Another 1.3M Americans File for Unemployment
forbes.com
forbes.com
This is an anecdote, but my brother was furloughed and has been waiting on any money (including the first stimulus) for literally months
Maybe we will learn a lesson from this, but the number one political priority right now seems to be indemnifying businesses from pandemic-related harm caused to their customers and employees, so I’m not optimistic.
I sort of assumed that people _must_ be receiving money because there's no way Americans in the lower deciles of savings would be able to pay their bills consistently without work or stimulus. If there's no stimulus and no work, how are they paying bills? Is it on credit? Was there actually some savings?
The fall/winter is going to be an absolute disaster because you can’t fix anything about the economy without getting the pandemic under control, which a large percentage of our leaders in the US have decided they have no obligation to do.
The mainstream of the Democratic Party has advanced little that would address any of this, mostly quibbling over means testing income supports and lurching right. And we can just look at that state of the pandemic in the US to know what the other side thinks we should be doing.
I often wonder how painful things will have to get to enact some change with the checked out masses. What will happen if we reach that point?
More riots, looting, autonomous zones, and probably hostile us army deployments stateside.
Also, we shouldn't forget that Michael Bloomberg decided to run last-minute as a Democrat, with the Democrat party changing the applicant rules so that he could specifically run.
The whole political apparatus is entirely corrupt. I'm not sure voting helps at this point. We have a massive amount of people who are on the last of their savings, with no unemployment benefit coming their way to help out. This may be the beginning of a revolution, if people are angry enough, maybe.
There's a massive, massive class divide between generations and ultimately this pandemic is going to explode it even further. We're still in the fingers-in-our-ear phase.
Also there have been temporary measures in place for things like utilities, ISPs, mobile phone plans etc. where people will keep accruing obligations on their bills without the services being cutoff. However it seems that those programs are about to come to an end. Locally where I live the utility service here said they will start doing cutoffs in August.
So I think it's a mixture of some amount of savings, some access to credit, and then a kicking of the can down the road for a few months. So my guess overall is that basically we are simply delaying the problem in a bunch of different ways. But at the end of that delay is going to be a lot of economic hurt when those bills actually come due.
My wife and I looked into several different personal or short term loan options for our upcoming IVF cycle(approx 30k$). Most banks have either stopped offering them completely or made the requirements much harder. The two of us with credit scores of 750+, combined 200k annual income and little existing debt couldn't get approved for a simple 5k$ loan.
I fear for those that have a more dire need for the cash than we do.
If you have bad credit but have over $1,000 in cash, go and get an unsecured loan for roughly 90% of your cash on hand. Ideally the terms should have a negligible or nonexistent prepayment penalty. Once you have the loan, repay it within 2-3 business days.
Rinse and repeat until your credit score starts to improve.
It's not a terrible hardship given our current situation but given the volatility in the job market it certainly makes us uncomfortable.
Most states (and all federally backed mortgages) have temporarily suspended evictions so the short answer is that people in financial distress dropped that expense, which is usually the single largest on most people's budgets (for low-income people this can often be 50% or more of take-home depending on the city - yes, the rule of thumb is that it shouldn't be higher than 25% but you simply can't find affordable housing in a lot of areas).
However that one eventually is going to come due because the federal mortgage eviction moratorium doesn't prevent you from going in default on your mortgage, it only prevents evictions. The 3-month timer is still running and as soon as the moratorium on evictions is lifted, they can kick you out immediately. So as soon as that lets up in a month or two there's going to be a massive surge in evictions in states that do not go out of their way to keep evictions suspended.
(and in fact this is probably a snowballing problem, the longer this crisis goes unchecked and the worse the economic pain gets, the more people that will be in default and the bigger the difficulty of getting "back to normal". Furthermore at some point that shit starts rolling back uphill economically, banks turned your mortgage into financial products and you not paying is cutting off the income of someone else, and in fact there is an eventual risk of a 2008-style crisis occurring on top of all the current problems if we get into a situation where people are defaulting en-masse.)
"Lies. Damned Lies. And statistics"
> The phrase derives from the full sentence, "There are three kinds of lies: lies, damned lies, and statistics.";
> it was popularized in the United States by Mark Twain and others, who mistakenly attributed it to the British prime
> minister Benjamin Disraeli. The phrase is not found in any of Disraeli's works and the earliest known appearances were
> years after his death. The phrase was attributed to an anonymous writer in mid-1891 and later that year to Sir
> Charles Dilke, but several others have been listed as originators of the quote, including frequent erroneous
> attribution to Twain himself.
Sixty-eight percent of adults 70 and older are mortgage-free, while 15.9% of Millennials are free and clear of mortgage payments.
I'm in my mid-30s and I hardly have any friends that own houses and if they do they're tech workers with decades left on their loans.
looking merely at owned homes is ignoring everybody that rents. Renters falling behind on their rent are equally likely to be evicted as soon as the moratoriums are listed.
(and that in fact goes to my point about "your rent/mortgage is someone else's asset", a renter who's not making mortgage payments is probably still putting someone else's mortgage in the red and causing havoc in the rest of the financial system. I don't personally shed too much of a tier for the personal finances of highly overleveraged landlords doing the BRRRR type bullshit, it's been screwing up pricing for renters for a decade now, but it's a problem for the rest of the financial system too.)
BRRRR: https://investfourmore.com/brrrr-method/
Also, as another poster mentioned, the demographics of home ownership tilt very differently. Lots of boomers own their homes, in many cases free and clear. The numbers for people in their 30s (let alone 20s) are pretty low these days, so your statistic basically ignores everyone under 50.
(And in fact even if we got younger people into homes, the same wealth transfer that boomers enjoyed probably cannot be replicated - it was artificially created by lowering interest rates from the highs of 19% in the 70s/80s down to basically 0% now, allowing people to finance much larger amounts of money and causing the underlying asset values to soar. Nor would it be desirable to do so.)
And in general I disagree with your comment further down in the thread about "you can say anything with statistics". The obvious thrust of that argument is: gee, I guess we better just not use statistics and argue about feelings instead. That's so much better.
It's pretty much an argument made by people whose positions can't be justified by actual data - they don't reconsider their positions, they just want to stop looking at the data.
So before you can have any faith in stats, you have to know the source and how the research was funded and by whom (this is before we even begin to talk about methodology flaws). If you do not know that then you cannot trust the stats at all. They are indeed worse than damned lies.
Homeowners shouldn't rely on the moratorium. They should have contacted their lender to get on a 3-month forbearance plan which can be extended for another 3 months when it expires.
I'm not sure how many times lenders are going to permit forbearance extensions, but once people are able to get back to work and start making mortgage payments, they need to call their lender for a loan modification. This brings their account back to current.
As someone wanting a home in a high CoL area, I would love a 10-20% off rush from thousands of houses going to auction or sale but it wold be devastating locally. We simply are not equipped, as a nation, to address the fallout from this years events. Especially not with current (lack of) leadership and circling of wagons.
But I do take your point that banks don't necessarily want to immediately boot everybody out, foreclose, and crash the market at a time when potentially not a lot of people are buying.
Do bear in mind that the Fed has injected a shit-ton of cash into the market right now, and there actually would be more buyers than you think - it's just that they would be rental companies looking for more assets to snap up at firesale prices.
So yes bad but less bad with context and certainly something that is a leading indicator of something very very bad.
Our Govt sucks because we continue to let them get away with this. Where are all the Senators and Congress people ? Where are the Governors ? Some are trying but most of too busy politicizing it and still denying the reality that shit has hit the fan.
It is only going to get worse. I am about to layoff a couple of employees too since they just cannot work remote and their performance has gone down significantly. As a small business owner, I don't have the margins to keep paying them anymore as we are considered a "non essential" business and cannot go to office yet.
I got mine almost immediately. What is the difference between me and your brother, I don't understand.
The EDD (California) did process millions of applications (or so they claim), but more than a million are still outstanding.
The problem seems to me to be in their mission objective: they view every applicant first and foremost as a potential "wellfare queen" and attempt to prove that as a fact (17 years ago, in the aftermath of the Internet bubble burst, I lost my job as well, applied for unemployment insurance benefit and the phone interview I went though was as bizarre as unpleasant -- I didn't get to the phone interview this time 'round).
I wished they would rather operate like the IRS: after preliminary, automated checks using tax records (was the person employed by employer as claimed, is that person now employed?) hand out the money and perform selective, random in-depth audits asynchronously.
this doesn't apply to 'stimulus check' in question. They sent it to everyone immediately based on tax returns.
exactly. CA state unemployment system doesn't have any of these issues because they always vote blue and fund their govt systems.
The letter stated that she needed to provide proof of her social security number.
She has tried to do that for four months now. She has called them, written them snail mail letters along with proof that they have the wrong social security number, and numerous faxes. They keep telling her that the ID fraud department will eventually reach out to her. It has not happened yet after all this time. We have even reached out to the California Governor's office for help. Nothing has worked.
If she did not currently live with me and have me financially support her through all of this, she would be broke and possibly homeless.
The president should be making distributing this aid, and fixing the unemployment benefits mess his priority for these people. Instead he's doing a photo op with cans of beans in the Oval Office, and another photo op down the street with a bible he holds like an alien artifact
Unemployment is almost all within the remit of the individual states. The government approved additional payments to each state, but the state government is responsible for dispersing and managing the unemployment system.
State: Depends on which state you are talking about
Local: Depends on the municipality
Let's also not forget the international leadership, particularly WHO, for its spectacular early failures such as ignoring warnings from Taiwan (https://www.reuters.com/article/us-health-coronavirus-taiwan...) and avoiding any action or statement that would offend China such as calling for a travel ban in January (“In fact, we oppose it,” https://www.technologyreview.com/2020/01/30/275959/the-china...)
Regardless, the U.S. federal leadership's incompetence has made everyone's else's jobs exponentially harder. But I don't think it's fair to blame all states and municipalities for failing.
- It's almost exactly the same as new claims last week (1.31 million)
- Total continuing claims not including this week are at 17.4M (dropping weekly, somehow)
It's worth noting that the PPP plan for employers was extended to a 24-week period rather than the initial 8 weeks, which to me has some interesting implications and loopholes. States re-locking down due to surges in cases will probably have a bad impact on employment as well. The supplemental unemployment payments have not yet been renewed and will end at the end of July.
While it is true that a slim majority of Americans have some stock, the vast majority of that is in retirement plans, not brokerage accounts.
Most trading volume is algorithmic, so it only takes a small number of real humans doing unusual trading activity for markets to move.
I've phrased it like this because I don't have expertise.
If most capital is in rarely-traded funds (I think 90-95% are passive?) then by definition those last 10%-5% active investors are going to set the market, at least in the general day to day.
I think people have rushed into stocks because they think that that's the safe haven for their money against inflation as they think the Fed is "printing money" and causing inflation, but the data is showing deflation. If deflation continues, bonds would be the safer place to be.
In particular, virtually every single food item at the grocery store is more expensive than it was in March. Am I the only one who has experienced this? It seems like basic staples (milk, eggs, flour) are substantially more expensive than a few months ago.
But your other point is probably more correct - supply/demand swings in the short term affect the prices you see more than deflation/inflation.
Technically a gallon of milk should go up in price like 6-10 cents a year, which you might not notice.
Regular costs $3.5/gal
That's technically correct, though of course does not feel like it for many people. To the average consumer, a "phone that can play today's games" is the same measurement today as it is next year, and if prices don't change, they might not consider that "quality increase".
Most employed Americans are still paying into retirement and mostly dumping cash into index funds on the bet that in 20-40 years the market will be up. Private investors and hedge funds are watching the Fed buy up trillions in bad bets, might as well make more bets with a feeling of lower risk. Even Hertz is gaming the system at a time when it's still very uncertain how the US will cope with the pandemic long term.
However, we are seeing a drop in inflation not quite to deflation but down like 3/4 from above 2% to .65% for recent months: https://inflationdata.com/Inflation/Inflation_Rate/CurrentIn...
This my be due to oil price drops in the past quarter with prices going negative at one point. But generally speaking we are not seeing excess inflation, quite the opposite. I think we are going to see a massive drop off in Q3, especially based on recent weak Q2 earnings reports and likelihood of the US not coping well at all.
You realize that UBI requires monies, right?
The US Federal government, and most states, are bankrupt. There is no money for this years bills. There was no money for last years bills, and we keep borrowing at exorbitant interest rates.
Our deficit (shortfall for this year) is -more than- 2.7 trillion dollars.
Our debt (shortfall for previous years) is -more than- 4 trillion dollars.
We can't pay unemployment claims because there's no money...
Where the hell is anyone getting monies for UBI?!?!?!
Like the $1.5trillion tax cut that had "no major impact on businesses' capital investment"?
https://www.nbcnews.com/business/economy/1-5-trillion-tax-cu...
So in fact, it's a $150B tax cut annually. For a $3.7T budget that's costing about 4%.
In times of crisis like this you just print it and claw it back through higher tax rates .
The majority of the M0 money supply, that bit of currency we use to get things done in our economy, is created by fiat at any of the ~4500 commercial banks (in the USA). Every time they give out a loan they create the money out of thin air as debt on their balance sheets. They are only required to have a tiny fraction of the money they 'loan'/create (fractional reserve).
If instead of letting only these banks create money, if the new M0 money supply was distributed to ~300 million human people instead of ~4500 corporate people, there'd be plenty for basic income. It'd be universal basic income then instead of commercial bank basic income. And banks could just be banks and get by on their actual services instead of being money machines.
... and that's not even acknowledging what the NY Fed have begun doing since October of last year, 10s to 100s of billions a week swapped for worthless items from corporations who can't pay their bills in Reverse Repo operations: a shallow attempt to pretend it isn't just giving money away (https://apps.newyorkfed.org/en/markets/autorates/temp).
https://www.treasury.gov/resource-center/data-chart-center/i...
We can deal with a few trillion to establish basic income replacements for general benefits, universal healthcare, affordable college/education, and other programs to better our citizens vs the rich and stock market.
"No money" is not a meaningful concept for the federal government. It has two options for what to do with the money supply: increase it, or decrease it. Leaving the money supply unchanged is just a degenerate form of these and generally bad economic policy (deflationary).
Currently, there is a massive drop-off in the velicity of money, which, if not countered, would have a deflationary effect. Increasing the money supply has an inflationary effect to counter this. In fact, the federal reserve has been increasing the money supply to maintain target inflation. Currently they do so by giving money to banks (and recently, by buying bonds directly). Why shouldn't they run their monetary policy by giving money to individuals instead.
They release a jobs report on the first friday of each month with asjustements as data from prior months made it in. They survey businesses and process a lot of other data to deliver these reports and have been generally apolitical and data focused though the current administration has tried to influence numbers to their advantage, effectively undermining a critical component of our democracy.
The latest jobs report, which has a graph of the year's data, is here: https://www.dol.gov/ui/data.pdf
The numbers here are basically on an exponential decay curve from ~6M new claims in the last week of March. (FWIW, the pre-2020 record for new weekly claims, seasonally adjusted, was ~700k in 1982--we broke that in March and haven't stopped breaking it since).
We get the government we voted for, so I guess that's the one we deserve.
The ultimate problem is that "the rest of the state" (for virtually all states) is empty, hardly anybody lives there, and letting a minority override the will of everybody else is tyranny of the minority.
Taken to the extreme, this is ultimately what killed South Africa and Rhodesia and other countries - a relatively small minority imposing their will on the majority, things getting worse and worse with no recourse for the people whose lives were actually affected until things boiled over.
At its core, this is ultimately an argument for anti-democratic principles.
Having city dwellers decide what happens in rural areas is the tyranny of imperialism.
You also are performing a convenient geographic sidestep where suddenly "where you live" isn't the country or even the state but is really only concerned with the local. So the rest of the people who live in the nation are diminished.
Localism has led to lots of problems in American history, now we can add a shitshow of a Coronavirus response on top of the others.
The party of localism tends to be gung-ho about that huge federal military operation... yet refuses a necessarily-similar intervention in a pandemic.
But you are literally advocating for subjugation without representation. The opposite of localism you describe is imperialism/colonialism.
Your argument is equally valid in reverse -- there's no reason why rural dwellers should decide what happens in cities. Why should your vote count for more because I have more neighbors than you do?
The idea is not "the rules should be set up so people like me get a bigger voice". It's _one person, one vote._
You don't get an extra vote because you're "unique". What?
It strikes me that you basically want the voting system to be be biased to your advantage against a group of people you probably don't like very much.
If this is true, it speaks extremely poorly of your sense of moral fairness.
The difference is you are arguing that rural citizens should get no say whatsoever. I care about everyone instead of only those living in a small geographic circle and understand that the needs of those living outside of that circle are unique from city dwellers themselves.
your experience of the american political system is vastly different from mine. You have a whole house in congress devoted to making sure low-population states get disproportionate representation, the other congressional house and the state legislatures have boundary lines that are gerrymandered to disproportionately benefit and empower you, a rural farming state has the first say in primaries and an incredible amount of pandering from legislators, the electoral college gives you disproportionate power over selecting the president in the general, you get incredibly disproportionate amounts of federal spending (military bases, road funding, etc) - far more than they contribute, I can go on.
Hell, in some cases the states themselves have been explicitly drawn to increase the amount of rural power - the only reason the Dakotas aren't a single state is so they'd get extra senators and representatives.
Again, you are coming off as a member of a rural minority who is crying that they don't have total and utter political power over the urban majority. You already have a hugely disproportionate amount of power, influence, and funding in the American system.
A vote in Wyoming is already 3.2x more potent than a vote in California based on electoral weighting, and the same is effectively true for most other areas of the government that involve voting in any form. How much higher, exactly, do you think that should be?
And having "similar needs/wants" doesn't have a logical connection to justifying taking away their voting voices.
That's without skewing the strength of the vote, even!
So, no, I'm far from convinced that we have to protect the poor rural folks from their fellow citizens.
And if these people don't get extra votes, it's "the tyranny of imperialism"?
Let's pick a state - Kansas, nice and rectangle. Let's say it was empty, and 10 farmers moved in and divided it 10 ways. They are happy to themselves on their huge plots of land, doing their own thing.
One farmer needs extra cash, so sells off a dozen acres. That dozen acres puts in a neighborhood of 20 houses. Now that 20 houses controls the entire state, effectively. They decide people shouldn't be able to own so much land, and owning more than 10 acres is illegal.
Sure it's contrived, but you start to notice how it's not as simple as 'majority rules is best.'
Why should that single farmer be allowed to control the entire state over the rest of the 1000 people?
Cut the urban areas into their own states (eg take the metro NYC or Chicago area and make them their own states) and then merge a lot of the "empty land" in between to try and equalize the population somewhat. End up with somewhere in the neighborhood of 15 urban states and 15 rural states.
I would slice it into something like:
* Appalachia Region
* Gulf Region
* Great Lakes Region
* Heartland region
* Rockies Region
* Cascadia Region
* Desert Region (Southwest US - need a better name but I'm coming up with a blank.)
* Maybe a Northern Shield region? Could just be part of the rockies region.
Those areas all have common environmental concerns and life experiences, and would bring a sufficient number of residents to be worth bothering over. Then you have the metro areas as their own states, enclaves within the larger regions. If metro areas grow out you would probably would have to have some mechanism to vote to transfer counties/districts between states.
Never going to happen of course, the number of political barriers is insane. And Republicans would never ratify any such plan that rearranged states as any sensible arrangement would unwind the disproportionate power they wield based on the current arrangement.
The only mechanism that could conceivably be achieved is splitting blue states up, and it's not really a good one since populations are so concentrated - imagine trying to split New York City into like 5 independent states, it would just be completely impossible to administer in practice.
In reality we will just keep bumbling along with our current system that immensely, disproportionately advantages the rural states and rural populations. Unless the country goes into an actual civil war, of course, which is not as unthinkable as it was 4 years ago.
There is often something lost in this argument, which I think is a strength of the system, not a weakness. That is: the US Senate, which was the compromise, is a rejection of utilitarianism as the pinnacle of governing.
You don’t want tyranny of the minority, and I don’t want tyranny of the majority, so let’s have a system of checks and balances that ensures (within limits) that we address both groups.
I mean... what exactly are you complaining about? The straw ban?
Moreover, why does people's location on a 2d grid matter at all for grouping people under representatives? Why not the first letter of their surname? Their age? Maybe the altitude of their home? Seems just as arbitrary.
This is a rather short-sighted position. There's a reason the tyranny of the majority was avoided, and it's because the majority will always vote for their own benefit. If they do so, it almost always hurts the 49%.
You have to balance the needs of a state as if it were a living organism. You can't simply optimize everything for the heart when the lungs have needs as well, or the body dies.
I keep hearing people say this, and it baffles me. If the majority of people feel a certain way, who's to say it's not the right way? If you start picking this apart it really just comes down to "yeah but the majority can sometimes be wrong", which, I have news for you, applies to the minority as well.
At the end of the day, representative democracy exists instead of "pure" democracy because there's issues scaling the operation of government into something where everybody votes on everything. So we decide to have 1 representative for every N people. To do this, we need to break people into cohorts somehow, such that each cohort is roughly the same size. There's lots and lots of ways to do this, but we seemed to have settled on geographic locations, and sizing so that they (mostly) have similar numbers of people.
But since populations can be extremely concentrated in some areas, cohorting people by geographic location becomes less and less useful. It seems to me in an ideal world, everyone would be randomly assigned to a cohort via some sort of consistent hash, and they would be evenly distributed. Mind explaining to me why this would be inferior to cohorting on geographic location?
But then those same rural politicians will then make the opposite argument against other minority populations (such as people whom are LGBT or among race lines) and that we shouldn't let a small minority control our state or that who cares what they think. They switch rapidly from 'tyranny of the majority is bad' to 'tyranny of the minority is bad'.
I caution people not to let politicians become their mental picture of the constituency.
Nobody is right or wrong, they just all have different priorities. Regardless of those priorities, the resources must be allocated to ensure the entire ecosystem can continue to survive. The only solutions to accomplish that are going to be compromises. But unfortunately, the groups in the population centers have managed for an incredibly long time to avoid compromise. So, now California finds itself in an unenviable position of battling drought and fire nonstop.
That is tyranny of the majority.
Because, as parent said, the majority will usually benefit themselves even if it means harming the minority. If I belonged to some 51% group, why would I not vote to double my wealth, even if it meant stealing from the other 49%? And before you say 'I would never vote for that', it's never worded that way, but more subtle policies that would achieve the same thing.
Which then goes back to the person you responded to: That the majority and the minority can both make wrong policy decisions.
No one ever suggests it because it's obviously ridiculous.
LOOK at the results of America's screwed up voting system! A deranged madman in power, the economy in collapse with no rescue even planned, and a virus growing exponentially with no plan to fight it.
We have a state with 100,000 square miles and only 600,000 residents. We have another state that has a little more space but has 40 million residents. Their circumstances are so vastly different that the policies of one would be very unlikely to work well for the other.
> LOOK at the results of America's screwed up voting system! A deranged madman in power, the economy in collapse with no rescue even planned, and a virus growing exponentially with no plan to fight it.
America uses first past the post. It isn't great, there are many better systems later developed. If we were to improve our voting and party system it would benefit the entire country massively.
In fact, we see that scenario happening right now here in Texas where cities are not allowed govern. See also: Georgia.
You could just as easily say "old people are trying to pass laws that make lives miserable for young people, we really ought to have fewer representatives for old people", and it would make exactly as much sense as saying the same thing about a geographic location. There are a million different ways you could slice people up into representatives, but we end up settling on geographic location because... reasons, I guess.
Also, the majority didn't vote for the Democrats either. Of those who voted, 48% voted D, 46% voted R, 3% voted Johnson, 1% voted Stein, misc voted to others.
So would a D win also have been somehow not deserved because they didn't get a majority?
And this is only of those who voted, which is only 55% of eligible voters. So D (and R) both got ~25% of the eligible vote. Some of this is because many people were disgusted by both parties. Trump and Hillary were the two worst Presidential candidates in history, as measured by unfavorability ratings [1]. Had the Dems run anyone with a somewhat normal rating, they would have likely trounced Trump.
We set up some rules that were not entirely unreasonable, and enough people did vote for the outcome that we got that the US does indeed deserve this. And both parties ran record level disliked candidates, so what did you expect would happen?
[1] "Among U.S. adults, Clinton now has a 56% unfavorability rating, while Trump had 63%.
And with registered voters, the two are basically tied: Clinton has 59% unfavorability and Trump has 60%."
https://www.usatoday.com/story/news/politics/onpolitics/2016...
Underrated comment. We elected a joke president with a track record of failures, reneging on promises and bad leadership. Those attributes combined with a pandemic is showing us what we deserve for our choices.
Consider how much better the top subthread https://news.ycombinator.com/item?id=23859830 is with https://news.ycombinator.com/item?id=23860042 as the top comment instead of this one. The difference is striking.
https://news.ycombinator.com/newsguidelines.html
(We detached this subthread from https://news.ycombinator.com/item?id=23859830)