Economic Statistics Indicate Worst Of Pandemic Is Behind Us

This week’s Courier Herald column:

Down at the Georgia Department of Revenue, taxpayers have made it rain.  Georgia’s tax receipts for the month of May were up 68% from a year ago.  Yes, that number is correct.  The state took in more than one and two-thirds of the tax receipts as it did during the same month a year ago.

There are, of course, some unusual circumstances that must be acknowledged with the unusual number.  Federal tax returns were required to be filed in May of this year, as opposed to July of last year or April in non-pandemic years.  In addition, May of 2020 was weeks 7 through 10 of our “two weeks to flatten the curve”.  May of 2021 saw most pandemic restrictions lifted and our state’s economy almost fully re-opened.

Many of the trillions of dollars pumped into the U.S. economy via federal fiscal stimulus programs and the easy monetary policy of the Federal Reserve found their way to Georgia.  Consumers are spending money, as evidenced by May’s 46% increase in sales tax revenues over a year ago, when many retailers were closed.  With one month to go on fiscal year 2021, sales tax revenues are up 12% over FY20.

Georgians are also buying cars.  Title Ad Valorem Taxes are up 125% when compared to May of last year, and up 7.5% year to date. 

These taxes on consumption are up because Georgians have had more money to spend, and now have an open economy in which to spend it.  This is after Georgians paid their cut to the state in the form of income taxes, which collections were up 21% on a year to date basis from FY20.

One year ago we had much to fear, and the state of the economy was just one of those fears.  While there were many costs of the pandemic that were personal, institutional, social, and economic, the vitality of the state’s economy has not been a casualty of the Covid virus.

Georgia’s employment has returned to near record levels, with “help wanted” signs now virtually wallpaper in most commercial establishments.  April’s unemployment rate was already down to 4.3%, with May’s official report still a few weeks away. 

To put this number in perspective, the unemployment rates for April 2019 and 2018, one and two years before the pandemic, were 3.8% and 4.1%, respectively.  The scales have tipped from Georgians worried about their ability to find work to employers unable to staff their businesses.

While not every Georgian’s story is the same and not everyone will emerge from the pandemic economically whole, the statistics, in aggregate, paint a clear picture.  Georgia’s economy is no longer in crisis mode. 

For the economy to continue to heal, it is time for more solutions from the private sector.  Extreme government intervention, necessary and required one year ago, has served its purpose. 

It was, after all, government mandates that closed many businesses and created much of the unemployment.  Even many of the most ardent limited-government conservatives agreed that a government induced shut down required government paid compensation.

A year later, vaccines are plentiful and those restrictions are all but gone. It’s time to acknowledge that the “emergency” portion of the pandemic is over. 

Georgia and our nation will continue to face and overcome many pandemic related policy issues ahead.  This will include fixing the damage done to our children who experienced suboptimal learning conditions and limited instruction for almost two years.  We must now amortize as much as and additional ten trillion dollars in new national debts when final tallies are rendered.  And we must confront a myriad of international trade, intellectual property, and public health issues that the pandemic and its aftermath has laid bare.

To do this constructively and effectively requires we do this methodically and proactively.  We must immediately rid ourselves of a panicked emergency, crisis driven mindset. 

Old problems remain and new ones have been added to our table.  Let us not waste time in tackling them, but let us do it in a deliberate and focused manner.