The United States is suffering through the worst economic conditions since the Great Depression. In the first half of 2020 alone, our GDP shed nearly 10% of its value, and millions of Americans still have not returned to their jobs. In order to mitigate the damage, the U.S. government responded with the most expensive economic assistance bill in history, but even with the massive bailouts, many industries still face mounting debts and impending bankruptcies.
Shallow cash reserves have made SMEs (Small and Medium sized Enterprises) particularly vulnerable to the pandemic. While the Paycheck Protection Program has given them much-needed assistance, the allocation of the loans has been criticized for being too little. Many smaller brick-and-mortar businesses, which do not have the strong bank connections, have also struggled to obtain funds.
As the lockdowns have eased, the reopening of the economy has been contingent upon the ability to apply social distancing guidelines. Hanging questions remain about whether industries using business models relying on full occupancy rates will even be viable under the “new normal.”
For many in the hardest hit industries, personal finances have been subsidized by the stimulus checks, unemployment insurance and the $600 weekly unemployment insurance bonus. Eviction moratoriums have pushed off the need to pay rent and new mortgage forbearance rules have allowed for delayed payments. The future of America’s life support is uncertain as Congress and the President have yet to solidify a deal.
Meanwhile, our essential workers are still working on the frontlines, exposing themselves to the coronavirus. Yet, many of these essential workers are getting barely over minimum wage with little to no hazard pay, sick leave, or health insurance. And in a twist of sick fate, they would be earning more if they were staying at home on unemployment.
The pain will not end soon. Eviction moratoriums and mortgage forbearance periods will eventually end, and when they do, America could face a tsunami of evictions and foreclosures worse than what occurred in 2008. In the meanwhile, with no return on their investments, lenders and apartment owners are emptying their purses and building up debt. Another housing crisis is looming on the horizon.
Throughout all of this suffering, the stock market has nearly reached its past heights. The sheer disconnect between Main Street and Wall Street is stark and painful. On top of this, after years of corporate tax breaks, a burdening Federal revenue shortage could result in austerity cuts to welfare programs just as revenue shortfalls have already done on the state level. The rich appear to get richer while the rest of America suffers.
This is a complex, fucked-up economy. One lens is not enough to unravel the truths.