Economic impact of the COVID-19 coronavirus outbreak

[mountainmoma]

From the Washpost article linked (it has been un-paywalled)

"What about people on Social Security? People on Social Security are eligible to receive the coronavirus relief payment as long as their total income does not exceed the limit. Low-income Americans on Social Security do not need to file a tax return. As long as they received an SSA-1099 form (the Social Security benefit statement), the federal government will be able to send them a payment via the usual way they get their Social Security payment. Retirees and people on disability are both eligible for the special payment. "

"Who won’t get a check? The main people excluded from receiving a payment are the wealthy, “nonresident aliens” (i.e., foreigners who do not hold a green card) and “dependents” who can be claimed on someone else’s tax return."

"Are the checks taxable? No, they are not taxable. The only catch is that technically a person’s 2020 income is what qualifies them for the payment. Since no one knows their total 2020 income yet, the government is using tax returns from 2019 and 2018 to figure out who qualifies for a check. It is possible that someone may have to pay back some of the money if his or her income this year turns out to be significantly more than it was in 2019 or 2018. That’s expected to be a relatively small share of people, and the money would not have to be paid back until April 15, 2021. "

well that is a good change, they originally didnt have a provision for social security.  That will take care of alot if the people with low incone

[mountainmoma]

It sounds like the unemployment benefits, which are state programs, are being very generously added to by the federal stimulus money, which makes me wonder even more why the rush to have renters out here so easily stop paying rent, except that a certain segment of people here dont care much about private property rights, it just seems premature, and now, see, the unemployment for the low income earners should be about what they had when employed, dont see how they could not meet rent.  Now, small business and commercial rents, that will be a problem

The $2 trillion stimulus package will pay workers $600 a week on top of whatever sum they receive in their state-level unemployment claim for a period of up to four months, according to provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The CARES Act will cover unemployment payments for both jobless self-employed workers and independent contractors.


Many states typically have what’s called a “waiting week” between the time a person files a jobless claim and when they start receiving unemployment benefits.

The CARE Act says the federal government will pay the cost of that first “waiting week” so people can have quick access to cash, according to an analysis from Sen. Charles Grassley of Iowa, a Republican.

https://www.marketwatch.com/story/the-2-trillion-stimulus-deal-will-help-those-filing-unemployment-claims-heres-how-2020-03-26?mod=article_inline

[Mr. Bill]

Trump has drafted General Motors to make ventilators.

3/27/20: Statement from the President Regarding the Defense Production Act

Today, I signed a Presidential Memorandum directing the Secretary of Health and Human Services to use any and all authority available under the Defense Production Act to require General Motors to accept, perform, and prioritize Federal contracts for ventilators.  Our negotiations with GM regarding its ability to supply ventilators have been productive, but our fight against the virus is too urgent to allow the give-and-take of the contracting process to continue to run its normal course.  GM was wasting time.  Today’s action will help ensure the quick production of ventilators that will save American lives.

3/27/20: Memorandum on Order Under the Defense Production Act Regarding General Motors Company

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Defense Production Act of 1950, as amended (50 U.S.C. 4501 et seq.) (the “Act”), it is hereby ordered as follows: ...

Sec. 2.  Presidential Direction to the Secretary of Health and Human Services (Secretary).  The Secretary shall use any and all authority available under the Act to require General Motors Company to accept, perform, and prioritize contracts or orders for the number of ventilators that the Secretary determines to be appropriate. ...

[FreeLancer]

So much for the free market solution......

[Carver]

Traveling & RVing: https://www.latimes.com/business/story/2020-03-27/rv-companies-coronavirus-business

[David in MN]

Chef Thomas Keller was the first (to my knowledge) to sue his insurance because depending on where you sit this type of event could be covered. There's going to be a lot of murky legaleze untangling exactly what the role of insurance right now is.

[David in MN]

You can fly round trip NYC to LA for $65.

I took a little solace from Gene Epstein who has made a point that all the businesses suffering right now aren't bad businesses but suffering a cash flow problem so if they can get creditors and landlords to float for a while we might see a quick recovery. Maybe some good economic news.

[FreeLancer]

President Trump says federal guidance urging social distancing will stay in place through April 30. He backed off his hope that the country will be “opened up” by Easter Sunday, saying that deaths due to the coronavirus will likely peak in two weeks. ”Nothing would be worse than declaring victory before the victory is won," he said.

[David in MN]

Article on the BS stimulus, how it was a procedure blunder, all the pork, and how Pelosi got another one past the GOP.

https://thefederalist.com/2020/03/30/how-republicans-helped-nancy-pelosi-pass-another-unexamined-pork-stuffed-stimulus/

There are some interesting things that will come out of this, too. In my life the industries the highest regulated and tied to the state have all been the ones to blow up. Whether it's banking, housing, medicine, war, (soon to be education) it's all the stuff we hand to the government that go wrong. I hope in some aftermath we can assess exactly how the CDC bungled the tests while the FDA forbade private development. And then we need to use a war powers act to let non-FDA approved manufacturers make life saving equipment they could have been doing 4 months ago. What's the cost of banning the private sector, having a rush-rush throw money from helicopters bailout, and a mad scramble to cobble together supplies?

I am  curious if our society could manage to eliminate and streamline red tape to cut costs. It's the tiniest example but eliminating open container laws is telling. Granted it took a global disaster to realize letting people walk around with a beer is fine. But maybe we could take a knife to the legal code more  generally. It's a hope.

[surfivor]

On a recent listener call back, Jack was saying someone he talked to had a mortgage deferment for 12 months without having to prove a hardship

I saw that they recently passed Care Act that seems to mandate something of that sort for mortgages that are insured by the federal government

However, the way jack described it it sounded as if you could just suspend all mortgage payments though that sounds too good to be true. It seems to me rather that you would have to pay a giant lump sum after the 12 months to make up for the deferment which why would he promote that as a great idea ? I am really not sure what it all means

https://www.edwardjones.com/market-news-guidance/guidance/cares-act-highlights.html

“Mortgage Relief for Homeowners: Requires the servicers of federally backed mortgages to postpone mortgage payments at the request of the borrower, provided the borrower affirms financial hardship due to COVID-19. The postponement must be granted for up to 180 days and extended for an additional period of up to 180 days at the request of the borrower

[FreeLancer]

So my wife’s medical center is losing money every day they’re in pandemic mode. Like in 2008, it’s likely that pay cuts are coming. My wife is worried that some of her team could be considered nonessential and fired, or have their pay cut so severely they couldn’t survive. 

She asked me how long we could pay the household bills if she were to forego her salary in order to keep her team intact.  Great....

[Mr. Bill]

So my wife’s medical center is losing money every day they’re in pandemic mode. Like in 2008, it’s likely that pay cuts are coming. ...

A friend in Montana posted this.  I assume it's representative of many other hospitals across the country:

4/13/20: Hundreds of furloughs possible at Kalispell Regional Healthcare

...KRH has boosted its COVID-19 clinical teams, support staff and resources needed to deliver life-saving care and ensure patient and staff safety as a result of the pandemic, according to a news release. However, many other services at KRH have been halted, contributing to a significant decline in revenue.

“The compounding effect of the loss of patient volumes, cancellation of elective surgeries, and the closure of entire service lines has had a tremendous financial impact on KRH,” said KRH President and CEO Craig Lambrecht, M.D. ...

KRH executives, physicians and executive directors will be taking reductions to their salaries effective immediately. Additionally, KRH will begin furloughing and reducing the hours and shifts for certain employees. According to a news release, the furloughs could impact about 600 employees. ...

[David in MN]

Oil is, for the first time ever, pricing negative. There is so much supply and so little demand we have run out of room to store it. For the first time since the invention of the internal combustion engine striking oil is a bad thing.

We are literally pricing the motive power of the world as though it were a cost not a commodity.

https://www.yahoo.com/finance/news/oil-drops-18-low-global-222817793.html

[Carver]

It is not inconceivable that you will be paying only taxes on gas you pump.

[surfivor]

 What is the upside and downside of selling say microgreens or greens in this type of situation ? I've never tried anything like that but if you call some restaurant and try to pitch greens they may say "call back after the lockdown is over" do you think ? They may be doing takeout but maybe that is reduced and maybe they don't want to deal with new people or maybe they would ? Maybe in the new screwed up world you can't just grow greens in your house and sell them because maybe the government or someone will think it's risky ?

[David in MN]

Try not to pop a lung laughing at AOC's tweets. Gasoline is near free which is evidence that we need green energy. It's like when you go to the grocer on a budget and turn down the free potatoes in order to buy organic kale.

The market is telling me to buy a V8 and she, with an economics degree, thinks it's the end of oil. I will cut a check to keep that dummy talking.

[mountainmoma]

Well, our ( CA ) Governor and others in power, our hard at work miss-using our federal disaster money.  This made me twitchy last evening when I heard. 

The plan is to use FEMA money to buy prepared meals from resteraunts to deliver to low income, "at risk" seniors.  But, the details.....

we already HAVE a robust system that is delivering meals to seniors, meals on wheels, who does it at low cost, and we already have extra Federal $$ being sent that way.  In addition, extra Fed $$ in the form of USDA foods and extra Food Stamp benefit amounts ( all benefits now raised to the maximum for family size, meaning, for example, a family size of one person will get $194, it will not be reduced due to income) are here .  I have a friend who works at the local food distribution site, no questions asked about income, drive up, pick up generous amounts of food weekly.  Locally we have a different program delivering free food  bags weekly to seniors homes, in addition to meals on wheels.  If there are any holes in these methods in any locations, then of course, we should be fill them.  We even have had very locally for the past 6 weeks a completely volunteer weekly meal delivery to any household who asks, completely grass roots, social media organized, and this is of course very cost effective --- but we are not giving them tax payer funded food or money to buy the food ( well, not necessarily, they may go to the weekly distribution to get food, or maybe they havent thought of that ? ) !

So, the details on Californias new program.  Resteraunt food at up to $28 a person for dinner, up to $66 a day for all 3 meals !!  Paid for out of FEMA funds ( well, 75% paid out of FEMA funds, 19% state funds, rest county funds) All the people suffering from various emergencies over the years, fires, storms, floods who had losses, unpaid losses, but we fund a total boondoggle like this ?  Oh, he says it is a 3-for.  (1) We get the sales tax for state/county/cities who miss is, and in California this is just about total of 10%  in the areas who would implement.  So, 10% just goes back into government coffers. (2) bail out certain resteraunts by giving them more business  (3) The optics are great, we are bringing more meals to low income seniors

The optics to me are, we are spending money that dos not realy exist that we do not need to spend.  And this is just the one we are hearing about ! What I see is, what are we doing ?  What do they think is going to be our future -- not cost effective solutions, but do the MOST costly solution, with tax payer money debt obligations. 

The economics, the change in Society, these are the scary parts of this time.   I would rather the illness

[David in MN]

Oh, how about how goofy it is that I need to mail seeds to friends in Michigan? Because their idiot governor decided that the state lottery was needed but seeds were banned. So people who are trapped at home can't even busy themselves with a victory garden, an American tradition.

I agree, MM. It seems like the schemers have upped their game.

[mountainmoma]

More on the California resteraunt rescue

California has about 5.7 million people 65 and older and it's not known precisely how many will be eligible, though Newsom said he expects it will be millions. To qualify, seniors must earn below 600% of the federal poverty level, which is $74,940 for an individual and $154,500 for a family of four. They also must have either been exposed to the virus, have a high risk for exposure or a compromised immune system.

A qualifying senior will get up to $66 per day for three meals at local restaurants that meet certain criteria. If 2 million people sign up and get all three meals a day, the price tag would be about $4 billion per month.

The federal government will pay for 75% of the cost

It will be 2 million people easily, so that is $4billion dollars a month, 75% out of Federal Funds, FEMA, for a single person making as much as $75,000 a year -- How is that even low income ? Gov. Newsom is going all out on spending his way to popularity, he is also ambitious for more than being Governor here.  First he's giving taxpayer money to illegal aliens, and now prepared food for people who can afford to feed themselves

https://www.yahoo.com/finance/news/taxpayers-pay-restaurants-feed-seniors-221100347.html

[Carver]

Hertz Cancels 90% Of New Car Purchases, Further Pressuring Already Desperate Automakers

https://www.zerohedge.com/economics/hertz-cancels-90-new-car-purchases-further-pressuring-already-desperate-automakers

[surfivor]

Good, job ! Stay home, stay safe !

https://www.westernjournal.com/music-store-owner-weeps-whitmers-lockdown-forces-give-dreams/?fbclid=IwAR2pWNjwCdpGh4vPqgI37h2jI5_YtzmMg8Tn4NamQEzUYKCN3VNe3DVHpEM

A Michigan man with a passion for music and teaching children has seen his life’s work wiped away with the stroke of a pen by Democratic Gov. Gretchen Whitmer.

Steve Walker, the owner of Walker Music & Textiles Co. in Hastings, Michigan, wept as he spoke with WXMI-TV during a recent interview in which he said Michigan’s lockdown order had forced him and his wife out of business.

...


Walker blamed Whitmer directly for killing his dream.

“I put the responsibility of that on the governor’s shoulders because if she had been reasonable, this would not be happening,” he said. “But oh well. That’s the way it is. That’s life. And I have to move on and deal with it.”

The musician and soon-to-be-former businessman also made it clear he never wanted anything from his government but his right to the pursuit of happiness, which he has been denied, thanks to Whitmer’s lockdown order.

“I don’t want a stupid handout from the government, I want my hands untied so I can work,” he said.

[Carver]

Pandemic claims another retailer: 118-year-old J.C. Penney

https://www.news8000.com/pandemic-claims-another-retailer-118-year-old-j-c-penney/

[Stwood]

Such a shame. They've apparently been circling the drain for several years now.

Mr Penny has probably turned over in his grave several times.

[Morning Sunshine]

small ballroom dance studio my son attended has shut its doors.  Not a big deal nationally, but locally, it was where our kids learned formal dancing.  And this mom & pop shop that has spent the last 15 years teaching and loving our kids is gone.  And so is their dream.

[surfivor]

This article says Maine might shut libraries because of fiscal issues related to the virus , that is not a good sign. For me, I sometimes need to do interviews and job searches from the libraries in Maine or occasionally work online

https://bangordailynews.com/2020/05/12/politics/local-budgets-in-maine-are-seeing-massive-shortfalls-federal-help-remains-uncertain/

Maine cities and towns are facing the prospect of massive budget shortfalls that would force them to substantially cut services while federal relief aimed at making up for revenue lost due to the coronavirus remains up for debate in Washington.
..

If federal aid does not come through, it is difficult to say where cuts would come, said Gove, though libraries, parks and recreation might be among the first programs cut. As the shortfall continues, that puts more pressure on property taxes to cover essential services, such as public safety, waste disposal and road maintenance.

“How bad it could get is an open question,” Gove said.

[iam4liberty]

Interesting to see the extent of consumer change.

[Carver]

Very interesting, just temporary?

[iam4liberty]

Very interesting, just temporary?

Depends on how they respond.  If they become a more open society like South Korea, Taiwan, and Japan then they will quickly find a friend in the American people.  If they continue with the dystopian closed society; acting irresponsibly internationally like denying the origin and extent of this virus, then they will become pariahs and plummet back into poverty.  The choice is theirs to make.

[Carver]

I was questioning whether American's resolve will dissolve as the virus and times goes by.

[iam4liberty]

I was questioning whether American's resolve will dissolve as the virus and times goes by.

Doubtful.  This pandemic is just the tip of the iceberg.  Younger generations have seen their treatment of Tibet and censorship in movies and games.The older generations have seen their treatment of Hong Kong and religious groups as well as industrial espionage.  So they have few defenders in the West outside of some paid for politicians and bureaurats.  The goodwill fostered by Jiang Zemin's "opening up and reform" has been squandered by Hu Jintao and Xi Jinping.  American sentiment will just harden if, as the investigation proceeds, Xi continues sabor rattling.  And remember, Chinese goods are now more expensive than many competing markets.  So little economic advantage to work with them.  India is on ascendency, especially given the modernization of their energy sector.