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My niece saved up over $25,000 during the pandemic. Previously she had saved $0. She took a year off of work because she felt she did not need to work and wanted to focus on working on herself instead. She recently went back to work. The money is not all gone yet, but she felt it was time. She may take another year off once she replenishes her savings. One big savings for her, i she got into a commune of sorts.A group of friends who share a house and share all the bills and expenses. There are six of them, so they can live on next to nothing.
Good for her! There aren't many people who are willing to do this. With all the doom and gloom out there, this post actually brought a smile to my face.
1. Government handouts if you got them. I do not remember the full amount but it is around $7500. More for a couple.
2. Massively reduced spending during the lock-down, specifically gasoline and dining/drinking out.
3. Continued reduce spending due to limitations on eating/drinking out, or simply new habits.
4. For some, increased income from unemployment payments, increased more by working under the table while on unemployment.
My niece saved up over $25,000 during the pandemic. Previously she had save $0. She took a year off of work because she felt she did not need to work and wanted to focus on working on herself instead. She recently went back to work. The money is not all gone yet, but she felt it was time. She may take another year off once she replenishes her savings. One big savings for her, i she got into a commune of sorts. A group of friends who share a house and share all the bills and expenses. There are six of them, so they can live on next to nothing.
Yup, a guy I knew was like this. He was working as a cook at a brewpub and taking a class or two at the community college. The place got closed down, and he got on u/e making about 200 a week more than he made working. He was living with his parents. He saved about 15k, more money than he'd ever had. In 2021 he moved into a house wirh 3 other guys, room rent is around 500 for each. He quit school and work, just hung out with his friends and went camping for over a year. Not sure what he's up to now, but I imagine the 15k is starting to run out.
I wonder how much of that year was an easygoing carefree "I'll never forget these days" kind of vibe, versus as some point that nagging voice slowly growing in volume about how it is coming to an end and must think of a plan.
Shutting down the economy was a horrible horrible idea. Once people stop working it’s very hard to get them back. The money that was injected into the economy is chasing fewer goods and services making everything more expensive. Everything is out of whack. Recession is already here we had negative GDP growth last quarter and this quarter is trending even worse GDPnow(a very reliable predictor) has us at -2%. Too many supply issues. Labor supply, logistics, etc. need to focus more on supply.
Economic contraction is an unstoppable force. We've got our heads between a vice of economic contraction- before, the tightening handle was turning very slowly, now it is turning much faster. The tighter the squeeze gets, the more frantic, more desperate we become. We will pull out all the stops to keep the status quo going. But we cannot keep the status quo going. Infinite growth and infinite debt expansion are impossible in a finite realm. Our skulls will soon crack and shatter between that tightening vice.
Economic contraction is an unstoppable force. We've got our heads between a vice of economic contraction- before, the tightening handle was turning very slowly, now it is turning much faster. The tighter the squeeze gets, the more frantic, more desperate we become. We will pull out all the stops to keep the status quo going. But we cannot keep the status quo going. Infinite growth and infinite debt expansion are impossible in a finite realm. Our skulls will soon crack and shatter between that tightening vice.
Oh yeah, the recession is 100% happening. The only thing debatable at this point is how bad it will be.
But the recession is a necessary thing. It will allow supply to catch up since demand won't be as high, it will make workers hungry and rational again, it will lower the pricing in the housing market which has become unaffordable for many people, it will lower the price of oil since less people will be going on vacations/ driving etc.
They are never fun but I'm ready to get it over with and try and get back to a more normal economy.
There are many many MANY differing "definitions". In my area, the folks I hang with, my family, we're impacted severely enough to believe we've entered into a recession. YMMV.
For those in your area/family that have been impacted severely, is it on the "income" side of the ledger - that is, has their income declined - loss of paychecks or self-employed finding fewer customers? Or, is on the "expense" side of the ledger - that the costs of living are gone up substantially more than income and hence they are worse off from an income perspective?
The average low and lower middle-income households did not experience enough of a wage boost to compensate for higher rents/home prices, higher gas prices, higher food prices, higher energy prices, higher automobile prices, etc.
That is a good thing. It provides incentives to those people to earn more money, and in doing so, they contribute to an increase in GDP. It is win-win.
Shutting down the economy was a horrible horrible idea.
In hindsight, yes. But that doesn't mean it was the wrong decision based on the information available at that time.
The US shutdown was predicated on forecasts of the number of people who would become infected and who would die; this forecast came out of the Imperial College of London in early February, 2020. Subsequently, the Imperial College of London's COVID-19 forecasts have been shown to be full of analytical and even computer programming errors. It turns out it was fatally flawed, but we only know that in hindsight.
The economic analysis justifying the cost-benefit of the shutdown came from an influential paper coming out of The University of Chicago. It effectively used the projected mortality data from the above now-discredited Imperial College of London model. Here's its abstract:
Quote:
This paper develops and implements a method to monetize the impact of moderate social distancing on deaths from COVID-19. Using the Ferguson et al. (2020) simulation model of COVID-19’s spread and mortality impacts in the United States, we project that 3-4 months of moderate distancing beginning in late March 2020 would save 1.7 million lives by October 1. Of the lives saved, 630,000 are due to avoided overwhelming of hospital intensive care units. Using the projected age-specific reductions in death and age-varying estimates of the United States Government’s value of a statistical life, we find that the mortality benefits of social distancing are about $8 trillion or $60,000 per US household. Roughly 90% of the monetized benefits are projected to accrue to people age 50 or older. Overall, the analysis suggests that social distancing initiatives and policies in response to the COVID-19 epidemic have substantial economic benefits.
The University of Chicago economists based their economic analysis on the mortality projections in the original Imperial College of London's fatally flawed estimates of the human life toll. Garbage in/garbage out, as they say.
The good news is not so many people died. However, with the benefit of 20/20 hindsight, no reputable economist opines the shut down was justified. The shutdown costs were just too high for the limited benefit we actually received.
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