’ ability to back-up state and local law enforcement during the crisis, Lengyel told reporters during a Pentagon press briefing.
At this point at least 27 governors “have activated parts of their National Guard” – which according to Lengyel is a better approach in terms of scaling the military response according to the local situation, which differs from region to region.
Colorado guardsmen at a drive-through testing site outside the Denver Coliseum, via AP.
With Georgia being the first to activate some 2,000 guard troops to respond to the crisis there, Gen. Lengyel said he expects “tens of thousands” to be activated in the coming days and weeks.
It should be noted there’s a further question of whether large-scale military mobilization on domestic soil would actually end up exacerbating the outbreak crisis: “Thus far, six members of the National Guard have tested positive for COVID-19,” Lengyel said.
We can’t say we’re in a recession yet, at least not formally. A committee decides these things—no, really. The government generally adopts the view that a contraction is not a recession unless economic activity has declined over two quarters. But we’re in a recession and everyone knows it. And what we’re experiencing is so much more than that: a black swan, a financial war, a plague.
Maybe things feel normal where you are. Maybe things do not feel normal.
Things are not normal. For weeks or months, we won’t know how much GDP has slowed down and how many people have been forced out of work. Government statistics take a while to generate. They look backwards, the latest numbers still depicting a hot economy near full employment. To quantify the present reality, we have to rely on anecdotes from businesses, surveys of workers, shreds of private data, and a few state numbers. They show an economy not in a downturn or a contraction or a soft patch, not experiencing losses or selling off or correcting. They show evaporation, disappearance on what feels like a religious scale.
What is happening is a shock to the American economy more sudden and severe than anyone alive has ever experienced. The unemployment rate climbed to its apex of 9.9 percent 23 months after the formal start of the Great Recession. Just a few weeks into the domestic coronavirus pandemic, and just days into the imposition of emergency measures to arrest it, nearly 20 percent of workers report that they have lost hours or lost their job. One payroll and scheduling processor suggests that 22 percent of work hours have evaporated for hourly employees, with three in 10 people who would normally show up for work not going as of Tuesday. Absent a strong governmental response, the unemployment rate seems certain to reach heights not seen since the Great Depression or even the miserable late 1800s. A 20 percent rate is not impossible.
State jobless filings are growing geometrically, a signal of how the national numbers will change when we have them. Last Monday, Colorado had 400 people apply for unemployment insurance. This Tuesday: 6,800. California has seen its daily filings jump from 2,000 to 80,000. Oregon went from 800 to 18,000. In Connecticut, nearly 2 percent of the state’s workers declared that they were newly jobless on a single day. Many other states are reporting the same kinds of figures.
These numbers are subject to sharp changes; things like large plant closures lead them to jump and fall and jump and fall. But for them to rise so precipitously, across all of the states? To stay high? That is new. The economy is not tipping into a jobs crisis. It is exploding into one. Given the trajectory of state reports, it is certain that the country will set a record for new jobless claims next week, not only in raw numbers but also in the share of workers laid off. The total is expected to be in the range of 1.5 million to 2.5 million, and to climb from there.
None of that is surprising.
The economy needs to halt to protect lives and sustain the medical system. Planes have been grounded, conferences canceled, millions of Americans told not to leave their homes except to get groceries and other necessities. Because of the emergency measures now in place, businesses have had no choice but to let workers go. The list of employers laying off workers en masse includes cruise lines, airlines, hotels, restaurants, bars, cabinetmakers, linen companies, newspapers, bookstores, caterers, and festivals. I started adding up numbers in news reports, and quit when I hit 100,000.
The economy had been plodding along in its late expansion, growing at a 2 or 3 percent annual pace. Now, private forecasters expect it will contract at something like a 15 percent pace, though nobody really knows. A viral quarantine is impossible to model, because modeling would mean knowing how long the necessary emergency measures will last and how well the government will respond with some degree of accuracy. Still, real-time measures show a consumer-economy apocalypse. One credit-card processor said that payments to businesses were down 30 percent in Seattle, 26 percent in Portland, and 12 percent in San Francisco. Nearly every state is seeing dramatic declines, with hotels and restaurants hit particularly hard.
The markets are not normal, either. The stock market lost 20 percent of its value in just 21 days – the fastest and sharpest bear market on record, faster than 1929, faster than 1987, 10 times faster than 2007.
The financial system has required no less than seven emergency interventions by the Federal Reserve in the past week. The country’s central bank has wrenched interest rates to zero, started buying more than half a trillion dollars of financial assets, and opened up special facilities to inject liquidity into the financial system.
Yet in the real economy, everything has halted, frozen in place. This is not a recession. It is an ice age.
Army Deploys To New York As NYC Reports 1 Coronavirus Death Per Hour On Friday: Live Updates
For nearly a week now, New York Gov. Andrew Cuomo has been begging the White House or the Pentagon to send in the Army Corp of Engineers to quickly transform existing businesses into coronavirus hospitals where patients from the impending surge can be isolated and treated.
If the state doesn’t quickly make up for its twin shortages of hospital beds and medical equipment, Cuomo warned, it could lead to thousands of preventable deaths.
Now, a few days after President Trump and Defense Secretary Mark Esper dispatched a Navy hospital ship to New York to help with the outbreak, President Donald Trump formally approved FEMA aid to the state late Friday night after declaring New York the nation’s first “major disaster area” since the start of the national outbreak.
Billions of dollars in emergency funding are now available to help combat the outbreak in the state, FEMA said in a statement.
“Federal funding is also available to state, tribal, and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for emergency protective measures,” FEMA said in a statement.
The decision comes after New York City Mayor Bill de Blasio claimed that his city has become the epicenter of the national outbreak, as public health authorities in the city counted at least one coronavirus-linked death per hour on Friday.
Between just 10 am and 6 pm, 14 people in NYC died from the virus, raising the death toll in America’s largest city to 43. It was the first time NYC’s daily death toll hit double-digits.
NYC Health Commissioner Dr. Oxiris Barbot warned on Saturday morning that double-digit increases in deaths may become the new normal for New Yorkers, for at least a time.
“I wouldn’t be surprised if we get to a day when we have double-digits new people dying every day,” she said at a City Hall press conference Friday afternoon.
“With more and more cases confirmed here each day, it’s imperative that the federal government does everything within its power to stem the spread of the deadly coronavirus.”
In another rare moment of political unity, Senate Minority Leader Chuck Schumer praised the president’s decision.
Pres. Trump just approved a major disaster declaration for New York to fight coronavirus.
Yesterday, Cuomo ordered 100% of the state’s workforce to stay home, effective Sunday evening. Only essential businesses are allowed to stay open. And that’s not a request, that’s an order.
“These are not helpful hints…they will be enforced,” as Cuomo said during his Friday press conference, as we reported.
The latest data show 8,299 confirmed cases in New York State. And as the state runs out of hospital beds and precious ventilators, Trump is sending in the military, which is now working on plans to takeover hotels, college dormitories and sports arenas and turn them into ICU-like medical facilities, as the Daily Mail reports.
According to the latest federal data, at least 19,624 people have been diagnosed with the virus, and at least 260 deaths have been recorded. So far, 147 people have recovered. Globally, there have been at least 275,000 diagnosed cases and more than 11,000 coronavirus-related deaths.
In other news, Switzerland reported another batch of new cases, bringing its total to 6,100 infections and 56 deaths.
As the global panic deepens, and the number of cases continues to multiply at an alarming rate, more officials are calling for the 2020 Tokyo Games to be postponed – an unprecedented event that would probably rattle confidence in global markets, at least momentarily, as the world grapples with the unprecedented situation at hand. The IOC chief rebutted these calls again Saturday morning, according to reports in the Japanese press, but it definitely makes one wonder: If things keep getting worse, how much longer can they hold off?
“The coronavirus pandemic is a public health emergency. But it is also an economic emergency…
This national effort will be underpinned by government interventions in the economy on a scale unimaginable only a few weeks ago. This is not a time for ideology and orthodoxy… We will support jobs, we will support incomes, we will support businesses, and we will help you protect your loved ones. We will do whatever it takes.”
– UK Chancellor of the Exchequer Rishi Sunak 18/3/2020
Policy-makers are scared, and rightly so. The coronavirus pandemic has delivered a massive deflationary shock to the world economy, as evidenced by the collapse in the yield on US 10 year government bond to a momentary low of 0.31% on March 9th.
A severe decline in economic activity is an inevitable side-effect of applying the precautionary principle to the virus crisis, which is nonetheless the correct course of action. The same goes for economy policy; underestimating the risks is a far worse mistake than overestimating them. Economic crises kill people too. After Japan lurched into deflation in the late 1990s, suicides leapt by an annual 10,000 cases and stayed at an elevated level for a decade. That increase constitutes a worse toll every year than the global tally for the coronavirus to date.
As this is not a financial crisis – though a wave of bankruptcies and asset price collapses could turn it into one – protecting incomes and jobs has to be the main priority. Quite how this is done will differ from country to country, but ultimately the financial resources can only be provided by governments via bond issuance supported by central banks. A simultaneous reversion to quantitative easing, as has occurred in the United States, clears the way for outright monetization.
“Today, I am making available an initial £330 billion of guarantees – equivalent to 15% of our GDP.. That means any business who needs access to cash to pay their rent, the salaries, suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms.And if demand is greater than the initial £330 billion I’m making available today, I will go further and provide as much capacity as required. I said whatever it takes –and I meant it.”
– UK Chancellor Rishi Sunak 18/3/2020
“Loans” that are used to fund running costs like wages and rent are unlikely to be paid back. Probably they will end up being deep-sixed in government accounts, along with several other non-performing assets such as student loans and public-private investments. The scale, though, will be far larger.
In the US, President Donald Trump’s more straightforward approach includes cutting payroll taxes and mailing $1000 cheques to American citizens. Although the Trump package is enormous, equivalent to 6% of US GDP, it has been criticized for being insufficient in scale, given the risks of a deep downturn. If it doesn’t work, more will surely follow. This is, after all, a presidential election year.
The key point is that money is likely to flow directly to households, as it never did when monetary policy was the only game in town. How does this differ from “helicopter money”, Jeremy Corbyn’s “People’s QE”, or the proposals of believers in Modern Monetary Theory? In essence it doesn’t, except that the proponents are the leaders of nominally conservative administrations. If the crisis does not abate soon, governments could end up monetizing the wages and salaries of a very large number of people and owning significant slices of industry.
What does all this mean for investors? In all probability, an end to the monetary policy-dominated regime in place since the Global Financial Crisis of 2008 and the investment landscape it created. A reckoning for hyped-up growth stocks on sky-high valuations. An avalanche of bond issuance. Growing risks of inflation. Currency turmoil if central banks attempt to hold yields down once normalization begins.
With a few brief blips, interest rates have been flat or declining for most of the careers of today’s government officials, investors and corporate managers. In recent years, there has been a growing belief that low rates are “structural”, driven by long-term deflationary factors such as demographics and the rise of the internet economy. If that is true, governments can borrow and spend as much as they want with no fear of the consequences.
Thanks to the coronavirus, that theory is about to be tested. And, as we have always suspected, ground zero for regime change will be not Japan or the United States, but the UK.
Kenyan Man Stoned To Death By Mob “For Having Coronavirus”
A man suspected of COVID-19 was stoned to death by locals in one African town, reported ZimEye News.
The incident occurred in Kibundani Village, Kwale County, a coastal region in Kenya, on Tuesday.
The man, George Kotini Hezron, was walking home from a local bar in the village of Msambweni when a mob of youths viciously attacked him.
…namely George Kotini Hezron while heading home from a drinking spree and on reaching Kibundani area about 3kms west of the station met a group of youth and an argument ensued as the youth took advantage of his drunkenness and started accusing him of suffering from Corona virus https://t.co/bcZsHwWHgU
Hezron was rushed to Msambweni Subcounty Hospital, where he later died of his injuries.
Msambweni Subcounty Hospital
Msambweni Sub-County Commander Nehemiah Bitok told Daily Nation Kenya that the youths stoned Hezron to death.
“While heading home, he met a group of youths who attacked him, accusing him of suffering from coronavirus,” Bitok said.
Bitok said police had launched an investigation into the possible coronavirus hate crime.
“No arrests have been made, but we have launched investigations,” he said.
Separately, we’ve reported on the first possible coronavirus hate crime in the US, an Asian man was recently stabbed to death by a man wearing a medical mask in NYC. Also, Asians in California are stockpiling weapons and ammunition out of fear that they might be attacked.
Bitok warned members in the community that taking the law into their own hands and killing suspected COVID-19 carriers is illegal.
Kenya’s health ministry has reported a total of seven confirmed cases, with no deaths. We noted earlier this week that, with the lack of test kits on the African continent, a virus crisis is “looming.”
A man suspected to have coronavirus has been beaten to death in Kenya.
“Reality is that which when we stop believing in it doesn’t go away.”
– Philip K. Dick
In March of 2003, we broke ground on the first real thing I ever built. The house I currently live in. Then I understood that there was only one way this economic and political system ended, badly.
And I knew then that I was woefully unprepared for the challenge. When I started building my house I could barely drive a nail straight. By the time the first part of it was finished I could lay a square of asphalt shingles with the best of them…. if only until about 10 am or so.
I could now solve logistical problems of much larger scale. I learned that building a house wasn’t one big task but a million little ones, some good and some, well, not so good.
My wife and I had a lot of help, to be sure. We leveraged the skills, labor and knowledge of family and friends.
My house became a kind of community project with some weekends having as many as eight or ten people milling about like semi-competent Amish men setting trusses, digging trenches and installing windows.
And I’m forever in the debt of those who gave up their Saturday to work in the singularly horrific heat of a north central Florida summer, a place I’m sure Dante had in mind when he wrote about the eighth circle of Hell.
I figured then we had about five to eight years before the system would break. During the 2008 crisis I was convinced that, ‘This was it.” It turned out to be bad but the world wasn’t quite ready to give up on the system it had built.
And we allowed the central banks to coordinate a global bailout. But that was granted with the explicit understanding that there would be no next time or there would be hell to pay on both sides of the traditional political aisles.
Welcome to the Coronapocalypse.
Regardless of what you may think about the origins of COVID-19, bio-weapon or not, ‘just the flu’ or the new plague, the reality is that it is here. The response to it is real and the damage it has had on the global economy is real.
It doesn’t matter at this point in time whether the response is the right one or the wrong one. Because in an age where perception is more important than reality and has been that way for so long, we have no real frame of reference to guide our conclusions.
Prices and costs have been distorted beyond all recognition to the saved capital they represent. The epic meltdown of markets speaks to just how insanely overvalued the world was once the layers of credit issued contracted.
In the end, all we have are our observations. And those observations are intensely personal. And most of the the time the conclusions we draw from them are wrong no matter how tightly we believe in them.
Be that as it may, we still have to make choices. We still have to act.
And, if this is truly now a survival-like situation, one that I personally tried to prepare for nearly a generation ago, that means we have to deal with reality.
We have to put away the childish things we’ve been fighting over for the past five years politically.
How ridiculous and insipid do the identitarian fights over gender, race, sex and color look now? How dangerous and stupid does all that capital, that time spent look now in hindsight when today people with skills, humility and high executive function are needed.
Do you really care today if the guy behind the meat counter at your local supermarket is a MAGApede or a Bernie Bro, hates gay people or is a closet tranny?
If you do then I suggest you stay home and reassess your priorities and your choices.
The reality is that now that the damage to the economy has been done we will need each other more than ever, regardless of what we thought about each other yesterday.
The reality is governments are grabbing for insane levels of power. Martial Law is here in Europe. The U.S. isn’t far behind if we look at how some governors and mayors have acted.
The reality is that the more power governments grab the less capable of protecting you, your family and your community it was before that. It will view you as a threat. It will treat you as less than human because your disobedience threatens their control.
If the Trump administration is smart it won’t go there. If Trump wants to ensure the U.S. is the destination for global capital in the near term, he won’t go to where Europe goes.
Because the way to restore confidence in both a currency, a people and a government is to not panic. Lead and show competence and trust.
Those that over-react, enforce one-size-fits-all mandates become incapable of solving problems, only maintaining the current misery.
So we have to be strong enough and brave enough for commerce to flow. If we aren’t then stay out of the way of healthy, low-risk people taking real risks necessary to keep the lights on, the sewers functioning and the food supply from collapsing.
Celebrate that guy behind the meat counter or restocking the shelves. Because the life he saves may be yours and vice versa.
Yes, some people will make the wrong choice, but most won’t. Stop using them as straw men to grind your political axe. Old habits die hard but guess what? You’re not an old dog.
We’re moving into that dangerous area of zero tolerance which implies maximum costs for marginal net benefits.
Striking the necessary balance to keep our communities alive is how we best fight back against this threat — the government overreach or the virus itself.
It means realizing that bad people will do good things and good people will do bad things. It means decisions made today may need to be reversed tomorrow.
Top down order separates us from our greatest strength, our ability to try new things, solve new problems and turn what is into what will be.
It means keeping your opinions tempered, your humility high and finding ways to solve real problems that alleviate current and potential suffering.
It means realizing you don’t have all the answers, and pretending like you do is literally a matter of life and death.
The economy isn’t some big aggregate thing. That’s the fundamental flaw of all dominant economic thinking, these concepts of aggregate demand and aggregate supply. They don’t exist. They aren’t real.
We talk about them like they are but they aren’t. They are pale and unfocused reflection of trillions of small decisions taken by billions of people everyday.
And no matter how much you try to model reality by looking at the big numbers, the reality is that you only see things through the densest of fog, near blind and full of hubris.
This is the central flaw in all forms of central planning, the lack of specific knowledge to come up with the right policy decisions.
That’s not ideology. That is fact.
Any guess at my behavior, no matter how educated, carries with it a measurable error which when multiplied by the number of decisions I make per day and the number of people whose actions you are trying to aggregate makes the entire exercise a futile and dangerous attempt to play god.
Even God doesn’t play dice with the Universe.
And the sooner we give up our grand ideas of top down control through the decisions of wise and insouciant verified smart people the sooner we can deal with the reality of the life in front of us.
Today the world is contracting, not ending. It’s a smaller, tighter world than it was yesterday. That means the closer your relationship to someone, the more valuable they are.
The people in charge now if they are competent, if they have a shred of decency and humility, will realize by getting out of our way we can thrive. And if they won’t, then we have to do the other thing humans are really good at, subverting crude attempts at control.
That’s not ideology folks, that’s who we are. And I love people for it.
It’s simply giving up control over what you cannot and staying focused on what you can. It’s the humility to know that I don’t have the answers to the problems of the world but maybe the problems don’t exist as I think I see them.
We’ve been giving a huge wake up call that what we’ve built is a house of cards. You’ll hear a lot of cries for people to ‘get local.’ Use the time you have in front of you to build skills you didn’t have yesterday. Find ways to be more valuable to those nearest you that may need you tomorrow.
Forge real relationships with people you never thought you could.
But most importantly, it’s time to stop denying that which is in front of us.
“We Can Sh*t For 10 Years” – Dutch PM Mocks Toilet-Paper Shortage Rumors
With concerns rising in the Western world that toilet paper shortages have developed due to panic hoarding among consumers amid the COVID-19 outbreak, the prime minister in the Netherlands has reassured a fellow citizen that the country has at least a decade worth of the fluffy stuff, reported RT News.
Dutch Prime Minister Mark Rutte was walking through a supermarket on Thursday when a shopper asked him if the country had enough toilet paper. Rutte’s response:
“There is also enough for the next 10 years throughout the Netherlands.”
“We have so much, we can sh*t for 10 years,” he added.
Premier Rutte op bezoek in een Albert Heijn in tijden van corona: ‘er is zo veel wc-papier, we kunnen tien jaar poepen!’ pic.twitter.com/z9puo3HK3r
Rutte was visiting a local supermarket to show his support for workers amid these challenging times. He said earlier in the week, in a televised address to the nation, most residents would get COVID-19.
“There’s no easy message to you this evening… The reality is that a large part of the Dutch population will be infected by the coronavirus. That is what the experts are telling us.”
He said a full lockdown of the country is unlikely as he wants to build “group immunity” while a vaccine could be 12-18 months away.
The Netherlands has confirmed 2,468 cases of the virus, including 77 deaths as of Friday morning.
Meanwhile, in America, Costco stores have run out of toilet paper.
‘Vague’ Legislation Gives British Police Powers To Detain “Suspected COVID-19 Carriers”
The Covid-19 outbreak is on the verge of hurling the UK into a nationwide lockdown, or maybe at least London for starters.
We warned on Monday that “the UK has missed the critical containment window to implement social distancing policies that would flatten the curve and slowdown infections, suggesting the country could see an exponential rise in Covid-19 cases over the next month.”
And wow, the epidemic curve is exponential (as of March 20, 0900ET, there are 3,269 confirmed cases and 144 deaths across the country):
With that being said, we noted on Friday morning that upwards of 10,000 troops stand ready to be deployed if social order deteriorates, mostly because supermarkets are running out of food and the healthcare system is “on the brink of collapse.”
As a direct response to the chaos unfolding, the British government is now giving police, public health and immigration officers the right to arrest any suspected COVID-19 carriers under a new emergency bill, reported RT News.
The 329-page emergency bill was published on Thursday and is part of the government’s efforts to enforce more draconian measures to flatten the curve to slowdown infections.
UK Coronavirus Bill
The bill reads, “public health officer, constables and (in some circumstances) immigration officers with the means to enforce sensible public health restrictions, including returning people to places that they have been required to stay. Where necessary and proportionate, constables and immigration officers will be able to direct individuals to attend, remove them to, or keep them at suitable locations for screening and assessment.”
The government also can limit social gatherings for the “purpose of preventing, protecting against, controlling” the virus outbreak.
These draconian measures come as a secret government document was leaked earlier this week that said 80% of Britons could be infected, and the virus would not clear out of the country until Spring 2021.
NATO’s massive military exercise ‘Defender Europe 2020’ has been effectively canceled over the covid-19 pandemic. Instead of hype about Russia, perhaps the alliance should address the actual danger to Europe, analysts tell RT.
The Pentagon had already deployed some 6,000 troops and 3,000 pieces of equipment to Europe by March 13, when the transfers were halted amid the rapid spread of the coronavirus. The decision to cancel the drills actually improved European security, since the risk of covid-19 transmission among the troops – and from them to civilians – was unacceptably high, former US Marine Corps intelligence officer and international security commentator Scott Ritter told RT.
Canceling the exercise was “the most prudent action possible” from the political standpoint, said Ritter, as the fallout from US troops infecting civilians with the coronavirus would have made future such exercises “problematic.”
“The exercise was more political than practical, a show of force designed to deter Russian ‘aggression’ in the Baltics,” Ritter added. Poland and the Baltic states have clamored for a bigger NATO – mainly US – presence in their territory since 2014, hyping the threat of “Russian aggression” by pointing to the conflict in Ukraine. The US has happily obliged, even under the Trump administration, while NATO maintained its increased deployments on the Russian border were entirely defensive in nature. Needless to say, Moscow is not buying it.
“There’s no actual military threat to Europe. Nobody is going to attack it,” Konstantin Sokolov, geopolitics expert and research fellow with Russia’s Academy of Natural Sciences, told RT.
Political relations within NATO have been fraying for months, with unilateral actions in Syria by the US and Turkey prompting French President Emmanuel Macron to describe the alliance as “brain dead.”
“The crisis of political relations between the US and its allies is getting worse in the current situation, which is aggravated by selfishness of all sides,” Sokolov told RT. The US and its European allies have been acting on their own to cope with the virus, shutting down borders and implementing strictly national policies. The main threat to Europe is the coronavirus, not Russia, says Vladimir Batyuk, a senior fellow at the Russian Institute for US and Canadian Studies.
“In Italy alone, the virus has killed several hundred people. Russian military action didn’t hurt a single person from European NATO member states in the last three decades,” Batyuk told RT. There were 2,500 recorded deaths from the coronavirus in Italy as of Tuesday.
Rick Rozoff, peace activist at StopNato International, thinks it’s incredibly ironic that a virus seems to have derailed, however temporarily, NATO’s strategic priority to expand to the Russian border.
“This is a tactical retreat, in the face of nature,” he told RT.
“I’m going to have to assume that, if and when the coronavirus is brought under control, that we’ll see the resumption of such military provocations, large-scale military exercises on Russia’s western border.”
Rozoff pointed out that the Atlantic Council – the alliance’s massive think-tank and lobbying arm – had just called for an increased US troop presence in Europe under the pretext of fighting the coronavirus, same as they’ve done with anything from terrorism to climate change and women’s rights over the years. Some of those US troops may be more urgently needed at home, he added, as over 1,000 National Guard personnel have already been called up to help with the pandemic.
‘Defender Europe 2020’ was supposed to be the largest NATO exercise in 25 years, encompassing smaller exercises that were scheduled to take place in Belgium, the Netherlands, Germany, Poland, Lithuania, Latvia and Estonia starting in April and continuing into May.
