The next disaster - The economy

Maybe we can use this thread to understand what has been done to mitigate the effects of COVID-19 on the economy and what will be needed to avert a collapse of the economy.
Does anyone have a good source for what is in the stimulus package just passed?
It's my understanding that people can apply for unemployment of about $1200 a week and as many as 50 million may be unemployed.

 

In terms of the economy, I want to talk about something else that's been a bit under the radar: Interjected stimulus goes both ways. Just as printing dollars cheapens the market, a YUGE influx of workers, all at once will create another bubble that will be artificial(because such a surge in production won't last in the long run.)

Unlike in the aftermath of WWII, where the Marshal Plan and other events made production a decade long episode, reasserting people back into the work force will be one big shock but then an implosion within an implosion as we can't keep up the production from the surge.

One way to solve that, is that since we've reset it to ground zero economically is to create a new economic system. I'd been clamoring for years on creating more and more entrepreneurs, so that people could earn more money yet there would be jobs for the growing new class of adults.

This gives us such a tremendous opportunity to create a new equilibrium where former workers become entrepreneurs and new worker bees if you will are formed. Like the bee colony.

 

The federal unemployment add on from the stimulus adds on 600 weekly to whatever the state gives, this is up to 4 months. This alone is going to dramatically help those who are out of work. However, it's the businesses that we need to remain open that is going to be an issue. Many small businesses cannot stay closed for long.

I'm a small business owner and my income is cut about 80% right now. I also work in real estate and that actually is NOT slowing down at all.

 

That surprises me, people have the time/ability to buy real estate during these circumstances?

 

Yep, probably mostly retired people who's livelihoods haven't been much affected. Some are coming from large cities saying this was the final straw to get out of a city area. Some are looking to live off grid, some are wanting to homestead and become more self sufficient.

 

Apparently the stimulus bill merged the Fed with the Treasury, ostencibly placing the Fed under actual Federal jurisdiction and scrutiny.

That in and of itself may lead to a new economic system.

 

I'm not sure what it will look like, but I think you are right. It will be different from this day forward.

 

I was just reading where 50,000 stores have closed with most laying off workers.
I think the incentive to business was tax credits for keeping employees. Is that your understanding?

 

I can't answer since I don't know anything about that side. I have no employees. My business is a nightly mountain cabin rental, so it's tourism based.

 

I don't think that the economy is ever going to recover (to the status quo ante).

I just don't see it.

America will never be the same, and whatever we had before is lost forever.

The Economy will never recover and "social distancing" will become a permanent thing.

After this is over, I can't imagine ever going back to things like "pits" at rock festivals, etc.

Anybody who expects things to (ever) "go back to normal" is going to be in for a rude awakening.

It will take at least a generation to recover from this.

Maybe by 2040. If we're LUCKY.

Still, It will NEVER be the same. Never.

 

I don't know how much you make, but you might be better off using the new unemployment for small business owners.

 

I would make use of it if needed but I'll be okay for now. I'm not sure how it works for self employed but I know others who will definitely need it.

 

Drama much?

With ol Dirty Donald running the show for the next 4 years, I think your rude awakening will be here in November.

 

For those crying over their 401k (like me).

Retirement Accounts
Which retirement account rules are suspended?

For the calendar year 2020, no one will have to take a required minimum distribution from any individual retirement accounts or workplace retirement savings plans, like a 401(k). That way, you aren’t forced to sell investments that may have fallen in value, which would lock in losses. If you don’t need the money now, you can let the investments sit and hope that they recover.

This change would not affect old-fashioned pensions.

What if I have to take money out of my I.R.A. or workplace retirement plan early?

You can withdraw up to $100,000 this year without the usual 10 percent penalty, as long as it’s because of the outbreak.


You will also be able to spread out any income taxes that you owe over three years from the date you took the distribution. And if you want, you could put the money back into the account before those three years are up, even though the rules may normally keep you from making a contribution that large.

This exception applies only to coronavirus-related withdrawals. You qualify if you tested positive, a spouse or dependent did or you experienced a variety of other negative economic consequences related to the pandemic. Employers can allow workers to self-certify that they are qualified to pull money from a workplace retirement account.

Can I still borrow from my 401(k) or other workplace retirement plan?

Yes, and you can take out twice the usual amount. For 180 days after the bill passes, with certification that you’ve been affected by the pandemic, you’ll be able to take out a loan of up to $100,000. Usually you can’t take out more than half your balance, but that rule is suspended.

If you already have a loan and were supposed to finish repaying it before Dec. 31, you get an extra year.

 

I'm a little nervous about China. They are coming out of this months ahead of us and will desperately need market share for their products.

 

I know our political positions on this are the opposite, since I'm the "far right"(oh how I hate using that term since there's nothing conservative at all about my ideology, but it's the accepted term of most Westerners) but my position is unchanged: F CHINA, they got us into this.

Twice in 20 years, a chemical virus is of their 'accidental' incompetence. I don't want a SARS-3 from them. And if a politician has accepted lobbying money from them, they've earned my vote against their candidacy.

 

Are you serious?

Trump's Toast.

It would be a miracle if he held Biden under 300 EV.

Nov. 3rd is going to be a Long Night for Trump (and hs supporters).

I just hope that AFTER Trump loses that he doesn't try to start WW3 during the Lame Duck Period.

As far as the Economy?

It will NEVER be the Same.

Even if Bat Boy's 3rd Party Won (and Taylor Swift became First Lady) the Economy will NEVER be the same.

 

I am so thankful there are people like you out there that believe this crap......I am going to make millions in the next 12 months.

 

That all sounds good, but somehow it always just goes away when there is something you want and China makes it.

 

Doesn't the stimulous include bailouts for small business owners? I thought it included money for the owners personally, along with money to keep their employees on the payroll.

Best of luck to you, sincerely.

 

I just bought this place, moved in on March 3. The lucky part for me is that I took all of my savings out of the stock markets in early January for the down payment. Talk about good timing!

 

Did it? Got a link? Interesting.

 

I could be wrong but I believe that’s in the form of loans. Still could help but most small businesses that are struggling can’t take on more debt.

 

Where's Andrew Yang? He was right, one solution is to give everyone a basic income. Those who want more than just subsistence (which is most of us) can keep earning on top of that, and those who've always wanted to start their own business won't have to put it off for financial reasons.

I recommend a book called "Utopia for Realists" by Rutger Bregman. I'm pretty sure Yang has read it.

 

Read it for yourself. https://www.congress.gov/116/crec/2020/03/27/CREC-2020-03-27.pdf
Have fun.