The economic devastation caused by the coronavirus pandemic has begun—and the numbers aren’t pretty. The new unemployment numbers are out, and over 3 million Americans have filed for unemployment benefits in the past week alone. That staggering total is larger than the entire month of April 2009, which was the highest month for unemployment filings during the mid-2000s financial crisis.
The Wall Street Journal reported, “A record 3.28 million workers applied for unemployment benefits last week as the new coronavirus hit the U.S. economy, marking the end of a decadelong job expansion.
The number of Americans filing for claims was nearly five times the previous record high. The surge was for the week ended March 21 and could rise further. Pennsylvania, Ohio, and California were among 10 states reporting more than 100,000 claims, leaving unemployment systems overloaded.
Millions of U.S. businesses have announced layoffs or furloughs as their cash flows dry up. Several state and local authorities have ordered nonessential businesses to close in response to the coronavirus pandemic, bringing the great American job machine to a sudden halt.”
The numbers are only going to get worse. Many people who have recently been laid off or let go haven’t filed for unemployment benefits, but they will eventually raise the total even higher. Things are going to get worse before they get better.
Fortunately, in the early hours of the morning, the Senate voted to pass a $2 trillion stimulus package to provide relief to American workers and businesses. The measures may help in the short-term but won’t do much good in the long-term. Companies can’t make money if they are forced to be shut down. It’s common sense, but unfortunately, our politicians on Capitol Hill are lacking in that department.
The Senate approved the stimulus bill by a unanimous vote of 96-0. That is unheard of in these divided times. Republicans and Democrats were able to put partisanship aside—minus Nancy Pelosi—and pass legislation that is intended to help Americans. Such a feat was unthinkable just two months ago when the Democrats impeached the president and were trying to remove him from office.
The legislation will send checks to Americans either electronically or through the mail with a payment of $1,200 for those that make less than $75,000 a year based on their 2018 or 2019 tax returns. The legislation also contained the following as reported by CNBC:
- “Give one-time direct payments of up to $1,200 for individuals and $2,400 for couples, with $500 added for every child, based on 2019 tax returns for those who filed them and 2018 information if they have not. The benefit would start to phase out above $75,000 in income for individuals and $150,000 for couples, going away completely at the $99,000 and $198,000 thresholds, respectively.
- Boost unemployment insurance, adding $600 per week for up to four months on top of what beneficiaries normally receive from states. It expands eligibility to self-employed people and independent contractors.
- Create a $500 billion pool of taxpayer money to make loans, loan guarantees or investments to or in businesses, states and municipalities damaged by the crisis.
- Give $25 billion in grants to airlines and $4 billion to cargo carriers to be used exclusively to pay employee wages, salaries, and benefits, and set aside another $25 billion and $4 billion, respectively, for loans and loan guarantees.
- Provide $17 billion in loans and loan guarantees for unspecified “businesses critical to maintaining national security.”
- Put $117 billion into hospitals and veterans’ health care.
- Provide $16 billion for the strategic national stockpile of pharmaceutical and medical supplies.
- Give $350 billion in loans for small businesses to cover salary, wages and benefits, worth 250% of an employer’s monthly payroll, with a maximum loan of $10 million.
- Include a tax credit for retaining employees, worth up to 50% of wages paid during the crisis, for businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year.
- Require group health plans and insurance providers to cover preventive services related to coronavirus without cost-sharing.
- Delay payroll tax for employers, requiring half of the deferred tax to be paid by the end of 2021 and the other half by the end of 2022.
- Ban companies that take government loans from buying back stock until a year after the loan is paid back.
- Bar employees or executives who made at least $425,000 last year from getting a raise.
- Stop President Donald Trump and his family members’ businesses from receiving emergency taxpayer relief. The provision also applies to Vice President Mike Pence, heads of executive departments, members of Congress, and their family members.
- Suspend federal student loan payments through Sept. 30 with no accrual of interest on those loans.”
Even with all this economic support, the economy will continue to slump until the virus is contained and businesses reopen. Hopefully, President Trump’s goal of opening the economy by Easter comes to fruition.
A revitalized economy would be another miraculous resurrection celebrated by people everywhere.