Too Big to Fail – The American Public
With record increases in business closes and unemployment claims, it’s clear that a significant number of American families are at immediate risk of some very rough times.
The Department of Labor reported a 30% increase in jobless claims. The White House has asked that no exact numbers to be reported for the time being, but all predictions indicate that this number will continue to rise.
In Florida, the maximum unemployment compensation rate per week is $275. The average rent for a two-bedroom apartment in Florida is $947 per month. The average rent for Broward County (Fort Lauderdale) is $1700 per month.
I hope the problem is becoming clear very quickly. Too Big to Fail – the American Public.
Across the nation, some 80% of the American workforce lives paycheck to paycheck.
BIG INDUSTRY is already demanding a bail out.
I even get the theory of “too big to fail” for business. That the contributions of some of our largest industries, i.e. banking, car manufacturing, insurance companies, et al, are so critical that their losses could cause widespread chaos in the American economy.
But those same industries, for the past several years, have been reporting record profits. Now they are asking for bailouts again. ProPublica tracks American companies that received bailouts from the financial disaster in 2008. Seems like they have all done well for themselves, with money subsidized by the American workforce.
So far, I’ve been getting loads of emails, especially from my credit card companies, with some headline like “we’re here to help”.
The help part is kind of cloudy – mostly how to pay your bill online and disaster recovery planning.
We are already seeing initiatives preventing foreclosures and evictions. Initiatives for suspension of interest calculation on IRS debt and student loans are also in the works.
But Americans are drowning in debt – more than $14 trillion dollars of it. Too Big to Fail – the American Public.
Just a quick and simple #dothemath summary:
If 80% of the American public lives’ paycheck to paycheck, and there has been a 30% rise in unemployment claims:
Population in the United States 329,415,771
63 % of the U.S. population participates in the workforce. 207,531,936
80% of the U.S. workforce lives paycheck to paycheck 166,025,549
30% increase in the number of unemployment claims 62,259,581
80% of the increase in the number of unemployment claims for
People living paycheck to paycheck 49, 807, 665
This means that in one week alone, at least 50 million people, who live paycheck to paycheck, now have no other means of support than unemployment of $275 (in Florida) per week. Too Big to Fail – The American Public.
For those of you that think “they should have saved more”, take a look at the math for Living Wage earners.
The proposed stimulus of $1200 would help. But if that money is directed to rent, car payments, insurance and other secured/unsecured debt, it’s benefit to American families will be zero.
But $1200 that can be spent on food, and no other debt, would help tremendously. It would also infuse at least some money BACK into the local economies, like grocery stores and small businesses.
Charitable organizations and state funded programs are going to see record surges in need.
The more we can keep people at least somewhat self-sufficient, the better we can allocate resources to the most in need.
Business and Risk Management 101: allocate risk to the segment most likely to recover from it, not to the most vulnerable to it.
This is the circular economy.
The Federal government subsidizes businesses, industries and state funded programs. These businesses, industries and states pass those subsidies on to consumers/small businesses. Consumers and small businesses contribute to local economies, increasing the best likelihood of recovery post Coronavirus.
For 30 days, Americans pay no bills – no utility bills, no phone bills, no mortgages/rent, no secured/unsecured debt bills, no student loans, etc. Suspend interest calculations on all debt for an initial 90 day period. Post #Coronavirus, cut interest rates on debt for American consumers (the average interest rate for consumers is 16%).
We are all in this together. But we aren’t all equal. Too Big to Fail – The American Public.
American companies talk a lot about Corporate Social Responsibility.
American politicians talk a lot about “folks” and the importance of small businesses.
Now is a good time to see if they mean it.