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Dispatches from the COVID-19 Financial Front

 
 
jespah
 
Reply Sat 11 Apr, 2020 10:38 am
The human tragedy and cost of COVID-19 are of course awful and are only going to get worse. I'm not trying to minimize that with this discussion.

Rather, I don't want to ignore another big, fat elephant in the room, the one with the dollar sign painted on his/her back.

There is a large financial cost here, and there will be more, in no real order:
  1. Lost incomes from deceased or permanently disabled workers due to COVID-19
  2. Layoffs, furloughs, and reduced pay
  3. Price gouging
  4. Price increases not due to gouging but due to shortages from the already erratic supply chain
  5. Lost revenues to leaseholders and landlords, car dealers and other creditors, due to people's inability to pay their bills
  6. Credit scores falling
  7. Businesses shutting their doors for good (if you think every restaurant will come back whole after this, you've got another think coming)
  8. Affected housing market (people can't visit in person, virtual tours aren't a great substitute, folks saving $ and not looking to buy, etc.)
  9. 16 million new unemployment claims in the last 3 weeks, with an estimate of about 10% of jobs vaporizing (see: https://www.bls.gov/news.release/pdf/empsit.pdf)
That's probably enough, eh?

Currently, the CARES Act (that's the relief package) stands at $2 trillion. Something like $364 billion of that is supposed to go to small business loans. Most of those loans will be forgiven if businesses don't lay off more than 25% of their workforce. But there are also businesses which by definition aren't eligible, like casinos, the cannabis industry (probably even medical), etc. Even with the limitations on it, this program is already in trouble and running out of money (see: https://www.forbes.com/sites/sarahhansen/2020/04/10/most-small-businesses-applied-to-the-paycheck-protection-program-and-most-are-still-waiting-for-the-money/#5c537cef54fb). Currently, the feds are looking to add another $250 billion to this program, but that, too, will likely not be enough.

Around $425 billion of the CARES Act is going to state governments. There's more in the text of the bill (see below for the URL).

Then there's the $ for American individuals. $1,200 per person who makes less than $100,000 per year ($150,000 if filing jointly) and $500 per minor dependent. Undocumented persons are not eligible for the relief checks. Oh, and currently only $425 billion is set aside for this purpose (see: https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf)

Current US population is around 329.5 million (see: https://www.census.gov/popclock/). Current population of undocumented immigrants is about 10 million (see: https://www.brookings.edu/policy2020/votervital/how-many-undocumented-immigrants-are-in-the-united-states-and-who-are-they/)

A little under 30% of all Americans make $100,000 per year (see: https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/). And about 76% of the population is over 18 (see: https://en.wikipedia.org/wiki/Demographics_of_the_United_States).

Let's pull the 10 million undocumented folks and 98.850 million folks making over $100,000 per year right off the top. That leaves us with 220.65 million people eligible for a stimulus check. 76% of them are 167.694 million. $1200 apiece for them is $201.2328 billion. The other 24% (children) is 52.956 billion. $500 each for them is $26.478 billion.

Add those together, and the payout is expected to be around $227.7108 billion. This doesn't account for people who the feds can't find for whatever reason. But be that as it may, the $425 billion set aside for payouts to individuals will be a one-time, possibly a two-time thing and that's it.

I realize it's inevitable that this discussion will become political. Please try to be civil to your fellow human beings. But if you want to claim this is all a hoax or due to 5G or any other such nonsense, go peddle your bullshit elsewhere and don't pollute my thread with it.

Thank you for your anticipated cooperation.
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Type: Discussion • Score: 8 • Views: 2,558 • Replies: 57

 
Brandon9000
 
  1  
Reply Sat 11 Apr, 2020 11:15 am
Whenever the decision is made and implemented that people can begin working and assembling in large groups again, people will die as a result. If there is a group working in close proximity of say 50 people and one has the virus at the time the group assembles, more than one may well have it by the time the group disperses. When we talk about allowing people to work in an office, eat in restaurants, go to theaters, etc., the question is really how many additional deaths are acceptable.
jespah
 
  5  
Reply Sat 11 Apr, 2020 11:56 am
@Brandon9000,
Yeah, the talk about 'reopening the economy' is all well and good (and a lot of people already could use the $ relief), but people are going to die from that.
maxdancona
 
  -2  
Reply Sat 11 Apr, 2020 12:20 pm
@jespah,
jespah wrote:

Yeah, the talk about 'reopening the economy' is all well and good (and a lot of people already could use the $ relief), but people are going to die from that.


We are shutting down the economy to keep our health care system from being swamped. If we have more sick people then we have hospital beds, then we have a much bigger problem.

At some point we all need to go out into the world again. And, all of us are going to have to risk getting the virus. That is a risk that we can live with; a risk we must live with. If the number of people getting sick is far lower than hospital capacity... your risk of dying isn't that high.

Once we deal with the immediate risk of a health care disaster, we will have to go to something resembling normal. Remember last year... where people got sick and died just like every other year? That is what normal is.

jespah
 
  4  
Reply Sat 11 Apr, 2020 12:33 pm
@maxdancona,
Gee, I had no idea people died before this year.

Or that hospitals would have limited beds. Or what risk is.

Tell me more.
edgarblythe
 
  5  
Reply Sat 11 Apr, 2020 12:33 pm
The looming depression if and when it comes in conjunction with the consequences of the shutdown makes it dire for all of us. I don't know that life can ever be "normal" here again.
0 Replies
 
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maxdancona
 
  -4  
Reply Sat 11 Apr, 2020 01:18 pm
We had the same conversation after 9/11 (I think I hit on something here). People were saying we never go back to normal and that the economy would never come back. And they were right... some things did change. Every since it has been a lot more difficult to get on an airplane.

But society went on. We traveled again. The economy came back. We did OK and went on with our lives.

That's all I am saying.
0 Replies
 
Sturgis
 
  3  
Reply Sat 11 Apr, 2020 02:30 pm
@Brandon9000,
Quote:
...how many additional deaths are acceptable


Zero. Far too many already. Whether the total number could or would or should have been lower is not the final point now. The The final point is doing whatever can be done to bring this medical crisis to its knees and then an end.
0 Replies
 
jespah
 
  3  
Reply Sun 12 Apr, 2020 07:11 am
Sign up for direct deposit from the feds to get a stimulus check faster: https://fiscal.treasury.gov/GoDirect/
0 Replies
 
maxdancona
 
  -3  
Reply Sun 12 Apr, 2020 08:04 am
Is there any room for a rational middle here. Everyone seems to either be a doomsayer or a denier. Am I the only one who is neither?

How do we chart a logical path through this balance public health with social and economic needs to get past this crisis with as little pain as possible? Obviously people are going to die. Obviously the economy is going to take a hit. And, obviously this crisis will end and things will get back to normal at some point.

Optimism in a time of hysterical panic is never appreciated... but here goes.

1) I think the economy comes back fairly quickly. I think the unemployment rate falls below 7% a couple of months after the lockdown is lifted and slowly from there. There is still money. There is still demand. Supply chains that are on hold are still viable. People still have skills and companies have human resources ready and waiting.

2) It seems inevitable that many small business and restaurants will go out of business. Although many will not.

3) There will be a lot of yelling and screaming between people who wipe down individual grapes with bleach before eating, and people who just want to get back to a dance club. This screaming has already started, the volume will increase until it is intolerable.

maxdancona
 
  -4  
Reply Sun 12 Apr, 2020 08:09 am
@maxdancona,
The political policy is what interests me (this is a comment about policy more than politics). Assuming that Joe Biden is the next president he will be tasked with managing the economic recovery.

It is going to be a tricky job. There is political pressure from the public to not open the economy. There will be mounting economic pressure to open the economy anyway. Taking a step in either direction will make lots of Americans unhappy.

If Biden is lucky, he can get Trump to do the dirty work for him. If Trump reopens the economy and calls for people to "get out and start spending", that will enrage half the country and thrill the other half.

That will give Biden a lot more leeway to make policy in the middle.
0 Replies
 
Brandon9000
 
  1  
Reply Sun 12 Apr, 2020 07:01 pm
If you allow people to congregate in large groups any time in the next few months, it is inevitable that the rate of death from coronavirus will increase. What must be decided is how many preventable deaths are acceptable.
maxdancona
 
  -2  
Reply Sun 12 Apr, 2020 08:54 pm
@Brandon9000,
Brandon9000 wrote:

If you allow people to congregate in large groups any time in the next few months, it is inevitable that the rate of death from coronavirus will increase. What must be decided is how many preventable deaths are acceptable.


That is true. We have to make these types of decisions all of the time. Every 5mph we raise the speed limit, we increase the number of automobile deaths 8% (this is a function of the legal speed limit, not how fast people actually drive). By raising the speed limit from 55 to 65mph we are deciding that thousands of people are going to die.

That is not to say these decisions are every easy or straightforward, in fact human beings seem to have a difficult time making these sorts of trade offs consistently.
livinglava
 
  -2  
Reply Mon 13 Apr, 2020 06:53 am
@maxdancona,
maxdancona wrote:

Brandon9000 wrote:

If you allow people to congregate in large groups any time in the next few months, it is inevitable that the rate of death from coronavirus will increase. What must be decided is how many preventable deaths are acceptable.


That is true. We have to make these types of decisions all of the time. Every 5mph we raise the speed limit, we increase the number of automobile deaths 8% (this is a function of the legal speed limit, not how fast people actually drive). By raising the speed limit from 55 to 65mph we are deciding that thousands of people are going to die.

That is not to say these decisions are every easy or straightforward, in fact human beings seem to have a difficult time making these sorts of trade offs consistently.

And what about the low driving age and how traffic crashes are the leading cause of death among young people?

Automobiles and their infrastructure are harmful in so many ways yet we never try to minimize the footprint of the automobile and its infrastructure because they generate so much debt-paper to trade.
0 Replies
 
livinglava
 
  -2  
Reply Mon 13 Apr, 2020 06:55 am
@Brandon9000,
Brandon9000 wrote:

If you allow people to congregate in large groups any time in the next few months, it is inevitable that the rate of death from coronavirus will increase. What must be decided is how many preventable deaths are acceptable.

To do that, you would have to figure out how much people can do economically to sustain themselves without returning to shared workplaces.

I.e. what is more productive about going to work instead of working remotely from home, and what is limiting the implementation of remote-work capabilities?
0 Replies
 
Setanta
 
  2  
Reply Mon 13 Apr, 2020 07:13 am
Ah yes, remote work . . . remote carpenters, remote electricians . . . if your toilet overflows, maybe you can get a plumber to just call it in. Assembly lines, delivery companies, timbering operations, farming, cleaning and housekeeping as well as dry cleaning--oh yeah, they must be slugs if they haven't figured out how to do it remotely.

There's never a shortage of idiocy at this site.
livinglava
 
  -3  
Reply Mon 13 Apr, 2020 08:15 am
@Setanta,
Setanta wrote:

Ah yes, remote work . . . remote carpenters, remote electricians . . . if your toilet overflows, maybe you can get a plumber to just call it in. Assembly lines, delivery companies, timbering operations, farming, cleaning and housekeeping as well as dry cleaning--oh yeah, they must be slugs if they haven't figured out how to do it remotely.

There's never a shortage of idiocy at this site.

The idiocy lies in people who jump immediately to ridiculing the possibility of innovation before actually putting their minds to work figuring out potential solutions.

No all imaginable solutions end up being viable, but you don't know that until you put them on the drawing board and figure out what bugs there might be to iron out.

Plumbers, carpenters, etc. can work remotely by coaching and walking people through skilled tasks in their own homes. If an experienced worker tells you step-by-step what to do to fix your own problem, it will get fixed that way.
Setanta
 
  2  
Reply Mon 13 Apr, 2020 08:25 am
@livinglava,
OK, slick, explain how "remote" plumbing will work.

You really should engage your brain before slipping the clutch on you mouth (or in this case, the keyboard).
Linkat
 
  2  
Reply Mon 13 Apr, 2020 08:27 am
@jespah,
One group being left out is students - those that are 17 - 22ish - still dependent on their parents. Nothing for these - this includes juniors and seniors in high school. And college students.

Weird as this is a big expense to parents - paying for college tuition still even though classes are just virtual and kids still in high school.

Just doesn't make sense.
0 Replies
 
 

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