To bailout the wealthy, the corporate elite or to bailout the people, that is the question

 

I warned in September of 2019 that an economic breakdown was looming, and an economic crisis is exactly what we got [I never foresaw the Covid-19 aspect though); nevertheless 2020 was a “financial disaster” for over 55% of all Americans, this is likely one of the main reasons why so many Americans were/are seriously disappointed about the size of the $600.00 “stimulus payments” in the Covid relief bill that Congress just passed because this year has truly been a “great financial disaster” for millions upon millions of working class and poor Americans.  More Americans than ever before are just barely scraping by from month to month, and $600 is just not going to go very-far at all.  We have seen that small businesses have been getting massacred by the thousands, millions of Americans are in imminent danger of being evicted from their homes [If not for the eviction forbearance Biden Administration Announces Foreclosure Moratorium and Mortgage Forbearance Deadline Extension), interestingly more than 70 million new “initial” claims for unemployment benefits have been filed since the Covid-19 pandemic first started.  The U.S. for all intents and purposes has plunged into a very nasty economic cesspool-recession and most of the country is desperately praying and hoping that the government will do more to bail them out of this contagion.

The truth is that we could not afford another 900 billion dollar “stimulus package” on top of all the other “stimulus packages” that were already passed this past year but that did not stop Congress from their give-away bailout path. We were already $27.5 trillion dollars in debt, and all of this reckless spending is putting us on a likely nasty inflation path (but those in power the elite and wealth could care less) as Biden has just announced another preliminary bailout package valued at $1.9 trillion and he expect to follow that one with another $2.0 to $2.5 trillion) nevertheless most Americans do not really care at all that we are literally destroying our economy and finances. 

Ø  Most people are in desperate need of money, and the vast majority of them want “BIG” checks from the government as soon as possible. A OnePoll survey that was just released asked Americans about the current state of their finances, and that survey discovered that a whopping 55% consider this year to be “a personal financial disaster” ...That is over half the country!

Ø  And for those that are employed, that same survey found that 62% are planning to take on a 2^nd job in 2021 in an attempt to make ends meet...that is if they can find work at all! Among employed respondents, 7 in 10 say they need a significant raise at their job in order to make ends meet.

o   That number cannot possibly be correct, as America is the land of plenty for all! If you listen to the financial media cheerleading all is well and all will prosper!

Ø  Of course, there are not that many extra jobs to go around.  Already, there are millions upon millions of Americans that cannot find a “first job”. 

With so many Americans financially hurting, it should not be a surprise that millions of households are getting behind on their rent and mortgage payments! One-in-seven renters with family incomes from $35,000 to $100,000 were not current on their rent in November or December. The overwhelming majority of these renters in this income bracket almost 79% are expected to face eviction within two months. Similarly, 10.9% of U.S. homeowners with a mortgage were not current on their mortgage in November and December; and 56.1% of those homeowners expected they will be foreclosed on in the next several months. Congress of course keeps extending moratoriums on rent and mortgage payments [kicking the can down the road] and that has been financially devastating landlords like myself and mortgage holders like banks [but banks have NOT even come close to recognizing these looming loan-losses on their balance sheets JMHO). At some point the moratoriums will end, and when that happens, we are going to see a huge Tsunami wave of evictions that will be absolutely unprecedented in U.S. history (My opinion). Meanwhile, many Americans are going into the cesspool of massive debt in a desperate attempt to keep themselves afloat and in their standard of living financially! More than one-third of households with incomes between $35,000 and $100,000 have borrowed significantly from credit cards. Many debt payments will come due sooner than later burdening families that still suffer from long-term unemployment and under-employment and added health care costs related to Covid-19. This should mean rising credit default rates looming on the horizon!

Interestingly even at this juncture 2021 small business revenues are down more than 33% nationwide during the month of January; we are seeing that every day, more small businesses are closing their doors permanently.

Millions of American's hopes, and dreams have been severely crushed, and there is nothing that our politicians can say or do that will bring those businesses back to life (they were unable to become zombies). Unfortunately, if you are one of those Americans that have lost a business or a job this past year, then that would definitely qualify as a “personal financial disaster”. And as you have seen repeatedly in my writings supported with hard data and real surveys most of the nation is deeply hurting, and the road ahead is still littered with bouncing betties (landmines) and it could get become extremely challenging for many-many Americans! In the near-term, government “stimulus bailout payments” will definitely help financially strapped and suffering Americans. A national economic meltdown has begun, and our politicians are clueless about how to really attack it; they will try lots of things to mitigate the carnage, but most if not all of their “solutions” will only mitigate the contagions on a short-term temporary basis.

I read an article from the Aspen Institute; stating that approximately 12 million U.S. renters are “at least $5,850 behind in rent and utilities payments”, and the Aspen Institute is projecting that up to 40+ million folks could be facing eviction when the rent and mortgage moratoriums finally ends (and it will end). Unfortunately, there are no indications that this nightmare is going to end.  Last week, another 900,000 Americans filed new claims for unemployment benefits...while an additional 423,000 folks in 47 states filed new claims for what is called Covid-19 Pandemic Unemployment Assistance, the program created to help gig and self-employed workers who have been displaced. Prior to 2020, the all-time record for new unemployment claims in a single week was just 695,000, and that old record was set all the way back in 1982. We shattered that old record in 2020. But the real concern that many economic cheerleaders are ignoring is that at this point, the number of new claims for unemployment benefits have been above 695,000 for 45 weeks in a row (a terrible statistic). This significant unemployment crisis (does not even take into consideration the under-employed) has significantly hit working class and poorer Americans disproportionately hard.  Even FED-heads are being compelled to admit that the unemployment rate for low wage workers “is above 20%”.