COVID-19 Shutdown Exit Strategy?

[brewer12345]

Well, unlike the Feds, the States cannot print money - so their day is coming.

States are already begging the Feds for cash just to cover their routine expenses. There is a big moral hazard there - some states SPEND, per capita, 50% more than average. Not sure why the Feds should backstop that.

Obviously they shouldn't.

 

[Klubbie]

I didn't say the restrictions shouldn't have been put into place. The new problem is that we're now in an unprecedented economic crisis only 4 or 5 weeks into it. The measures the government put into place to help people through it all haven't been forthcoming for many of them. In effect, the government said they'd prevent people from being able to go to work, but toss money at them to keep them from starving. It sounded great in theory. In practice, many haven't seen one penny of the promised unemployment or programs for small businesses to keep afloat.

Income for 22 MILLION people (and growing every week) is gone. That just counts those who've been able to get their applications filed, which has been exceedingly problematic. The government promises made to the first few million instantly unemployed people from the last month haven't been sufficiently taken care of yet. The nightly world news showed yet another miles-long line of cars waiting for free food, with some having waited in line for as long as 18 hours. Disease or not, people still need their basic needs taken care of. That's not being done sufficiently, with no significant improvements in sight.

This forum is made up of many people who are financially independent who don't anticipate ever having to wait in a charity line to get food. I'm thankful for that! Our household has been impacted to a relatively minor degree by all this. I'm thankful for that!

It's easy to say that others shouldn't be allowed to go back to work when your livelihood/income hasn't been taken away.

I haven't seen any governor suggesting that everything open back up at once and all will be as it was before. Quite the opposite. Our governor has said that when some restrictions are lifted, he'll wait a couple of weeks to assess the impact. New daily cases, hospitalizations, availability of PPE, etc. If all appears to still be manageable, then he'll lift more restrictions. If not, he'll hold it at that level for awhile. Constant monitoring throughout. We may have to wear masks (still only recommended, not mandated). Stores and employers could require masks at their discretion, if it's not mandated statewide. Social distancing will still be required, when it's possible, masks when it's not possible, as in the example he gave of an essential employer who has remained open. That employer literally can't have social distancing and still be able to operate. So they mandated masks for their employees and it's worked well. Those are just some examples of what our state is proposing for the initial stages of opening up. A lot will be up to employers and businesses to determine what works for their situation to keep customers and employees safe. Compliance will be enforced via customers refusing to patronize businesses that aren't taking reasonable precautions. Employees could report employers to their local health department. He said that the elderly and those with underlying health conditions may need to continue to stay home for awhile, but it's up to the individual to decide that.

These measures to reopen the economy, slowly and responsibly, with continuous monitoring, are necessary, unless someone can figure out how to fix the problems that government is having getting money to the unemployed regularly. At any rate, the "helpful" measures were only to last about 3 months anyway. I don't think the politicians ever intended for us to have these restrictions in place to this degree until everyone can be tested or vaccinated. They can't even manage to provide for everyone they threw out of work for even a month so far, much less 3 months, much less consider doing it for 18 months. It'd be laughable if not so tragic.

+1

I'd also add that it's only a matter of time before this starts hitting folks in white collar jobs who need their paychecks. Not all white collar employees have 6 months of cash. In fact many live paycheck to paycheck. I am still working from home and employed. But my company is completely dependent on retail sales to make money. Many of our biggest clients were struggling before this happened. We had a new CEO start in February who has made it clear he will do all he can to avoid layoffs or furloughs. But many of our clients are already cutting headcount or furloughing people. Our earnings call is next week and will be interesting.

My family will be okay as my wife will keep working as a nurse critical to keeping the PACU at a local hospital running. Her income alone allows us to cover our mortgage and most of our monthly expenses. We just paid off my student loans which reduced out monthly expenses considerably. So we are banking cash on the prospect I get laid off. In that scenario we could get by for about 2 to 2.5 years off her income and our emergency fund. If she were to lose her job cut that in half.

But we are the minority. Even among white collar employees we are the minority. As this evolves and more and more white collar folks get hit this is going to get uglier. The governor was taking questions yesterday about why people weren't able to file for unemployment as that has become a huge deal.

I don't have the answers, but I am not really looking forward to whatever comes of this.

 

[OldShooter]

... Not sure why the Feds should backstop that.

They won't be. The "feds" have no money of their own. Ultimately they get that money from us. Over the short term, they simply borrow it.

 

[gwraigty]

The unemployment claims issues are real. My DS was furloughed almost immediately at the beginning of this shutdown back in mid March. He applied for unemployment but still hasn’t heard about his claim. He tries to call the Texas office, but it’s an automated response with no option to speak with a human. It only tells him to wait for a letter regarding his claim. There’s another customer service number but it gives a no longer in service busy beep when called. So, he has no idea if/when he will get a dime of unemployment money.

OTOH, I’ve got mixed feelings. Honestly, I’m a little concerned if he were to get the unemployment, with the added stimulus benefit of $600/month, it exceeds anything he could get by working. I don’t want him to give up on finding employment and being a worker. Unfortunately, he could have tendencies that direction.

Sorry to hear that's happening. Isn't it $600/week extra? At any rate, I wouldn't worry too much. That extra federal money is supposed to expire on July 31st.

 

[Turbo29]

These measures to reopen the economy, slowly and responsibly, with continuous monitoring, are necessary, unless someone can figure out how to fix the problems that government is having getting money to the unemployed regularly.

Even if they can get the money to the unemployed an economy cannot be saved from disaster with a large percentage of its productive capacity idled just by printing money to pay those who were idled.

The economy has to be reopened sooner rather than later.

 

[Gumby]

Well, unlike the Feds, the States cannot print money - so their day is coming.

I expect our state will survive for the rest of this fiscal year on our rainy day fund. But the new fiscal year stating on July 1 will be grim. I foresee substantial layoffs and furloughs for state employees in the coming year.

 

[MuirWannabe]

Sorry to hear that's happening. Isn't it $600/week extra? At any rate, I wouldn't worry too much. That extra federal money is supposed to expire on July 31st.

Holy smokes. I looked it up and you’re right. It’s $600/week. That amount alone is more than DS was making at $14/hr as a hotel front desk supervisor. Much less the base unemployment benefits. But if it expires July 31st then as you say it may not matter cause it’s not being processed fast. Unless they make it retroactive which seems kinda odd but I don’t know.

 

[PatrickA5]

Seems as though it’s a great time to be a government employee. Wish DS could get on with some state or federal position. Wonder how many of the millions of unemployed are from the public sector?

I'm not sure about Federal, but our medium-sized City just announced 1/2 day per week furloughs for every city employee (other than Fire and Police) for the remainder of the year. On top of that, everybody, including the Mayor, will take 10% pay cuts.

I don't see working for States/Cities missing out on the reduced economy.

 

[copyright1997reloaded]

Many many pages back I suggested that the government could give all the paper ($) it wanted, but that sooner rather than later people must go back to work - regardless of whether there is a vaccine or treatment.

We as a society and country simply can't have tons of people sitting, spending money given to them from the government dole, while a set of the chosen ("essential") take risk by working. It just won't work - those essential will soon enough be royally pissed that they work while others sit, many of those sitting but not (yet?) getting enough government dole will demand to go back, and other countries will eventually learn that we have nothing to trade with them (and thus why have those $).

As gwraigty points out (and I did what seems so long ago), it is easy for those of us who are retired/FIRE'd to think that there is plenty of time to slowly get people back making things. I would maintain that there isn't. Goldman Sachs at the end of March predicted a 34% Q2 GDP decline. If that happens, it is a MASSIVE downturn - and we are just STARTING to see the secondary effects (e.g. the second wave of layoffs).

Look, from a personal perspective I am in NO HURRY to go out and about and to risk catching the virus. All I am saying is from a societal perspective we have no choice. That was true in the 1919/19 Spanish Flu where the CFR was >2.5% and which had a large impact of those in their prime.

Maybe in 30-50 years when we've automated production of everything we can all just stay home while the robots farm, manufacture, and deliver goods and services. But we aren't there now.

 

[USGrant1962]

Holy smokes. I looked it up and you’re right. It’s $600/week. That amount alone is more than DS was making at $14/hr as a hotel front desk supervisor. Much less the base unemployment benefits. But if it expires July 31st then as you say it may not matter cause it’s not being processed fast. Unless they make it retroactive which seems kinda odd but I don’t know.

Yup, DW got layed off from her part time job and is making 3.4X her pay on unemployment

I'm not a fan of the flat $600 plus-up, but Mnuchin said that was the best way to do it quickly. IMO enhanced unemployment should have been capped at your qualifying wages, but supposedly the archaic State computer systems can't deal with that.

It is going to create some big issues in a month or two when businesses reopen and their employees refuse to take the pay cut to return to work. Happy times for employment lawyers.

 

[Turbo29]

Many many pages back I suggested that the government could give all the paper ($) it wanted, but that sooner rather than later people must go back to work - regardless of whether there is a vaccine or treatment.

We as a society and country simply can't have tons of people sitting, spending money given to them from the government dole, while a set of the chosen ("essential") take risk by working. It just won't work - those essential will soon enough be royally pissed that they work while others sit, many of those sitting but not (yet?) getting enough government dole will demand to go back, and other countries will eventually learn that we have nothing to trade with them (and thus why have those $).

As gwraigty points out (and I did what seems so long ago), it is easy for those of us who are retired/FIRE'd to think that there is plenty of time to slowly get people back making things. I would maintain that there isn't. Goldman Sachs at the end of March predicted a 34% Q2 GDP decline. If that happens, it is a MASSIVE downturn - and we are just STARTING to see the secondary effects (e.g. the second wave of layoffs).

Look, from a personal perspective I am in NO HURRY to go out and about and to risk catching the virus. All I am saying is from a societal perspective we have no choice. That was true in the 1919/19 Spanish Flu where the CFR was >2.5% and which had a large impact of those in their prime.

Maybe in 30-50 years when we've automated production of everything we can all just stay home while the robots farm, manufacture, and deliver goods and services. But we aren't there now.

+1

 

[gwraigty]

+1

I'd also add that it's only a matter of time before this starts hitting folks in white collar jobs who need their paychecks. Not all white collar employees have 6 months of cash. In fact many live paycheck to paycheck. I am still working from home and employed. But my company is completely dependent on retail sales to make money. Many of our biggest clients were struggling before this happened. We had a new CEO start in February who has made it clear he will do all he can to avoid layoffs or furloughs. But many of our clients are already cutting headcount or furloughing people. Our earnings call is next week and will be interesting.

My family will be okay as my wife will keep working as a nurse critical to keeping the PACU at a local hospital running. Her income alone allows us to cover our mortgage and most of our monthly expenses. We just paid off my student loans which reduced out monthly expenses considerably. So we are banking cash on the prospect I get laid off. In that scenario we could get by for about 2 to 2.5 years off her income and our emergency fund. If she were to lose her job cut that in half.

But we are the minority. Even among white collar employees we are the minority. As this evolves and more and more white collar folks get hit this is going to get uglier. The governor was taking questions yesterday about why people weren't able to file for unemployment as that has become a huge deal.

I don't have the answers, but I am not really looking forward to whatever comes of this.

I'm glad to hear you'll be OK for awhile.

You make a wonderful point. I don't think many people realize it's not just the lower paid hourly workers who are hurting. They took the immediate hit. The pain is trickling up.

DH is a software engineer at the HQ of a company that develops and manufactures parts for commercial vehicle systems. Trucks are still rolling, but OEM customers have shut down their manufacturing facilities to one degree or other. Consistency isn't there. At one point, their customers were shutting down like a row of falling dominoes. It's for a week, then 2 weeks, then that gets extended, etc. Some customers have opened up to a limited degree, while others remain shut down. Some have had to shut down because of supply chain issues. All employees were warned that cost cutting measures would be required across the board. Nothing further has been said about that in a couple of weeks. Even though one major customer has most of their plants shut down, they specifically requested that the company continue to work on future projects, which is DH's specific area. We're still not taking anything for granted. The story changes like the weather in Ohio this week.

As an aside, some have speculated that WFH will become more prevalent, even the norm. DH is one of about 50 people still going in to the office out of about 550 total. It's the 2nd largest employer in the city. Despite everything going on and all the uncertainty, they finally started construction earlier this month on a new HQ in a different city about 15 miles from the current HQ. The new HQ will house up to 800 employees. I doubt they would have designed the new HQ to be so much larger if they wanted the majority of the employees to continue WFH after that restriction is lifted. Otherwise, what a waste of money and space! YMMV.

 

[gwraigty]

Even if they can get the money to the unemployed an economy cannot be saved from disaster with a large percentage of its productive capacity idled just by printing money to pay those who were idled.

The economy has to be reopened sooner rather than later.

+1

 

[Midpack]

Many many pages back I suggested that the government could give all the paper ($) it wanted, but that sooner rather than later people must go back to work - regardless of whether there is a vaccine or treatment.

We as a society and country simply can't have tons of people sitting, spending money given to them from the government dole, while a set of the chosen ("essential") take risk by working. It just won't work - those essential will soon enough be royally pissed that they work while others sit, many of those sitting but not (yet?) getting enough government dole will demand to go back, and other countries will eventually learn that we have nothing to trade with them (and thus why have those $).

As gwraigty points out (and I did what seems so long ago), it is easy for those of us who are retired/FIRE'd to think that there is plenty of time to slowly get people back making things. I would maintain that there isn't. Goldman Sachs at the end of March predicted a 34% Q2 GDP decline. If that happens, it is a MASSIVE downturn - and we are just STARTING to see the secondary effects (e.g. the second wave of layoffs).

Look, from a personal perspective I am in NO HURRY to go out and about and to risk catching the virus. All I am saying is from a societal perspective we have no choice. That was true in the 1919/19 Spanish Flu where the CFR was >2.5% and which had a large impact of those in their prime.

Maybe in 30-50 years when we've automated production of everything we can all just stay home while the robots farm, manufacture, and deliver goods and services. But we aren't there now.

+1. Nice post.

For the record, some/many others here “who are retired/FIRE'd” DO NOT “think that there is plenty of time to slowly get people back making things.” I think a lot of people are underestimating the fallout already baked in. And I think we need to open the economy back in stages as soon as it doesn’t outstrip our healthcare resources. It’s going to be messy and higher risk people will have to “sacrifice” longer.

I’m a little concerned we’re not putting all the (testing & contact tracing) practices in place to be successful reopening - but I truly hope I’m wrong. A second wave worse than the first could be devastating. The US may have our own “bold experiment” if we get it wrong.

 

[Gumby]

Nice post.

For the record, some/many here “who are retired/FIRE'd” DON’T “think that there is plenty of time to slowly get people back making things.” I think we need to open the economy back in stages as soon as it doesn’t outstrip our healthcare resources. It’s going to be messy and higher risk people will have to sacrifice longer. I’m a little concerned we’re not putting all the practices in place to be successful reopening - but I truly hope I’m wrong. A second wave worse than the first could be devastating.

Agreed. I may be retired, but I am still concerned about the economy, particularly as my portfolio is dependent on its rise and fall. We can do this in a rational manner that best serves both the economy and our public health, or we can simply surrender to the loudest voices of the impatient. I prefer the rational approach.

 

[MichaelB]

I’m a little concerned we’re not putting all the practices in place to be successful reopening - but I truly hope I’m wrong. A second wave worse than the first could be devastating.

This is an opportunity for large employers to show some leadership, initiative and innovation. They are capable of designing blueprints to get their employees fully deployed, still generally safe, and their businesses back to full capacity.

 

[brewer12345]

+1. Nice post.

For the record, some/many others here “who are retired/FIRE'd” DO NOT “think that there is plenty of time to slowly get people back making things.” I think a lot of people are underestimating the fallout already baked in. And I think we need to open the economy back in stages as soon as it doesn’t outstrip our healthcare resources. It’s going to be messy and higher risk people will have to “sacrifice” longer.

I’m a little concerned we’re not putting all the (testing & contact tracing) practices in place to be successful reopening - but I truly hope I’m wrong. A second wave worse than the first could be devastating. The US may have our own “bold experiment” if we get it wrong.

So I don't see how we will avoid a bad second wave if we push everyone back to work in the next 4 to 6 weeks given the facts on the ground. Maybe we will get really lucky with an effective treatment that can be rapidly distributed but I guess I don't like high stakes gambles. Since we seem desperate to get everyone out there again without enough testing, tracing, PPE, etc., you can bet on a second wave. That will be ugly.

 

[travelover]

...........I’m a little concerned we’re not putting all the (testing & contact tracing) practices in place to be successful reopening - but I truly hope I’m wrong. ..........

I've not seen a plan either on a federal level or a state level that was much more than hand waving. I'd expect to see hard numerical goals for each facet of reopening with daily updates on the progress toward each. Like how many tests needed, how many swabs, how much reagent, how many contact tracers, how many masks needed.

 

[gwraigty]

Many many pages back I suggested that the government could give all the paper ($) it wanted, but that sooner rather than later people must go back to work - regardless of whether there is a vaccine or treatment.

We as a society and country simply can't have tons of people sitting, spending money given to them from the government dole, while a set of the chosen ("essential") take risk by working. It just won't work - those essential will soon enough be royally pissed that they work while others sit, many of those sitting but not (yet?) getting enough government dole will demand to go back, and other countries will eventually learn that we have nothing to trade with them (and thus why have those $).

As gwraigty points out (and I did what seems so long ago), it is easy for those of us who are retired/FIRE'd to think that there is plenty of time to slowly get people back making things. I would maintain that there isn't. Goldman Sachs at the end of March predicted a 34% Q2 GDP decline. If that happens, it is a MASSIVE downturn - and we are just STARTING to see the secondary effects (e.g. the second wave of layoffs).

Look, from a personal perspective I am in NO HURRY to go out and about and to risk catching the virus. All I am saying is from a societal perspective we have no choice. That was true in the 1919/19 Spanish Flu where the CFR was >2.5% and which had a large impact of those in their prime.

Maybe in 30-50 years when we've automated production of everything we can all just stay home while the robots farm, manufacture, and deliver goods and services. But we aren't there now.

+1

I talked with one of my friends via Facebook. She works in food service as an employee of a local school district. When the schools closed, the 8 hour a day workers were immediately tasked with preparing the to-go meals so that the students could still be fed. She works 6 hours a day this school year. For some strange contract reason, the school would have to pay her more than the 8 hour workers to help out with the same task. She (and others so classified) got to sit home, on call, and still be paid their full pay by the school, while the 8 hour workers were "pissed" about it. I'd feel the same way, I think. The logistics were difficult. After a couple of weeks they switched to handing out meals 2 days a week with several days worth each. She started having to work one day a week at that point. I'm not sure how many days the others still have to work.

 

[Chuckanut]

+1. Nice post.

For the record, some/many others here “who are retired/FIRE'd” DO NOT “think that there is plenty of time to slowly get people back making things.” I think a lot of people are underestimating the fallout already baked in. And I think we need to open the economy back in stages as soon as it doesn’t outstrip our healthcare resources. It’s going to be messy and higher risk people will have to “sacrifice” longer.

+1

I know several white collar people in my neighborhood who have worked from home for a month. They are beginning to wonder just how long their employer will keep them on if the company continues to have no income. the medical experts are doing their best from their point of view. Our elected leaders need to balance all the alternatives and come up with the best compromise. And they don't a lot of time - a few months at best.


At the risk of sounding like broken record - An economic crisis is not a cure for an epidemic. Driving people into lower incomes if not poverty does not improve the overall health of society. We need a strong working economy to produce the goods and services we need to get out of this mess.


My 2¢. Take what you wish and leave the rest.

 

[sengsational]

Yearning for Stuff?

As I read some of the earlier posts in this thread, yearning for what you'd do and get and whatever after the virus was under better control reminded me of the opening of a book I read a while back.

The author (Sam Harris) contrasts how his experience of solitude contrasted with other peoples' solitude. I saw a parallel how people view the new anti-viral-spreading environment. Perspective matters.

The part I'm talking about is in the first few paragraphs. Then he starts talking about exploring his mind with drugs and stuff, nothing more about reflecting on solitude after that.

The link is an excerpt from his book, posted on NPR.

https://www.npr.org/books/titles/349490246/waking-up-a-guide-to-spirituality-without-religion

 

[Nemo2]

The author (Sam Harris) contrasts how his experience of solitude contrasted with other peoples' solitude. I saw a parallel how people view the new anti-viral-spreading environment. Perspective matters.

Sounds a little like a latter day Walden.

 

[Winemaker]

From the beginning of time to the 1950's, polio was a horrible disease that could paralyze you (1/200), give you menengitis (1/25), or flu like symptoms that went away (1/4), or be asymptomatic (75/100). Life wasn't shut down before the '60's when widespread vaccinations occurred after being discovered by Salk in 1953. It took several tries to finally eliminate polio in the US until 1979, Europe in 2002, SE Asia in 2014 and is still being fought in Africa. Polio is much worse than Covid-19.

 

[Chuckanut]

As I read some of the earlier posts in this thread, yearning for what you'd do and get and whatever after the virus was under better control reminded me of the opening of a book I read a while back.

The author (Sam Harris) contrasts how his experience of solitude contrasted with other peoples' solitude. I saw a parallel how people view the new anti-viral-spreading environment. Perspective matters.

The part I'm talking about is in the first few paragraphs. Then he starts talking about exploring his mind with drugs and stuff, nothing more about reflecting on solitude after that.

The link is an excerpt from his book, posted on NPR.

https://www.npr.org/books/titles/349490246/waking-up-a-guide-to-spirituality-without-religion

I find Sam Harris to be either brilliant or a complete whack-job. He does make one think. Alas, to me has the voice of a traditional FM Radio host - so mild that it can put one to sleep.

 

[timo2]

From the beginning of time to the 1950's, polio was a horrible disease that could paralyze you (1/200), give you menengitis (1/25), or flu like symptoms that went away (1/4), or be asymptomatic (75/100). Life wasn't shut down before the '60's when widespread vaccinations occurred after being discovered by Salk in 1953. It took several tries to finally eliminate polio in the US until 1979, Europe in 2002, SE Asia in 2014 and is still being fought in Africa. Polio is much worse than Covid-19.

Recall that the current shutdown is for the hospitals, not for us. When the hospitals get caught up, we can expect life to go on as you describe from the days of yore.