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On your point about the economy "bouncing back". I'm not sure why you and other people think the economy will return to pre-lockdown state. It will never be the same. The fundamental issue with why people think there's "some serious economic sh$7" hitting the fan is because the US economy - both businesses and individuals have been running high on that credit train for a while now - we're talking about decades. Everyone has refused to save up a proper rainy day fund and trashed fiscal responsibility to trade for economic "growth". We've been so drunk off this "growth" we think it's normal. Businesses continue to spend money on shareholders and bonuses - while ignoring employee compensation and/or none essential spending without a rainy day fund built up. Individuals continue to spend lavishly and go deep into debt to sustain a unsustainable lifestyle where 50% of the country doesn't have $500 to their name and 70% don't have $1000 saved. Now we're told to stay home and stop spending temporarily - of course it's going to hit the fan - if you can't pay your bills you start cost cutting or going under. Now if you're going to build a rainy day fund, you will have to cut spending for a while - which does the opposite effect of economic growth. If this crisis doesn't teach people a lesson to save for a rainy day, I don't know how much more irresponsible we can be. I bet you most people on this forum do not have a proper rainy day fund (6 months of expenses+) saved up. "Proper" meaning - liquid cash savings not retirement - proportional to your cost of living and # of people under your roof for essentials only.
With regards to the actual bouncing back part. Well this all depends on spending habits in the economy. If we go straight back to how we were spending, then yes you'll see a similar "bounce back" of sorts, albeit it might be more tamed over time since we're opening stuff up in phases to attempt to restore consumer confidence. With regards to if it's possible to bounce back at all: the economy is built from human capital. We still have it even though as businesses go under. It's only a matter of flowing the money and capital to trigger a restart. If we get serious about saving for a rainy day, yes hard decisions will have to be made and you will see a very slow recovery. But that's the cost of doing so because of our reckless spending habits we've built up over decades. Now we're going to pay for it. This applies for everyone, individual, businesses, and governments.
Other factor that don't help the situation in the economy:
Our fractured healthcare system which access to largely depends on access to a job with benefits.
As for your point to floating checks and it crashing down. Well there isn't really any other option here because we have a pandemic. Because of the above situation I just described, that's the situation we put ourselves in during a real emergency. We dig into the national credit card as a result of it. Now I'm not saying we should do that indefinitely. I said, in the meantime while this crisis is going on we can temporarily do that to help people stay put. After we get through it this we'll have to do some real soul searching for a new fiscal mindset and pay down the national debt. We will have to raise taxes and we as citizens should expect taxes to go up and cannot whine about that.
As individuals, STOP spending money on credit - aside from homes and vehicles. Buying a washer and dryer on a Best Buy credit card is not acceptable, you should've planned for this way in advance.
STOP buying over the amount on big ticket items that you can really afford. Looking at you $50k income households with a $30k car and a $300k home. Just because you can qualify doesn't mean you should spend up to the limit. Buy a cheaper used car. Buy a cheaper and smaller house - if you can't move to a cheaper area or get a better job. Save for a rainy day by quarantining yourself until you do so. Everyone needs to have AT LEAST $15,000 in savings if you're single. Double that if you're a family of 4. More if you live in a higher COL area (Scottsdale, Paradise Valley, Tempe, Chandler, Gilbert, DT Phx). No whining and b@tchin, suck it up and save like your life depended on it.
All this doom and gloom in such a short period of time is really just a reflect of the childish financial behavior we as a society as sowed into ourselves in perpetuity and have made it a reality over time. Time to own up to that reality. This thread is just a demonstration of how far we've gone so far off the deep end to even suggest such a topic like this - a moral hazard baked into the economy on purpose because of our own recklessness.
There's no excuses any more.
Long way of saying individuals are, for the most part, financially irresponsible. We agree.
However, working and spending generates taxes that fund city, school district, county, state and federal spending and those entities are as addicted to credit spending as any individual. Without working who is going to fund all those salaries and benefits? Are they prepared to make cuts like non-government employees (have they made any yet)? What happens to credit when cities need to borrow their butts off? Will government shrink the number of non-essential employees like businesses have been forced to do?
The trickle down effect (or up if you think of taxes as paying up) of this has only just begun.
Setting aside the issue of human lives for the moment...
Looking at this purely from an economic point of view, is it more important to open up businesses immediately, or is it more important for the public to believe it's safe to be out and about before reopening? The answer is far from clear, IMO.
Agreed. Because they are just starting to get the data in. But before the last couple of CA studies, it was a whole different situation. So the data to open up sooner than later is VERY hopeful: just not definitive.
I think the economic question is more about which will be more harmful in the long run. Rushing to reopen, possibly causing cases to spike and returning to a longer, strict lockdown, or staying locked down now until deaths and new cases are clearly diminishing.
I think all the people screaming about reopening the state are failing to consider the greater economic harm that that may bring if not done so in a calculated fashion.
Yep ^^. That's a big part of the formula. But without the data, the formula is flawed. Like "3.5% death rate" that was initially quoted by WHO. That is way high (probably 20X high). At this point, Trump is saying the same thing: wait for mid-May (not now).
Agreed. Because they are just starting to get the data in. But before the last couple of CA studies, it was a whole different situation. So the data to open up sooner than later is VERY hopeful: just not definitive.
The data indicate that, in contrast with what many including me had come to believe, we are still on the rising side of the curve and the state models reflect this as well. I think we will go to mid-May with most of the shutdown (and remember, Arizona's semi-shutdown is roughly what other states are doing with re-opening.) At that point, everyone will have had enough and we will all agree that it is best to just let the vulnerable die or fend for themselves.
Long way of saying individuals are, for the most part, financially irresponsible. We agree.
However, working and spending generates taxes that fund city, school district, county, state and federal spending and those entities are as addicted to credit spending as any individual. Without working who is going to fund all those salaries and benefits? Are they prepared to make cuts like non-government employees (have they made any yet)? What happens to credit when cities need to borrow their butts off? Will government shrink the number of non-essential employees like businesses have been forced to do?
The trickle down effect (or up if you think of taxes as paying up) of this has only just begun.
Yes, but there's a reason why I went the long way. To shed light on reality that most people seem to be ignoring or by selective willful ignorance. Financial irresponsibility has gotten to the point it needs to be shamed outright individually and all organizations in this country to get people to do better. Part of the problem is talks about finances is taboo in social settings which is wrong. We need to be more open about it. Accept criticism, refocus ourselves and try to do better.
Now with the credit issue, we're not going to have a point in the economy where there's 0 debts for any organization. It's about the balance sheets. The economy functions as a nice machine if everyone has enough cash flow (job/taxes/etc.) with a sufficient rainy day fund to weather economic shocks of various magnitudes.
Credit will exist in government, which is fine. It's more about reasonable expectations for expenditures that generates said debt. Financial system reforms will need to happen obviously - regulation will need to be enacted. Lending standards will have to be tightened for certain things to remove the temptation for credit.
Part of the issue with this fixing the credit issue is again pointed to the wealth gap accumulated over the past 4-5 decades because of our consistent philosophically driven agenda to drive smaller government - by lowering taxes without adherence to rational mathematical based logic based on the budget. A few people in our population controls the majority of the wealth so if we as a society needs to fix anything - we will need to have an honest discussion on where the real wealth is because 85-90% of Americans don't have that kind of wealth. Then add the politics and media on top of this and this is the mess we have. Smaller government is all well and fine - if you legitimately balance out how and what to shift to the state government's budget (and the tax consequences as a result i.e. AZ will raise taxes if the Fed lowers its taxes to spend how AZ deems necessary for certain items).
As for more efficient government, I'm all for it but expenditures will need to be set aside to invest just like any business. But if you have constituencies screaming for lower taxes all the time without thinking, it's difficult for politicians to pass "pork" projects.
The data indicate that, in contrast with what many including me had come to believe, we are still on the rising side of the curve and the state models reflect this as well. I think we will go to mid-May with most of the shutdown (and remember, Arizona's semi-shutdown is roughly what other states are doing with re-opening.) At that point, everyone will have had enough and we will all agree that it is best to just let the vulnerable die or fend for themselves.
Well, I would put it so blunt but I'd say AZ has already reached this tipping point. I was in a large Fry's supermarket yesterday and people were going about life as usual. I didn't notice a lot of social distancing and most weren't wearing a mask.
The political posturing, *media panic porn and questionable data has left many people with a feeling of enough is enough.
I vote reopen AZ on May 1st but the 15th might be the date. I think Ducey wants to open on the 1st but the 15th will give him additional political cover.
Thanks for sharing that link. Some people feel enough is enough, but my social media feeds also contain a decent number of posts from “friends” (in the loose Facebook sense of the term) who seem to be competing with one another to see who can advocate the most extreme restrictions. They boast about how long it’s been since they’ve left their homes, promise to shame anyone they see not wearing a mask in public, and call for elected officials to adopt the most hard-line mandates possible. I’ve unfollowed a lot of people, at least for a while, even though I normally align with them on various political and social issues.
Thanks for sharing that link. Some people feel enough is enough, but my social media feeds also contain a decent number of posts from “friends” (in the loose Facebook sense of the term) who seem to be competing with one another to see who can advocate the most extreme restrictions. They boast about how long it’s been since they’ve left their homes, promise to shame anyone they see not wearing a mask in public, and call for elected officials to adopt the most hard-line mandates possible. I’ve unfollowed a lot of people, at least for a while, even though I normally align with them on various political and social issues.
Thanks for sharing that link. Some people feel enough is enough, but my social media feeds also contain a decent number of posts from “friends” (in the loose Facebook sense of the term) who seem to be competing with one another to see who can advocate the most extreme restrictions. They boast about how long it’s been since they’ve left their homes, promise to shame anyone they see not wearing a mask in public, and call for elected officials to adopt the most hard-line mandates possible. I’ve unfollowed a lot of people, at least for a while, even though I normally align with them on various political and social issues.
Guess a lot depends on where you live and/or the people you socialize with.
Unless with close friends I rarely discuss politics. Unfortunately there are people who can't agree to disagree and feel they hold a moral high ground.
I find it best to avoid to such conversations. I often like the person but won't be baited into a political argument.
Not really. Karens complain about minutia. Not adhering to mitigation recommendations are actually harmful.
I was recently in Costco and I couldn't believe how many geezers didn't have masks on and how many people weren't giving others proper distance. Idiots abound.
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