Fixing the Pandemic Financial Crisis

Have you ever wondered what all those smart economists who set fiscal policy really know? Given that the solutions they propose are often exactly opposite of my layman’s thinking, I sure have.

Maybe they’re driven by some personal or party agenda. Maybe they’re scared for their jobs like a lot of people are, and they figure short-term results are a better way to hang on a little longer than worrying about any long-term implications.

I’m wasting my breath speculating about their reasons. We don’t even really know the minds of those closest to us like our wives and children. Trying to figure out what motivates some economist in a faraway ivory tower is a pointless exercise for sure.

What I do know is that when things aren’t going so well financially for me, I tighten my belt and spend less money. I certainly don’t run out and start buying a bunch of stuff.

Granted, personal finances and the health of a nation’s economy are two different things, but I still think there are lessons to be learned. I’m also tired of hearing about how “markets love free money.”

There’s no such thing as free anything. Anybody who gives me so much as a cigarette at a cold bus stop is going to want something in return, even if it’s just acknowledgement of their righteousness.

All this stimulus the government’s printed and just given away is bound to drive up the national debt and devalue the dollar at some point. As the saying goes, the chickens will come home to roost eventually.

Furthermore, the wealth gap widens under the weight of misguided attempts to keep the economy afloat. People who’ve managed to skate through unscathed stash that money in investments and grow their nest eggs, while it evaporates into thin air for those who really need it, barely hitting their bank accounts before it’s spent on this month’s expenses as they’re left wondering how to meet next month’s.

At the same time, people are hurting and something needs to be done. Unemployment is high and will probably tick higher. Many are struggling to pay their rents and mortgages and food is even getting tough to put on the table for some.

Right there is where I would start, with basic necessities like food, shelter, and heat. Before worrying about stock markets or any other macro-concern, I’d address micro-level survival.

I’m not even going to pretend to know anything about whether we should remain in some kind of lockdown or broadly open back up business in order to kickstart the economy. That’s off the table for this article, and I’m just going to assume the pandemic will have an ongoing dampening effect on our ability to do business as usual for at least a few more months.

Okay then, if our biggest financial concern is survival, let’s focus on doing something to promote that rather than trying to provide Wall Street a cushy landing. If I’m in charge, that means you can kiss another stimulus check goodbye.

If, like me, you don’t buy the idea of free money, then it’s just common sense to acknowledge that an economic crisis is going to bring financial pain to someone. If we’re going to take some of that pain away from the little guy, then someone else will have to bear it for him.

Who then? How about someone who can afford it?

I can certainly think of a few who can. Big corporations can spread their losses a hell of a lot easier than you or me.

Does anybody think freezing mortgage payments for anyone who lost their job during the pandemic is really going to bankrupt Wells Fargo? I sure as hell don’t, and if it does, then maybe their CEO wasn’t worth that salary the size of a small country’s GDP after all. Same goes for Exelon or any other big energy company if we mandate they cut out of work folks a break.

Big corporations should rein in spending like the rest of us. They’ll still be collecting from anyone who is working, so they’ll just have to suck it up and make do on that. You wouldn’t see me shedding any tears over news of an across the board pay cut at some big bank either, if that meant its workers could keep their jobs.

Instead of handing people money, we can reduce their need to spend by temporarily eliminating some of these big monthly expenses. No more car payment, for example, if you’ve lost your job. I’m pretty sure Ford can limp through alright. Visa, Mastercard, and Citibank… they’ll also be just fine collecting twenty percent less on monthly payments and interest until this is all behind us.

If you rent instead of paying a mortgage, that’s an easy fix too. Report your job loss to the landlord, and he gets relief from the mortgage company just like an individual homeowner.

Maybe you’re in the unenviable position of owning a small business nobody can come to like a restaurant, gym, or hair salon. Great, we got you covered. Commercial rents for impacted businesses just got frozen. You might not like sitting around doing nothing until this mess is over and you can get back to doing what you do, but at least you can do it without worrying about defaulting on your lease.

What if you’re behind on your student loan payments? Forgiveness is for God if you believe, so nobody’s going to be forgiving anything, but we can certainly defer them for you, interest free. We’re pretty sure big ole behemoth Sallie Mae or whatever other giant it is that has your loans can weather the storm, and weather they must without bitching about it.

I’ve covered many scenarios that are causing folks sleepless nights about their finances during this pandemic — mortgage, rent, utilities, car payments, student loans, and other interest-accumulating debt. If there’s a big one I neglected to mention, we’d push it like the others.

Government does have a role to play here, but it’s a much more targeted role than just indiscriminately handing out checks. If there’s extra funding to be had, it should go to programs aimed at the most needy like the Supplemental Nutrition Assistance Program (SNAP).

Notice the aligned goals of pausing personal financial obligations and strategic government spending. Both are designed to provide basic needs for those most in need so we can hang on until — I’d say until the sun shines through, but I don’t really care if the sun ever shines or about your happiness, especially when we’re scratching, literally and figuratively, just to survive — so I’ll say until we’re able to return to some kind of economic normalcy and save the rest of my thoughts on the absurdity of anyone thinking they’re entitled to happiness for another rant.

This all might hurt a little, but at least we’ll be hurting together — big guy and little guy joined in one big kumbaya suffering party. I know I’ll feel better about doing my share if they’re doing theirs too.

Things will get better eventually. When they do, everyone will be expected to start meeting all their obligations again. You know, adulting.

Go ahead, jump in there and tell me I’m just a dumb grit with a crazy idea that won’t work. I’ll fire right back by pointing out the damning truth that the current stimulus stupidity has a measurable track record of ineffectiveness.

We had a Republican President who made sure he signed the checks so we’d know exactly who the benevolent benefactor saving us all from ruin was. Only he wasn’t personally signing anything. He was actually just a surrogate, signing our names to a bunch of debt we’ll all be repaying long after he’s dead or sitting in some gaudy palace called Mar-a-Lago. Thanks buddy for concerning yourself more with trying to save your own dwindling approval rating than with doing the tough job of leading.

Now we have a Democrat who, when you look past his less abrasive personality, wants to do exactly the same thing. Irresponsibly spending beyond our means and passing the buck to future generations: it’s the only bipartisan thing we’ve done in years and it needs to stop.



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