Nearly 8M Americans have fallen into poverty since summer
washingtonpost.com
washingtonpost.com
> You know me. I'm in your friendship circle, hidden in plain sight. My clothes are still impeccable, bought in the good years when I was still making money. To look at me, you would not know that my electricity was cut off last week for non-payment or that I meet the eligibility requirements for food stamps. But if you paid attention, you would see the sadness in my eyes, hear that hint of fear in my otherwise self-assured voice.
I think a lot of people don't understand how poverty really looks because we're socially motivated to project wealth and status wherever we can.
Apart from my car, if I sell all my belongings, I might get one month worth of rent. Hardly seems worth it, unless there is a way to use that money to earn more money.
Financing a car is a double whammy because you pay interest and have a deprecating asset. At the low end cars really don't deprecate much. The act of not having a car payment is a great first step to building wealth.
> At the low end cars really don't deprecate much
I tried the whole Tropical MBA buy-an-old-car thing. Went with a 10-year-old Camry that KBB'd around $5k, had it inspected before I purchased it, and everything seemed fine. 6 months in, I ran into an issue that required the entire electrical system to be replaced which pretty much totaled the car. I wound up getting about 15% of what I paid for the car back out of it after 6 months of ownership.
Bottom line is that the old car napkin math works as long as the vehicle doesn't run into serious issues, because the moment it does, it really doesn't make much sense unless you're willing and able to do serious work on your own car.
Yes, that would not anymore fit into the description of financing part of a 10k car.
Long ago, I volunteered once at a thrift store. IIRC, they actually bailed up a significant fraction of their clothing donations and sent them Africa.
Not caring that we might look poor has been the biggest factor enabling me and my wife to build a good, stable life for ourselves while peers who out-earn us perpetually struggle on the brink of ruin.
Not sure what you mean by this. There's nothing to escape from. The word we have for superficial consumerist social strivers who spend conspicuously to soothe their ego and signal their status is "asshole". Don't be an asshole. It's not that hard.
Having used cars older than that as a daily driver, the cost of repairs/downtime outstrip the cost of replacing the vehicle more often than not. Not driving isn’t really an option in the US, and driving a clunker will raise some flags to coworkers/other parents in the parking lot.
The other cash poor option is to grab a lease with good incentives, it’s a terrible deal - but it’s the best if you need to conserve cash flow month to month ( particularly if you can’t afford fixing a breakdown )
Which is all to say, if your poor - driving a half broken down car would be a terrible investment.
I was questioning their characterization of the used vehicle market.
Which those more recent vehicles are the vehicles the other poster alluded to, that I did not find with a real basic search.
I would be moved by a real person's story, but this not only is pure fantasy, it even creates a stereotype that all poor people are timid and frail. And again, I know some people do become broken by poverty, so why not share their real story?
> What part resonates with you?
Her losing her job, not being able to be re-hired at a similar salary, spending her savings, and winding up in poverty despite doing everything 'right'. At 55, she has an uphill battle to get another job. Why hire her when someone with 15 YOE costs less and will work for more than 5 years? Employees are not that unique.
Ageism is also a large problem in tech, but we just don't talk about it much. How common is it to be on track to retire for 25+ years after aging out? What if someone forgot to change their 401(K) investment strategy and happen to be 'retired' (laid off due to age) during a market downturn? Does everyone know that's a thing you should do about 5 years before retirement?
There are too many 'gotchas' that can seriously alter retirement plans. I think it is cruel to treat people this way, and I can see it happening to myself. Even if I do everything 'right' (and I certainly have not). That is what I respond to - the warning that even if you play your hand well, you can still lose and have miserable twilight years.
I grew up quite poor and still have loved ones who are poor, often even more than I was. Poor in the sense of born poor, a life of labor into age 60 or 70 poor. I'm also aware that this isn't unique, lots of people out there are anywhere between very poor to obscenely indigent, so I and other poor or formerly poor people don't generally tend towards unabashed self pity. Because of that, this author's story just makes me roll my eyes. Here are some examples of what I mean:
> WHITE: You know, I have all the props and credentials. I have a Harvard MBA. I have a master's in international studies from Hopkins. I went to Oberlin undergraduate. You know, I worked at the World Bank.
> But if you paid attention, you would see the sadness in my eyes, hear that hint of fear in my otherwise self-assured voice.
> You invite me to the same expensive restaurants that the two of us have always enjoyed. But I order mineral water now with a twist of lemon instead of the $12 glass of chardonnay.
> There are no media stories about me. My slide out of the middle class is not sensational enough
I can empathize that the change is difficult, but I won't cry for her having to skip a chardonnay that's worth more than what many people spend on food (or earn) in a day. She's obviously a very intelligent and accomplished person and almost certainly has connections; I'd rather save my attention and empathy for the people who don't have a list of degrees and accomplishments. So when I see people do respond to this kind of story, I can't help but wonder if they have ever personally experienced poverty, let alone the lifelong and encompassing poverty (in the sense that everyone around you is poor and you have no connections somewhere higher up) that I saw so often growing up.
I’ve been in way worse situations and I don’t think I’ve ever been exceptionally poor.
Reading her account especially that Chardonnay instance made my eyes roll all the way back.
Employers could continue the status quo, but would have a portion going to obsolete/aged out individuals. The only alternative would be for them to outcompete the replacement income with a better job.
The continuing erosion of the middle class isn’t a good thing. Expect populist political rhetoric to continue growing.
Your average person doesn't fear flu-like sicknesses. It's an inconvenience, yes, but that's about it.
> long term side effects
Again... according to CDC/WHO the average person completely recovers in 2 weeks. Yes, there are cases where permanent lung scarring was observed, but AFAIK that's super rare and has to do with the type of pneumonia synergizing with covid, not covid itself. I'm sure you can dig up other cases where long term negative effects are observed... but it seems rare compared to the normal recovery scenario. Do you have a source showing that the average person should fear developing long term side effects?
This argument always seems completely untenable for me. It's highly improbable that the level of fear hits the sweet spot where without lockdowns it's not enough to prevent the spread, but enough to ruin the economy.
With that said, this is going to vary by region. There is absolutely a large percentage of people wanting and willing to go eat indoors at restaurants right now, I just don't think that number represents a majority.
Schrödinger's virus: We need lockdowns to save everyone but even if we didn't have lockdowns nobody would go anyway but we still need to lockdowns.
We are producing less stuff because of the pandemic, which means there is less to go around (however it gets allocated), and no amount of money will change that.
> We are producing less stuff because of the pandemic, which means there is less to go around (however it gets allocated), and no amount of money will change that.
A large fraction of that stuff is not strictly necessary for anyone's survival, especially in the short term. It's various degrees of "nice to have." Too see this, look at the kinds of rationing they did in WWII.
A successful COVID containment strategy would have identified the truly essential vs nice-to-have parts of the economy, and temporarily shut the latter parts down while supporting all affected workers in those sectors with payments sufficient to provide all needed access to essential goods and services for the duration (including housing). That wouldn't work as a permanent economic policy, but it would work as a temporary coordinated response to time-limited crisis.
Honestly, that sounds like hyperbole. You'll have to give examples, and not something like retail or restaurants. Honestly, with a little imagination and expertise (and most importantly the political will to deal with the problem), I think it doable to make the legal changes necessary to pause most business like that with little damage, just as long as the aid is there. For instance, make 2020 something like an intercalary year. IMHO, this stuff only seems impossible if you tie your hands and restrict yourself to a limited number of first-order interventions.
The situation we have now is something like an ER doctor who's too busy playing on his phone to save the life of someone who's been shot, and who then turns around and loudly blames "guns" for that unnecessary death.
You're right, but the implications of the GGP comment's phrasing imply they wouldn't have liked that solution.
IMHO, in some quarters, the weeping and gnashing of teeth about the costs mandatory social distancing (up to and including stay at home orders) directly flows from the rejection of government relief as a solution to anything. If you take that off the table, you're left with a false choice between pandemic destruction and economic destruction.
That's an unrealistic idea. You can't have unchecked community spread and "focus protection on the vulnerable," without literally imprisoning them in an isolation bubble for a year or more, which is far longer than the successful lockdowns have lasted. There are places in the world that have already opened up, virus free.
The rule with this pandemic seems to be: the more half-ass you are at controlling it, the more pain and expense you get.
> "economic" is a bit of a misnomer too. There is a greater cost to lockdowns than just economics. Mental and physical health also suffer. Those that can't get preventative care they need suffer. Depressed people and those with anxiety who turn to drugs, alcohol and suicide suffer.
If you really cared so much about people's "mental and physical health," why are you advocating a policy that wouldn't lessen it, but rather concentrate the damage and increase the burden to on the vulnerable?
I'm sure why. There's a lot of people who've committed themselves to false/wrong/wishful thinking ideas about COVID (the US, to its embarrassment, has a major political faction that's done this). Since those ideas are indefensible, people who point out the flaws are often downvoted.
And every place that qualifies for your description is an island on its own.
https://www.travellingtabby.com/scotland-coronavirus-tracker...
Scroll to “Hospital Admissions by Age Group” and select total.
So that would involve shielding everyone 45+ to protect hospital capacity in an unrestricted “shield the vulnerable” scenario.
And states do have options for funding relief at the state level. For example they could temporarily raise income taxes on the wealthy for the duration of the pandemic. Or issue pandemic bonds.
The state and local government had to act entirely because the federal government had no real plan. Someone is going to fill the decision making vacuum, but it is a problem when the people making the decisions don't have the financial power to make the right decision. The federal government is the only government in the US that had the power to pay people to stay home and experts were telling us that was the right decision 9 months ago.
State governments have the power to pay people to stay home. They might have to shift funding from other areas or raise taxes in order to do so.
But they don't have the money to do so. Plans like that require deficit spending, which the federal government can do but the states can't.
Your alternative suggestions are not serious ideas. Do you really think the states could find the money to pay people to stay home by levying taxes on basically those same payments?
So, basically, you think they should do things like finance their house with their credit card (general obligation bonds) instead of taking out a mortgage (federal deficit spending)? And what's your reason for that?
Honestly, this seems more like you're opposed to stay at home orders directly, but expressing that opposition indirectly by demanding arbitrary (unreasonable) policy restrictions to make them seems less desirable by making their implementation unnecessarily painful and difficult.
>State governments have the power to pay people to stay home. They might have to shift funding from other areas or raise taxes in order to do so.
Most states are run on a deficit and several states are already near bankruptcy. There simply isn't a capability at the state level to have the type of financial response that is possible at the federal level with its ability to print money.
This is not true. All the states except Vermont have a legal requirement of a balanced budget.
https://www.ncsl.org/research/fiscal-policy/state-balanced-b...
>State balanced budget requirements in practice refer to operating budgets and not to capital budgets. Operating budgets include annual expenditures--such items as salaries and wages, aid to local governments, health and welfare benefits, and other expenditures that are repeated from year to year. State capital expenditure, mainly for land, highways, and buildings, is largely financed by debt
It is much easier to balance the budget when you ignore all those capital expenses.
Also there are other complexities involved. You can look at what happened in Illinois a few years back as an example. They basically didn't have an official state budget for multiple years. That didn't stop them from racking up costs and debt. It contributed to a debt crisis that the state is still trying to claw its way out of.
The first isn't true at all. Most US States are forbidden to run deficits[0].
Which is why many states are already cutting services and laying off workers.
What's more, there are significant restrictions in most states on when and how they can raise money by issuing debt obligations (bonds).
With sales and income tax revenues plummeting in many states, that leaves them with few options other than cutting services, laying off workers and slashing public programs.
Without Federal assistance, things are going to get much worse before they get better.
[0] https://www.taxpolicycenter.org/briefing-book/what-are-state...
https://rockinst.org/issue-area/new-yorks-balance-of-payment...
Because Florida benefits immensely from supporting a state which has, if it were a country, the 6th highest GDP in the world.
The economy in Florida would be heavily affected if California left the union.
Your question is basically like asking "why do federations exist?"
"Some small businesses" is a washy phrase with no substance.
The Federal government tried to create PPP programs, but look at what happened. Multi-million dollar franchises pulled in huge chunks while small restaurants got nothing. It's the 2008 bank bailouts all over again. It's like PS5/nvidia graphics cards scalping for businesses.
The corruption flows through every system, and the blame can be focuses on businesses with the means and people and legal staff to take advantage of the situation at the expense of every possible competitor.
Also Trump removed the independent watchdog for the coronavirus funds.
https://www.politico.com/news/2020/04/07/trump-removes-indep...
Free money from the federal government wouldn't have improved that situation. If state governors want to shut down businesses then state governments should be issuing relief payments.
Unfortunately, for most people the truth is that they "like their representatives, it's all the rest that are corrupt"
Plus Washington is close enough to a 50/50 split right now that you can always just say it was the other party holding everything up.
States had a choice, leave everything open and deal with the loss of life, and still suffer as people would be going out less. OR shut down to help prevent deaths and hope the federal government would help (which it should have).
Instead it became a political battle to give corporate immunity, and nobody got anything after March.
The state and local governments that shutdown did the right thing - they put the health and safety of their populations first. The federal government failed them by defaulting on its obligations. It did this intentionally.
It's more complex than that. The UK is keeping things stable/frozen, but with nothing being produced, the value of their money is shifting.
You cannot keep paying people to do nothing. You have people in jobs where they are still employed, saving tons (because there's nothing to spend it on) and record buying of future e-waste (Going back to the 2000s, PS3 prices were back to normal two weeks before x-mas Christmas. PS5s are still $1000+ on eBay), and the income inequality is growing between those who happen to be in safe industries and those who weren't .. and it's arbitrary. Nothing has changed for the manager at a Wal-Mart, or a UPS driver or an engineer, but it has for the restaurant manager or someone who owns a small corner store in California.
The completely arbitrary and almost random lock-down decisions have crushed all small business, giving over their entire customer bases to large big box stores.
The people with their small businesses don't want handouts. They'll take it sure, but they want to work. Some have shifted and found new creative ways to make money. That's the nature of capitalism. You do what you have to, within the limits we've evolved over the past 100 years (no more child labor; pure capitalism without regulation is bad), to offer goods and services people want. But many are struggling.
In contrast, the earlier larger unemployment payments provided a perverse incentive to keep people from returning to jobs that had reopened. Lowering them a bit has helped those return to jobs that were there, but it's been devastating to those who have nothing to go back to.
We cannot just inject money. Social welfare has been a disaster in many respect. Only only need to watch modern documentary that break the bubble: "What Killed Michael Brown" and "Uncle Tom" to see how the perverse incentives from badly constructed government systems actually hurt a lot of low income communities and destroyed families.
There is a lot of talk about "A great reset," used in many countries to indicate a global agenda to fundamentally change economic models. Make no mistake, people at the top with influence are not going to give up or redistribute their wealth. Bezos, Gates and others at the top will hold on to their wealth. But reconstruction could destroy people under a certain income threshold if it's not done correctly.
People need merit and value, and the draconian COVID regulations have removed personal agency from the masses.
Small business owners aren't feeling some pressing desire to continue their craft during the pandemic, beyond that of anyone with a passion. What's really driving their desperation is needing to pay rent, as the banks continue operating as normal, demanding their periodic tribute, and threatening to confiscate businesses if they don't find some way to pay up.
You said "people with their small businesses don't want handouts". The problem is that they've internalized rent as some inherent fact of life, while viewing anything that could mitigate rent as a "government handout" - despite decades of government financial meddling being responsible for this jam!
The direct solution was/is to suspend all rent/mortgages denominated in USD, and let the pain accrue to those who are usually benefiting from vacuum-up economics. Instead, as always, disinvolved capital was given a pass (along with a huge bailout!) while the political machine went to work dividing the productive members of society to distract from their real enemy.
The response here in Washington State has resulted in permanent closure of more businesses than deaths with covid within the state.
Instead Republicans have held aid hostage in exchange for legislation allowing businesses to force employees to work in unsafe environments with no recourse[1]. Even so far as a measure that would allow the US attorney general to penalized employees up to $50k for having the audacity to sue businesses for creating unsafe environments.[2]
1. https://www.washingtonpost.com/opinions/2020/12/15/disturbin... 2. https://www.jacobinmag.com/2020/12/covid-liability-shield-la...
A reminder that Nancy Pelosi turned down not one but two $1 trillion+ stimulus offer from the White House before the election.
Trump makes $1.8 trillion economic relief offer, but deal with Pelosi remains elusive (Oct 09 2020)
https://www.washingtonpost.com/us-policy/2020/10/09/trump-ec...
Nancy Pelosi blasts the White House's $1.6 trillion stimulus plan, saying it's not even 'half a loaf' (Oct 01 2020)
https://www.businessinsider.com/nancy-pelosi-blasts-white-ho...
But if you look at how that money is allocated, it won't be very good for anyone except those who are milking this crisis for all they can.
The bill needs to be much bigger to have any considerable impact.
Remember -- the economy only works if people are spending money, and people are only spending money when they have money in their pockets. Trickle-up economics is real and it works.
Republicans were willing to negotiate on a smaller package.
It was held up by the speaker because it made Trump look bad.
If you want to know why COVID relief is tied up in Congress, one key reason is that Republicans are demanding legal immunity for corporations so they can expose their workers to COVID without repercussions.
Dems don’t want you to die for a check. That’s what we’re fighting over.
Here you go[0]. Although it says the opposite of what GP claimed.
[0] https://www.axios.com/trump-coronavirus-stimulus-negotiation...
That's a good reason to refuse to pass the bill.
The "aid" is a red herring if you are setting up those same people for dangerous situations with zero accountability from the people who are forcing them to put themselves in hazard's way.
It is myopic to think that a smaller stimulus bill (that would barely cover 1 month's expenses for the average American -- recall that it's been 8 months since the first stimulus) would be proposed for anything except to stave off the fervor of mass civil unrest for a short while longer.
Absent a written standard from the government body in charge of these things, it's a free-for-all of liability. So I open my restaurant following local standards and a customer gets COVID and sues me because I used disinfectant X when I should have used Y, or the staff was wearing mask A instead of mask B, or whatever.
I don't think its unreasonable whatsoever to - again, absent the proper rules - ask for protection in this case. Folks like to characterize this as "protecting big corporations" but if you read the proposal it protects school, universities, hospitals, and so forth as well.
It's very strange that we couldn't move money around and hadn't been saving money "for a rainy day" exactly like this one.
In places where "social distancing" minimums have been impossible, the places have closed.
I'm in one of the most strict places in the entire United States, but I can still go to most every store I want, including hair salons. I'm only barred from places where there's a LOT of breathing (gym, church with singing), tight confines where social distancing can't be done (bars, restaurants) or staying in a singular location for a long time (church, clubs, sporting events).
Destruction of the service industries? Educational handicaps on multiple generations of students?
My point is that it's cheap to wear a mask and socially distance yourself while otherwise carrying on with life. It's extremely expensive on society to force everyone to stay home as much as possible and avoid certain businesses. It's expensive because it pushes the country more rapidly into debt, it pushes millions into poverty, it drives up suicide rates, and dozens more second and third order effects we won't find out about until the coming years.
That's why online school has been such a common thing; but, the United States isn't very good at it, and we haven't built out the appropriate social support structures and patterns (and have gone against those patterns in many cases), so it hasn't been especially viable.
Remote learning was considered better than cancelling school altogether; but, then we ran into the problem of parents and children working and going to school in the same place and that came with its own burdens.
But did we give enough thought to the third possibility? Just sending them to school normally with masks, periodically testing everyone, and contact tracing anyone who tests positive? Young people are surprisingly resilient to the disease, really just the teachers need to take extra precautions.
Assuming there are 200,000,000 people in the US over the age of 18, and assuming that each of them gets $1000/month for 12 months, we have 200,000,000 * 1000 * 12 = 2.4 Trillion, which is similar to what we actually spent. The problem is, instead of uniformly distributing that 2.4 trillion among our citizens, we added complexity (and waste due to overhead) by giving money to special interests (airlines for example) and big businesses in various ways.
I perceive the "I'm assuming you don't want ..." part as incredibly sarcastic and belittling, as though you're putting yourself on a pedestal of knowledge and belittling your fellows having a conversation.
I know I've not been the most polite in many of these conversations; and I need to work on that, too; but, perhaps you haven't noticed it and I wanted to bring it to your attention so you don't snap at people and in conversations that actually matter.
The majority of whom were already older than the average life expectancy. We'll see excess deaths this year, but are going to see a shortfall for the next few after that.
In an effort to stave off that danger, local governments enacted lockdowns with the intent of reducing the spread of the virus.
The virus, in the United States, has an established death rate of around 1.5% and a hospitalization rate higher than that.
It also experiences exponential growth.
Our hospitals didn't have the capacity to handle all the _potential_ load; and, once they're approaching that capacity, it's already too late and they'll blow past it. That's the danger of exponential growth.
Let's imagine doublings:
1, 2, 4, 8, 16, 32, 64, 128.
If total capacity is 100, the moment that capacity is less than 20% used up, we're 2-3 timesteps away from using over 100%. It is a very dangerous gamble, and controversial decisions are made or not made and the worst part is that, when you do the safe thing, you have no way of being certain or explaining that the bad thing would have or could have happened, because "it's only 20%" and that looks small.
Edit: also, the military, FEMA, and non-profits built temporary hospitals in spring, but they weren't needed.
Federally, there was no strategy because federal powers were devoted to promoting the pandemic (e.g., via the Defense Production Act invocation to shield the meat packing industry from state safety efforts) rather than fighting it.
OTOH, hospitals also require skilled staff, which takes longer to build.
Absolutely. Steve the UberEats delivery driver can be moved into the ICU, putting folks on ventilators and providing critical care in a week or so, right?
And Gustavo, the busboy can be out providing EMT services in just a few days, right?
A doctor requires 8+ years of post-secondary education, in addition to several years of on-the-job training.
An RN requires at least 6+ years of post-secondary education, plus several years of on-the-job training. LPNs even longer.
So, yes. In the short term (~6-18 months), staff are most certainly fairly fixed resources.
As for hospital beds, those are limited to the square footage available for them. Sure, temporary hospital wards can be constructed and put in place fairly quickly, but unless Steve and Gustavo are staffing them, you still have a big problem.
I don't give up. Make a temporary hospital with ip web cams pointed at all the vitals. Build a quick and dirty dashboard that lets doctors/nurses monitor dozens of patients at once instead of having to physically walk around everywhere. If engineers can get more done with less using automation, medical professionals can do it too.
You're putting words in my mouth and then arguing against them. I think that's called a 'strawman argument'.
They can, however, collectively produce 9 babies, 9 months after the start date.
Normal hospitals are already staffed at pretty close to the maximum rate of less qualified to more expert staff for their caseload, and the easy caseload that requires less expert share of time is pushed out of hospitals entirely by the crisis. Surging additional minimally trained staff doesn't help anything.
I believe ICU nursing stations already use such dashboards routinely.
If they didn't, developing and testing new software to a level where it was reliable enough for such use without being checked up around, and training staff and adapting processes for it, would not be a quick process and, perhaps more importantly, would take staff time of clinical staff to participate in consultation and validation instead of clinical duties while it progressed.
Desperate times call for desperate measures. The solution doesn't have to be perfect. It can be quick and dirty now, and perfected later. It might be worth it, given the current solution is pushing hundreds of millions into poverty among other disastrous consequences.
Quick and dirty IT solutions often reduce efficiency compared to not having them, and that's more likely the less involvement and validation with the target workers you have in the course of building it.
Plus, again, this is something hospitals already have and use and which already is factored into staffing requirements, and you are responding only to the theoretical problem that would exist if it actually was a new innovation being developed.
About 10% of all the people who died in the US this year will have died from covid-19. Why are those 10% of deaths so much more terrible, so unimaginably horrible, that we're focusing exclusively on those, and completely ignoring the remaining 90% of deaths?
The broader point is that it's not clear that lockdowns are beneficial or necessary. They have real costs. Nobody is talking about how we weigh those costs and benefits. And despite the lockdowns, California still has a swamped medical system.
To move the conversation forward: people will never give up their sacred cows. The lockdowns were never about COVID, they're about control and rewarding political allies. Texas tried to ban abortion. California tried to ban religion. And nobody cares if the lockdowns work or not.
(Our government failed on both the lockdowns, which were scattered, too late in many places, and too poorly enforced in most places, and stimulus, but then our government, at many levels, has not been sane.)
Here's just one example:
"According to the National Federation of Independent Business (NFIB), about 85% of all the approved Paycheck Protection Program (PPP) loans were for less than $150,000...The bipartisan bill holds the intention of automatically forgiving loans of less than $150,000." [1]
85% of so called 'paycheck protection' loans didn't/won't actually have to go to paying staff after all. Up to $22,000 per employee directly in the owner's pocket regardless of how the business was doing at all.
[1]https://www.solo401k.com/blog/news-ppp-forgiveness-for-loans...
I don't know where you came up with your made up number of $22,000, but this isn't some big conspiracy, what is forgivable is directly viewable in the SBA's PPP Loan Forgiveness Application: https://www.sba.gov/sites/default/files/2020-11/PPP%20Loan%2...
As for forgiveness, the forgiveness is part of the latest, yet to be passed, bill. My point is that PPP loans were sold as something, and are now being revised to be not that all, for the benefit of employers and not employees.
>While until the SBA issues revisions to that IFR the final answer can’t be known for sure, one likely option is that the SBA limits owner-employees to 2.5/12 of their 2019 employee cash compensation and employer retirement and health care contributions made on their behalf, with a likely cap at $20,833 across all businesses.
https://www.currentfederaltaxdevelopments.com/blog/2020/6/16...
The OP didn't allege fraud. He stated two facts... relief loans were not required to cover wages. Loans <$150k can be forgiven.
I don't think it's unreasonable to require some % of the loans to cover wages of employee's whose hours were cut or were furloughed completely.
That said, a better option would have been direct payments to employees from the government. The $1200 check model but on a larger scale (ie, $1200/month or similar).
In May and June, many of the people hot to open things back up were partly motivated by unemployment, they didn't want states making the payments.
The position of the capitalist class, built on successful class warfare first against the pre-capitalist aristocracy and then against the working classes within capitalism, proves this to be false.
As, for that matter, does the (arguably modest, but still very real) progress of the working class from the height of the system first described as “capitalism” in the late 19th and early 20th centuries through its replacement by the modern mixed economy from the mid-20th century to today as a result of class warfare by the working classes against the entrenched capitalist class.
Though “class warfare is pointless” is always what those defending class warfare by the capitalist class say when the working classes fight back.
Name me a socialist/communist gov that did any better. Each implementation grew the class divides even more. So far China, I would say, is the most economically viable model due to their opening to international market practice. However, the party still controls it and divvies out the work to a select few. Their social credit system helps them determine who is more worthy by putting people in different categories... oh wait that's just a class system with extra steps.
It's not a capitalist fault. It's a human fault. We've done it for not hundreds of years, but thousands upon thousands. Long before Adam's or Marx parents were a twinkle in anyone's nethers. Finding a scapegoat for problems you dont quite understand and refuse to research beyond a 10min youtube cartoon does not constitute as good logic.
I did. The “bourgeois socialism”, as Marx described it, of the reforms from the capitalism that Marx described to the modern mixed economy that has replaced it pretty much everywhere in the developed world. (Now, admittedly, Marx saw bourgeois socialism as ultimately doomed to reinforce or regress into capitalism, but, while there is always pressure from capitalists back toward classic capitalism, the doom he saw for it isn't clearly inevitable in practice.)
Maybe you are confused because rather than “bourgeois socialism” people tend to still describe these regimes as simply “capitalist”, despite the extensive role of public institutions limiting private property rights and diverting the returns from private gains into providing public goods.
America has done everything in their power to destroy democratic populist movements. If you do your research you'll find that anytime a South or Central American country attempted democratic socialist movements they were destroyed by the CIA. This pattern has been repeated throughout the world.
So, yeh, it is rare to find a successful socialist example because the largest capitalist economy destroys emerging socialist movements.
That's what we're calling socialism nowadays (e.g. pretty much anything that's not laissez faire capitalism). That mushiness is what leads some people to think they can condemn social democracy with the example of Soviet central planning.
It is (and even the more moderate forms found in other parts of the developed West including the US are) also what Karl Marx called “socialism”, though of a subtype (“bourgeois socialism”) of which he explicitly disapproved as doomed to reinforce and revert to, rather than defeat, the dominant system of his day which he labelled “capitalism”.
Yes, Americans call the Scandinavians socialists, the same way dry rub BBQ pit masters call BBQ sauces the devil's abomination to food. It's either anachronistic hyperbole or just plain hyperbolic. Steps toward socialism sure, but we're not talking about comrade level stuff.
At a minimum, it should be tied to maintenance of payroll, since that's the entire theory of the Paycheck Protection Program.
Alternatively, it should just not have existed, and direct individual aid should have been increased instead.
> We don't want to set up a scenario where a bunch of small businesses fail the instant the PPP ends because they haven't been paying the bills.
The fungibility of money means that earmarked funds for payroll frees up any other funds for other uses. It might make sense to earmark less than 100% for paychecks, or to have a separate relief mechanism, to account for ongoing fixed costs. If business is reduced so that revenue is not available for marginal costs, than those marginal costs should also not exist.
Call me cynical, but people working in the service industry were the safest ones to let fail without causing domino effect - they are already poor so they don't have mortgages to default onto - they can't afford even in good times - and that avoids a major risk of repeating 2008.
This is the insanely reductive view of government spending that allows the Republican party to float austerity measures in the worst economic times since the Depression.
Taxes are not the only place that government money comes from. How would that even make sense? What do you think the Federal Reserve even does? Why do you think we have a national debt?
The government is absolutely able to create money out of essentially thin air when called for -- the question is whether we need to wring our hands about increasing the national debt of the largest economy on earth while people are starving in the streets.
Or, it increases risk of default when everyone's savings will be wiped out - except most of the money the rich have are again, in stocks so these won't be impacted nearly as much...
Whatever way it goes, these are not free money. Call me a conservative but stuff just doesn't come for free.
I wonder why is this difficult to grasp - i mean OK, the virtual capital (e.g. startup valuations, or even stock market values) MAY come from nowhere, because they can just equally return to nowhere - these can be pumped to infinity. But we are speaking of consumption money for people living hand to mouth - whatever dollar is given to them, goes to very material consumption. Where this extra stuff will come from, if people don't work more for them to be created? It just doesn't appear out of nowhere if Fed prints some bucks.
This is a facile understanding of how government spending actually works. The US Federal government _creates_ money. Just up and makes it, essentially out of thin air. Congress could have, had they felt like cooperating, printed ten trillion dollars and given every single person in the US a semi-weekly $1000 direct deposit to get everyone through. Keynesian spending is only a problem during inflationary times, but in the middle of a pandemic when tens of millions of people are told they cannot work _is not one of those times_.
Ultimately Congress (i.e. Senate Republicans) decided that 8 million people thrown into poverty and 300,000 needless deaths are better than actually doing anything.
It's appalling this comment hasn't been downvoted into oblivion with how wrong and uninformed it is. I think you should start reading here and consider an economics textbook to follow:
https://en.wikipedia.org/wiki/Monetary_policy_of_the_United_...
Yeah, well you are forgetting the people they were renting from have mortgages… 2008 will be a cake walk compared to this… can't "extend and pretend" forever…
This is absolutely not the case. The government owns and operates a mint, and we haven't been on the gold standard since Nixon. There is no zero-sum double-entry accounting when it comes to sovereign fiat currencies.
If you analyze the monetary policy of the federal government like it's a family balancing a checkbook, you are buying right into the rhetoric that keeps the peanut gallery shrieking "but the deficit!" and prevents us from actually investing in the public's health and needs.
Federal deficit is public surplus. It is the federal government investing in its citizens in the most literal way possible.
> Call me cynical, but people working in the service industry were the safest ones to let fail without causing domino effect - they are already poor so they don't have mortgages to default onto - they can't afford even in good times - and that avoids a major risk of repeating 2008.
That's not cynical, that's sociopathic.
With this sort of flexibility you are forced to abandon the zero-sum style of monetary policy, and you open up a lot of new possibilities for how to interact with the flows of monies. Republicans who shriek about the deficit know this, too, but keep their rhetoric the same because they and their friends benefit from the general public believing that the federal government works like "a family at the kitchen table," because they can shut down any talk of federal spending by pointing to that boogeyman.
It's a bit like telling people to stay home during the pandemic -- most people will do it faithfully so that the few that act out can be accounted for and will have a smaller impact than if no controls were in place.
We should note that the economy before the pandemic started is very differently managed to the one after. The economy was relatively predictable compared to today, so the tolerances shrunk somewhat to reflect that. You will note that the EU lifted those limits at the start of the pandemic and have come together to redefine a short- and medium-term policy to account for the circumstances.
This would make sense if only Eurozone members were part of the Stability and Growth pact, but as it turns out, other EU countries like Sweden or Poland, which neither are part of nor intend to join Eurozone any time soon, are also subject to these very same debt limit obligations stemming from the pact. Poland in fact has its own debt limit written into its national constitution.
It is like trade agreements anywhere else, but internalized into the EU's bureaucratic infrastructure.
I actively promoted the local Little Caesar's. At one point, they had so little business they were afraid they would go out of business, but they are unusually well-positioned to move to less risk of infection because they already had a pizza portal, it just wasn't being used by anyone.
I made sure to start using it and to promote to other people and to promote online ordering and ordering by phone. They soon were wicked busy and all orders had wait times and they began hiring new people.
I'm not against stimulus checks, but that's crisis management. It's not a real solution.
A real solution is solving the problems in the way work is structured that is keeping so many people from pursuing an earned income right now. And we aren't taking that seriously enough.
If you are in any position whatsoever to work on that, please do. I do what little I can with a small reddit called r/GigWorks, though I don't know that I'm accomplishing anything at all.
To try to limit the degree to which people get depressed over this: Keep in mind that we don't have hard numbers for comparing this with confidence to a scenario where people just kept working and more people died as a consequence or ended up permanently maimed by Covid.
Humans are terrible at counting the disasters that should have happened but didn't. High unemployment was the short-term cost for trying to lower the death toll.
Please take high unemployment seriously as a real problem and work on finding ways to employ people safely via remote work, contactless delivery methods, etc. The cure for this is getting people back to work. The way to do that while the pandemic is still ongoing is to take germ control seriously as a real need in every single job.
It has also allowed alot of people to move into nicer areas of NYC that could not afford to before.
Alot of people's quality of life has increased, and alot of people who lost their income on paper also lost their requirement to pay rent and avoid being evicted or just moved into their parents homes.
There are some who have lost their income but also still have to pay bills and their quality of life has not improved. I think those numbers are not reflected in this article especially in relation to all of the people who could not afford to live in nice areas or buy homes who have now been able to.
In NYC when asian demographic no longer could come to the u.s. To invest $300k into an empty apartment building that they will never inhabit to expedite their green card process, are now being inhabited by hardworking Americans who were able to buy condos that previously they were not able to compete with with international millionaires using real estate for tax and legal loopholes.
None of this is reflected in the article.
There is speculation house prices will continue to rise into next year due to supply constraints (new house construction slowed from March-May and is still recovering, houses that do on the market are picked up quick, etc), but we will see how it plays out.
Interest rates only matter if you already have money. Most people don't.
Lower interest rates equate to a noticeably lower monthly payment so I wouldn’t toss it out completely as a factor.
Alot of people I know who were living in the city got mortgages and bought houses for great prices in really upscale suburbs outside of the city, the final push to realize they needed more space when working at home when their kids are also not leaving for school, when otherwise a family with an middle or upper middle class income might be able to scrap by in NYC. So the real estate prices may not be changing much in NYC because people are not willing to sell right now because they know it won't be like this forever, but definitely mortgages are "free money" in the words of my mentor ( a hardworking devops guy for twenty years who was born and up till now raised a family in a nice neighborhood in brooklyn just moved to a suburb ) and in those cases there has actually been a surge of competitive real estate pricing in the suburbs of big cities that it has become competitive.
I can't say for NYC itself as most people I know who were in the position to buy a house but waiting for the right time decided to move outside of the city. In my building the number of units for sale has quadrupled since covid but I didn't track what buy priced were before. I rent in a nice condo building and my apartment was $3700 before covid and the same floorplans are going for $2250 right now with a quadruple in vacancy in the building.
I think one thing I know is commerical leases are not dropping the way residential is so restaurants really cannot pay rent. I am not sure how commercial and residential pricing is averaged together to reflect overall real estate pricing in NYC.
I know for the few of my younger friends / aka single without kids buying their first condo in the city it became much easier without the competition of international millionaires. I am not sure if they got the places for cheaper or just ended up being the best option over someone with millions in the bank already/mostly asian millionaires.
Wish I had a better breakdown but that has been my experience.
In brooklyn there are alot of midwesterners who don't have careers that are otherwise service industry workers who have used the drop in rent to move into the city when otherwise it was too competitive. My chiropractors assistants who lived in brooklyn their whole lives now have nice one bedrooms in manhattan and can walk to work.
Homeless people for a while are being put up in nice hotels to stop the spread of covid and have experienced a higher quality of life than they have before.
I would say I've seen a net move up in quality of life even if the richest people with vacation homes fled because they had somewhere to flee to.
Well, you haven't supported any of your claims with data, unlike the article.
Perhaps any steps we take to help the newly impoverished could also be extended to help the 45 million Americans who were living in poverty before COVID?
I think UBI implemented now would turn into the "Basic" seen in The Expanse books. We'd just see people with no incentives continue down the road of poverty.
What do you think about the concept of "trickle-up economics"?
>What do you think about the concept of "trickle-up economics"?
I'd argue that significantly enhancing the social safety net, significantly increasing minimum wages and, most importantly, providing strong incentives toward reduced incomes at the very high end, would provides significant long term economic advantages.
Why do I say this? For a variety of reasons:
1. >70% of US GDP is consumer spending. Increasing the amount and number of folks with discretionary income will boost demand significantly;
2. Enhancing the social safety net would encourage innovation and entrepreneurship. When you have an idea that you want to develop, but most folks don't even have a few hundred dollars available in an emergency will stop those folks from doing so -- In the current environment, unless there's immediate success, it's likely that such a person, and their family, will be sleeping rough and eating out of garbage cans pretty soon. With a robust social safety net, those folks can pursue their entrepreneurial ideas without worrying about starving in the street;
3. Incentivizing lower incomes at the very high end, via income taxes (cf. the 1950s), write offs for new business formation/development and other, similar incentives can boost employment, new business creation and focus resources on an ecosystem of smaller companies with real competition in many (if not most) industries;
4. Raising wages at the low end dovetails nicely with (1) above. Spreading wealth more widely (I am emphatically not suggesting forced wealth redistribution) among the population won't harm those at the top. How many houses, cars, dishwashers, pizza pies, miniskirts, throw rugs, yachts, toaster ovens, ball gags, window fans, telephones, snow globes, etc., etc., etc. can one family reasonably buy/use? Significantly increasing the incomes of those at the bottom will increase demand for all manner of products and services, strengthening the broader economy over the long term.
5. Finally, I'll wonder out loud how much "poorer" or "worse off" someone earning $5,000,000/annum is vs. someone earning $15,000,000/annum?
Having wealth/income more widely distributed across the population would create a stronger, more resilient economy over the long term -- one which would benefit those at the top and the bottom -- and lead to significantly better outcomes for everyone over the long term.
I'd note note that my reasoning doesn't include any arguments for "socialism." Rather, every single one focuses on how to strengthen and enhance a society and economy based on market principles.
Feel free to disagree, as I'm sure many of you will. I'd be interested to hear your arguments and will attempt to respond thoughtfully.
Edit: Fixed numbering.
Giving people money and raising minimum wages is indistinguishable to me. The only way they can be different is if you think economic output would be significantly different if people weren't "forced" to work by making wages the only avenue of income. That is the Randian perspective I am referring to.
I do think economic output would be significantly different, regardless of how you "spread it around."
A broader base of consumers will consume more.
A broader base of entrepreneurs will expand economic development.
Spreading the money around will increase consumption and incentivize increased economic output.
I'm not sure what you mean by a "Randian" perspective, based on what I wrote.
My post advocated for an enhanced safety net. I did not put any conditions (like "means tested") on such enhancements.
My post advocated for, in simple terms, "spreading the money around widely", in order to increase economic stability, reduced poverty and economic inequality.
I also implied that doing so would, over the long term, create an economy with less inequality by increasing the share of a (growing) pie by those with the least.
And that's somehow "Randian?"
I guess one (or both) of us need to go back and re-read Atlas Shrugged and The Fountainhead, because IIRC the changes I suggest are completely antithetical to those expressed in Rand's writings.
Edit: Added clarity WRT to the impact of increased wages/enhanced safety net vs. UBI.
>I was reacting to:
>> We'd just see people with no incentives continue down the road of poverty.
>Why would you reply to my comment defending your stance as if I had challenged it?
I can't reply to comment that contains the above, so I'll do so here.
Where did I say anything even remotely approaching "We'd just see people with no incentives continue down the road of poverty."?
I wasn't "defending" anyone or anything. I am not the user who posted the comment[0] you replied to.
And it seems strange that you found my comment adversarial, as it was at worst orthogonal to yours.
Upon reading the your reply to djsumdog's comment, I thought I'd add my own (related, and I thought, relevant) thoughts to the discussion.
Is that not kind of the whole point of this site?
If you had posted your comment without that header I would not have immediately thought you were part of the conversation, and instead taken the comment as an aside and not a direct reply.
>What do you think about the concept of "trickle-up economics"?
And so I answered your question.
If that was confusing to you, that's unfortunate and I'm sorry that the way I quoted you made you unable to comprehend the next twelve paragraphs of my post.
I'm not GGP who argued against UBI. Nor did I make any argument for or against UBI.
And I didn't make any argument even approaching "if we give people free money they will be lazy and sink into a life of dependence."
In fact, my argument was that if we make the safety net robust, we will allow people to be more productive and entrepreneurial.
I'm not sure who you're arguing with, but it's not me. Are you sure you replied to the right comment?
I was reacting to:
> We'd just see people with no incentives continue down the road of poverty.
Why would you reply to my comment defending your stance as if I had challenged it? Why are you injecting yourself into that conversation if you're not supporting the claim that I explicitly referenced, and making it look like you're replying to the things I'm saying by quoting me directly?
Moving back in with your parents so not having an income but also not having to pay rent. Alot of people I know in NYC have just chosen not to pay rent and are not being evicted so they are living in poverty but in fancy areas of brooklyn and not having to work.
Poverty to me is being homeless despite working and your income doesn't or barely covers the bills.
In the covid case many have lost their income but they have also lost their responsibility to pay the bills.
I don't say this to be mean nor do I include restaurant owners who have to pay commercial rent while the doors are closed.
I say this about kids who moved into their parents second vacation homes but lost income on paper.
I feel bad for people who have lost their jobs and have to pay rent. Not so much for people who have lost their jobs and their requirement to pay bills.
How we, as a collective society, address issues pertaining to the poor, disenfranchised, forgotten, downtrodden, speaks volumes about our priorities and interests. And I think, given the types of relief that has happened during this moment, and looking at how society answers this historically, we are not doing well.