Unemployment Insurance During COVID-19
Committee on Finance, Unemployment Insurance During COVID-19: The CARES Act and the Role of Unemployment Insurance During the Pandemic
Tuesday, June 9, 2020, 2:30 PM
Earlier this year, I predicted a recession due to bubbles in Cryptocurrency and in mortgage backed securities holding rental housing assets, which I communicated to the House Budget Committee in January. A world-wide pandemic was the furthest thing from my mind. I reiterated these points to the Senate Budget Committee as I was suffering from a bad cold. Five days later, that cold turned out to be SARSCoV2.
In general, the current economy is more medical furlough than recession. Increasing and adding benefits for many turns it into paid sick leave funded by government, which is entirely appropriate. It is also dangerous. The implementation of CARES, particularly the Unemployment Insurance relief, is fraught with problems.
The States have not been able to absorb the money. There are simply too many people in need of assistance. The lump sum payments, which were negotiated by Secretary of the Treasury, Steve Mnuchin, made sure that landlords who had leveraged their properties into mortgaged backed securities would get paid.
This is convenient for the Secretary, as he helped set up these securities to extract the equity from the limited liability companies that he and his partners own. Aaron Glantz, who documented the establishment of these firms and securities should be called to testify before another round of stimulus checks are routed through renters to the Secretary and his partners.
The immediate danger, which no one is talking about (call me Cassandra) is that in short order, a large percentage of the unemployed are about to get large back payments from their state governments. This is occurring as some workers have recovered, but many in America’s Heartland are about to need that paid sick leave as SARSCov2 reaches their states. Recent reports indicate that food prices are inflating as the economy continues to stagnate.
This is what is known as a perfect storm. Economic historians will likely call this period of time HYPERSTAGFLATION. Sadly, the genie cannot be put back in the bottle, although the best course for now is not to panic if (and when) the storm breaks.
Attachment – Addressing the Economic Impacts of COVID-19, House Budget Committee, June 3, 2020
Tuesday, June 9, 2020, 2:30 PM
Earlier this year, I predicted a recession due to bubbles in Cryptocurrency and in mortgage backed securities holding rental housing assets, which I communicated to the House Budget Committee in January. A world-wide pandemic was the furthest thing from my mind. I reiterated these points to the Senate Budget Committee as I was suffering from a bad cold. Five days later, that cold turned out to be SARSCoV2.
In general, the current economy is more medical furlough than recession. Increasing and adding benefits for many turns it into paid sick leave funded by government, which is entirely appropriate. It is also dangerous. The implementation of CARES, particularly the Unemployment Insurance relief, is fraught with problems.
The States have not been able to absorb the money. There are simply too many people in need of assistance. The lump sum payments, which were negotiated by Secretary of the Treasury, Steve Mnuchin, made sure that landlords who had leveraged their properties into mortgaged backed securities would get paid.
This is convenient for the Secretary, as he helped set up these securities to extract the equity from the limited liability companies that he and his partners own. Aaron Glantz, who documented the establishment of these firms and securities should be called to testify before another round of stimulus checks are routed through renters to the Secretary and his partners.
The immediate danger, which no one is talking about (call me Cassandra) is that in short order, a large percentage of the unemployed are about to get large back payments from their state governments. This is occurring as some workers have recovered, but many in America’s Heartland are about to need that paid sick leave as SARSCov2 reaches their states. Recent reports indicate that food prices are inflating as the economy continues to stagnate.
This is what is known as a perfect storm. Economic historians will likely call this period of time HYPERSTAGFLATION. Sadly, the genie cannot be put back in the bottle, although the best course for now is not to panic if (and when) the storm breaks.
Attachment – Addressing the Economic Impacts of COVID-19, House Budget Committee, June 3, 2020
Attachment – Why Federal Investments Matter: Human Services, January 2020
posted by Michael Bindner at 2:30 PM
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